SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
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
Bracknell 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] No fee required
[_] 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
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[_] 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
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Notes:
[BRACKNELL CORPORATION LOGO]
195 The West Mall
Suite 302
Toronto, Ontario M9C 5K1
Dear Fellow Bracknell Shareholders:
It is my pleasure to invite you to attend the 2001 Annual and Special
Meeting of Shareholders of Bracknell Corporation to be held at 11:00 a.m.
(Toronto time) on Monday, March 26, 2001 at the TSE Conference Centre, TSE
Auditorium, The Exchange Tower, 130 King Street West, Toronto, Ontario M5X 1J2.
This booklet includes the Notice of Annual and Special Meeting of
Shareholders and the Proxy Statement. The Proxy Statement describes the
business we will conduct at the meeting and provides information about
Bracknell.
We hope you will attend the meeting in person. Whether you plan to attend
the meeting or not, we encourage you to read this booklet and vote your shares.
Please sign, date and return the enclosed proxy as soon as possible in the
postage-paid envelope provided. However you decide to vote, we would appreciate
your completing and returning your proxy card as soon as possible.
We look forward to seeing you at the Annual and Special Meeting!
/s/ Paul D. Melnuk
Paul D. Melnuk
President and Chief Executive
Officer
February 20, 2001
[BRACKNELL CORPORATION LOGO]
195 The West Mall
Suite 302
Toronto, Ontario M9C 5K1
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
To our Shareholders:
The Annual and Special Meeting of Shareholders of Bracknell Corporation (the
"Corporation") will be held on March 26, 2001 at 11:00 a.m. (Toronto time) at
the TSE Conference Centre, TSE Auditorium, The Exchange Tower, 130 King Street
West, Toronto, Ontario M5X 1J2. The meeting is being held for the following
purposes:
1. to receive the financial statements of the Corporation for the fiscal
year ended October 31, 2000, together with the report of the auditors
thereon;
2. to elect nine directors for the ensuing year;
3. to appoint auditors for the ensuing year and to authorize the directors
to fix the compensation paid to the auditors;
4. to consider and, if thought advisable, pass, with or without variation,
a resolution approving an increase in the number of shares reserved for
issuance under the Corporation's Performance Stock Option Plan and
certain other amendments, including amendments to relate the vesting of
options to the Corporation's performance; and
5. to transact such further and other business as may properly come before
the meeting or any adjournment thereof.
The financial statements of the Corporation for the fiscal year ended
October 31, 2000 are included in the Annual Report enclosed with these
materials. You may vote at the meeting if you were a shareholder of record on
February 7, 2001. If you are unable to be present in person, please sign and
return the enclosed proxy. Proxies to be used at the meeting must be deposited
with the Corporate Secretary or with Computershare, c/o Montreal Trust Company
of Canada, Proxy Department, 100 University Avenue, 11th Floor, Toronto,
Ontario M5J 2Y1, before the close of business on March 23, 2001, or if the
meeting is adjourned, 48 hours, excluding Saturdays and holidays, before any
meeting.
By Order of the Board of Directors,
/s/ Paul D. Melnuk
Paul D. Melnuk
President and Chief Executive
Officer
February 20, 2001
BRACKNELL CORPORATION
MANAGEMENT INFORMATION CIRCULAR
PROXY STATEMENT
Solicitation of Proxies
The information contained in this management information circular/proxy
statement ("Circular" or "Proxy Statement") is furnished in connection with the
solicitation of proxies to be used at the annual and special meeting of the
shareholders (the "Meeting") of Bracknell Corporation (the "Corporation" or
"Bracknell") to be held at the TSE Conference Centre, TSE Auditorium, The
Exchange Tower, 130 King Street West, Toronto, Ontario, on Monday, March 26,
2001 at the hour of 11:00 a.m. (Toronto time) and at any postponement or
adjournment thereof for the purposes set forth in the accompanying notice of
the Meeting. It is expected that the solicitation of proxies will be made
primarily by mail but proxies may also be solicited personally by employees of
the Corporation, without additional remuneration. The Corporation will, if
requested, reimburse banks, brokerage houses and other custodians, nominees and
certain fiduciaries for their reasonable out-of-pocket expenses incurred in
connection with the distribution of proxy materials to their principals. The
enclosed proxy is being solicited by or on behalf of management of the
Corporation and the cost of such solicitation will be borne by the Corporation.
Except as otherwise stated, the information contained herein is given as of
February 7, 2001. Unless otherwise indicated, all dollar references in this
Circular are to United States dollars. This Circular and the accompanying
annual report to shareholders were first sent or given to shareholders on or
about February 28, 2001.
Appointment of Proxies
The persons named in the enclosed form of proxy are representatives of
management of the Corporation and are directors or officers of the Corporation.
A shareholder has the right to appoint as the shareholder's proxyholder a
person (who need not be a shareholder of the Corporation) to attend and to act
on the shareholder's behalf at the Meeting other than the persons designated in
the form of proxy accompanying this Circular. A shareholder may do so by
inserting the name of such other person in the blank space provided in the form
of proxy or by completing another proper form of proxy. To be valid, completed
proxies must be deposited with the Corporation at its registered office, 195
The West Mall, Suite 302, Toronto, Ontario M9C 5K1 or with Computershare, c/o
Montreal Trust Company of Canada, Proxy Department, 100 University Avenue, 11th
Floor, Toronto, Ontario M5J 2Y1, before the close of business on March 23,
2001, or if the Meeting is adjourned, 48 hours, excluding Saturdays and
holidays, before any Meeting.
Non-Registered Holders
Only registered holders of common shares of the Corporation ("Common
Shares"), or the persons they appoint as their proxies, are permitted to vote
at the Meeting. However, in many cases, Common Shares of the Corporation
beneficially owned by a holder (a "Non-Registered Holder") are registered
either:
(a) in the name of an Intermediary (an "Intermediary") that the Non-
Registered Holder deals with in respect of the Common Shares, such as,
among others, banks, trust companies, securities dealers or brokers and
trustees or administrators of self administered RRSPs, RRIFs, RESPs and
similar plans; or
(b) in the name of a clearing agency (such as the Canadian Depository for
Securities Limited (CDS) or Depository Trust Company (DTC)) of which
the Intermediary is a participant.
In accordance with the requirements of National Policy Statement No. 41 of
the Canadian Securities Administrators, the Corporation has distributed copies
of the notice of the Meeting, this Circular, the form of proxy, and the annual
report to shareholders (collectively, the "meeting materials") to the clearing
agencies and Intermediaries for onward distribution to Non-Registered Holders.
Intermediaries are required to forward meeting materials to Non-Registered
Holders unless a Non-Registered Holder has waived the right to receive them.
Very often, Intermediaries will use service companies to forward the meeting
materials to Non-Registered Holders. Generally, Non-Registered Holders who have
not waived the right to receive meeting materials will either:
(a) be given a proxy which has already been signed by the Intermediary
(typically by a facsimile, stamped signature) which is restricted as to
the number of shares beneficially owned by the Non-Registered Holder
but which is otherwise not completed. Because the Intermediary has
directly signed the form of proxy, this form of proxy need not be
signed by the Non-Registered Holder. In this case, the Non-Registered
Holder who wishes to submit a proxy should otherwise properly complete
the form of proxy and deposit it with the Corporation at its registered
office, 195 The West Mall, Suite 302, Toronto, Ontario M9C 5K1 or with
Computershare, c/o Montreal Trust Company of Canada, Proxy Department,
100 University Avenue, 11th Floor, Toronto, Ontario M5J 2Y1, as
described above; or
(b) more typically, be given a form of proxy which is not signed by the
Intermediary, and which, when properly completed and signed by the Non-
Registered Holder and returned to the Intermediary or its service
company, will constitute voting instructions (often called a "proxy
authorization form") which the Intermediary must follow. Typically, the
Non-Registered Holder will also be given a page of instructions which
contains a removable label containing a bar-code and other information.
In order for the form of proxy to validly constitute a proxy
authorization form, the Non-Registered Holder must remove the label
from the instructions and affix it to the form of proxy, properly
complete and sign the form of proxy and submit it to the Intermediary
or its service company in accordance with the instructions of the
Intermediary or its service company.
In either case, the purpose of this procedure is to permit Non-Registered
Holders to direct the voting of the Common Shares they beneficially own. Should
a Non-Registered Holder who receives either form of proxy wish to attend and
vote at the Meeting in person (or have another person attend and vote on behalf
of the Non-Registered Holder), the Non-Registered Holder should strike out the
persons named in the proxy and insert the Non-Registered Holder's name or such
other person's name in the blank space provided. In either case, Non-Registered
Holders should carefully follow the instructions of their Intermediaries and
their service companies, including those regarding when and where the proxy or
proxy authorization form is to be delivered.
Revocation of Proxies
In addition to revocation in any other manner provided by law, a shareholder
who has given a proxy may revoke the proxy by:
(a) completing and signing a proxy bearing a later date and depositing it
as aforesaid; or
(b) depositing an instrument in writing executed by the shareholder or the
shareholder's attorney authorized in writing,
(1) at the registered office of the Corporation at any time up to and
including the last business day preceding the day of the Meeting,
or any adjournment thereof, at which the proxy is to be used; or
(2) with the chairman of the Meeting on the day of the Meeting or any
adjournment thereof.
A Non-Registered Holder may revoke a proxy authorization form (voting
instructions) or a waiver of the right to receive meeting materials and to vote
given to an Intermediary at any time by written notice to the Intermediary,
except that an Intermediary is not required to act on a revocation of a proxy
authorization form (voting instructions) or of a waiver of the right to receive
materials and to vote that is not received by the Intermediary at least seven
days prior to the Meeting.
2
Voting Of Proxies
The management representatives designated in the enclosed form of proxy will
vote or withhold or abstain from voting the Common Shares in respect of which
they are appointed by proxy on any ballot that may be called for in accordance
with the instructions of the shareholder as indicated on the proxy and, if the
shareholder specifies a choice with respect to any matter to be acted upon, the
Common Shares will be voted accordingly. In the absence of such direction, such
shares will be voted by the management representatives in accordance with the
recommendations of the Board of Directors as indicated under the headings in
this Circular. Votes cast by proxy or in person at the Meeting will be
tabulated by the judge of elections appointed for the Meeting. The judge of
elections will include Common Shares that are represented and entitled to vote
but that are withheld or abstained from voting on a particular matter for
purposes of determining the presence of a quorum but not for purposes of
determining the approval of any matter submitted to shareholders for a vote. If
an Intermediary indicates on a proxy that such Intermediary does not have
discretionary authority as to certain Common Shares to vote on a particular
matter, such shares will be considered as present and not entitled to vote with
respect to that matter.
The enclosed form of proxy confers discretionary authority upon the
management representatives designated therein with respect to amendments to, or
variations of, matters identified in the notice of the Meeting and with respect
to other matters which may properly come before the Meeting. At the date of
this Circular, the management of the Corporation knows of no such amendments,
variations or other matters.
Voting Shares And Record Date
On February 7, 2001, the Corporation had outstanding 64,304,390 Common
Shares. Each registered holder of Common Shares of record at the close of
business on February 7, 2001, the record date established for notice of the
Meeting, will be entitled to one vote for each Common Share held by such
shareholder on all matters proposed to come before the Meeting. To the extent
that such shareholder has transferred any Common Shares after the record date
and the transferee of such shares establishes ownership thereof and demands,
not later than 10 days before the Meeting, to be included in the list of
shareholders entitled to vote at the Meeting, the transferee will be entitled
to vote such shares.
ELECTION OF DIRECTORS
The term of office of each present director will expire immediately prior to
the election of directors at the Meeting. The number of directors of the
Corporation to be elected at the Meeting is nine. It is the intention of the
management representatives designated in the enclosed form of proxy to vote the
Common Shares in respect of which they are appointed proxyholders for the
election of the nominees whose names are listed below as directors of the
Corporation, unless the shareholder who has given such proxy has directed that
the Common Shares be withheld from voting. Each person listed below is
currently a member of the Board of Directors.
The term of office for each person elected will be until the next annual
meeting of shareholders of the Corporation or until his successor is elected or
appointed. In the event that prior to the Meeting any vacancies occur for any
reason in the slate of nominees submitted herewith, it is intended that
discretionary authority shall be exercised to vote the proxies hereby solicited
for the election of any other person or persons nominated by management as
directors.
Vote Required. The affirmative vote of the holders of a majority of the
outstanding Common Shares entitled to vote and represented in person or by
proxy at the Meeting is required for the election of each director.
The Board of Directors recommends a vote FOR the election of these nominees as
directors.
3
Information Regarding Nominees For Election As Directors
The following table sets forth the name of each person proposed by
management of the Corporation to be nominated for election as a director, the
position with the Corporation which each nominee presently holds, the principal
occupation of each nominee, and the date on which each nominee was first
elected or appointed a director. See "Security Ownership of Certain Beneficial
Owners and Management" below for the number of Common Shares that are
beneficially owned, directly or indirectly, or over which control or discretion
is exercised, by each nominee.
Present Principal
Name and Position and/or Office Occupation
with the Corporation or Its if Different from Office
Affiliates Held Director Since
------------------------------- -------------------------- --------------
Gilbert S. Bennett Chairman of the Board, November 1994
Director and Canadian Tire Corporation,
Chairman of the Board of DirectorsLimited and Encal Energy
Ltd.; Consultant and
Corporate Director
Jean-Rene Halde President and Chief June 2000
Director Executive Officer,
Livgroup Investments Ltd.
(formerly Livingston
Group, Inc.)
Michael D. Hanna Professional Corporate March 2000
Director Director and Management
Consultant
Wade C. Lau Vice President, Opus December 1999
Director Properties, L.L.C.
Paul D. Melnuk -- November 1994
Director, President and
Chief Executive Officer
James W. Moir, Jr. Professional Corporate April 1997
Director Director
Thomas P. Muir Chief Financial Officer, December 2000
Director Maple Leaf Foods Inc.
Gregory J. Orman President, Chief Executive September 1999
Director Officer and Director,
KLT Inc.
Allan R. Twa Partner, Burnet, Duckworth August 1985
Director & Palmer LLP
Directors and Executive Officers
The following chart and biographical information provides information about
the directors and executive officers of the Corporation:
Name Age Position
---- --- --------
Gilbert S. Bennett 62 Chairman of the Board of Directors
Paul D. Melnuk 46 President, Chief Executive Officer and Director
Frederick C. Green IV 44 Executive Vice President and Chief Operating Officer
John A. Witham 49 Executive Vice President and Chief Financial Officer
John R. Naccarato 34 Secretary
James A. Beukelman 37 Vice President and Corporate Controller
Jean-Rene Halde 52 Director
Michael D. Hanna 48 Director
Wade C. Lau 40 Director
James W. Moir, Jr. 56 Director
Thomas P. Muir 45 Director
Gregory J. Orman 32 Director
Allan R. Twa 53 Director
4
Gilbert S. Bennett. Mr. Bennett has been a director of the Corporation since
November 1994 and serves as Chairman of the Board. Mr. Bennett has also served
as Chairman of the Board of Canadian Tire Corporation, Limited (retailer) since
September 1996 and Encal Energy Ltd. (oil and gas) since 2000. He also serves
as a director of Canadian Niagara Power Company Limited (power generation and
distribution), Fortis Inc. (electrical utility holding company), and several
private companies. Mr. Bennett has also provided business consulting services
since 1992.
Paul D. Melnuk. Mr. Melnuk has been a director of the Corporation since
November 1994 and has been Bracknell's President and Chief Executive Officer
since March 1999. Prior to his present position, Mr. Melnuk was President and
Chief Executive Officer of Barrick Gold Corporation (gold production) from 1998
to 1999 and President and Chief Executive Officer of Clark USA, Inc. (oil
refining) from 1992 to 1998. Mr. Melnuk is also a director of Petro-Canada (oil
and gas).
Frederick C. Green IV. Mr. Green has been Executive Vice President of the
Corporation since September 1999 and Chief Operating Officer of the Corporation
since December 1999. Mr. Green was President and Chief Executive Officer of
Nationwide Electric, Inc. from 1998 to 1999 prior to its acquisition by the
Corporation. Mr. Green served as President and Chief Executive Officer of
Product Safety Resources, Inc. (product safety information provider) from 1996
to 1998 and President and Chief Operating Officer of Plum Building Systems,
Inc. (building materials) in 1996, and held several executive roles with the
Fisher-Rosemount Group of Emerson Electric (manufacturing) from 1988 to 1996.
John A. Witham. Mr. Witham has been Executive Vice President since November
2000 and Chief Financial Officer of the Corporation since January 2001. Mr.
Witham served as Executive Vice President of Arcadia Financial Ltd. (financial
services) from December 1995 to May 2000 and served as Chief Financial Officer
of Arcadia from February 1994 to May 2000.
John R. Naccarato. Mr. Naccarato has been the Secretary of the Corporation
since May 1999. He also served as Corporate Counsel of Bracknell from May 1999
to January 2001. Mr. Naccarato has been the President of Neal Electric, Inc., a
subsidiary of Bracknell, since January 2001. Mr. Naccarato was previously the
Assistant to the Corporate Secretary at Dofasco Inc. (steel) from June 1997 to
May 1999. Mr. Naccarato was employed at the law firm of Lang Michener from June
1996 to May 1997.
James A. Beukelman. Mr. Beukelman has been Vice President and Corporate
Controller of the Corporation since January 2001. Mr. Beukelman previously
served as the Corporation's Vice President-Finance of the Commercial Customer
Category from January 2000 to December 2000 and Corporate Controller of
Nationwide Electric, Inc. from January 1999 to December 1999. Mr. Beukelman was
previously employed by Deloitte & Touche (independent accountants) as a Senior
Manager in the Risk Consulting Services Group in 1998 and as a Senior Manager
in the Audit Department in 1996 and 1997.
Jean-Rene Halde. Mr. Halde has been a director of the Corporation since June
2000. Mr. Halde has been the President and Chief Executive Officer of Livgroup
Investments Ltd. (formerly Livingston Group Inc.) since January 1995. Livgroup
Investments Ltd. is a privately-held holding company that recently completed
the divestiture of its operating subsidiaries that provided outsourcing of
customized logistics solutions and electronic commerce services in North
America. Mr. Halde is on the Board of Directors of the Institute of Corporate
Directors and is also a member of the Canadian Business Council on National
Issues.
Michael D. Hanna. Mr. Hanna has been a director of the Corporation since
March 2000. Mr. Hanna is currently a professional corporate director and
management consultant. Mr. Hanna was the Chief Executive Officer and Chairman
of Sunbelt Integrated Trade Services, Inc. from November 1998 to March 2000,
when Sunbelt was acquired by Bracknell. Mr. Hanna previously served as
Executive Vice President of Louisiana-Pacific Corporation (forest products)
from 1996 to 1998 and as the President and co-owner of Associated Chemists Inc.
(specialty chemicals) from 1990 to 1996.
5
Wade C. Lau. Mr. Lau has been a director of the Corporation since December
1999. Mr. Lau is a Vice President of Opus Properties, L.L.C., the asset
management arm of the Opus Group of Companies (real estate development). Prior
to his current employment, Mr. Lau was Executive Managing Director of CB
Richard Ellis, Inc. (real estate) from 1998 to 1999 and Executive Vice
President of CB Commercial Koll Management Services from 1995 to 1998.
James W. Moir, Jr. Mr. Moir has been a director of the Corporation since
April 1997. Mr. Moir is a professional corporate director. Mr. Moir retired in
October 1998 as President and Chief Executive Officer of Maritime Medical Care
Inc. (health services), a position he held for six years. Mr. Moir is also a
director of Sears Canada Inc. (retailer), CrossOff Incorporated (internet
security services), Salter Street Films Limited (movie and television
production), and Malibu Engineering and Software Ltd. (data modeling software
sales).
Thomas P. Muir. Mr. Muir has been a director of the Corporation since
December 2000. Mr. Muir has been Chief Financial Officer of Maple Leaf Foods
Inc. (food processing) since May 1995. Mr. Muir is also a director of a number
of its wholly owned subsidiaries and is a director of Canada Bread Company
Limited (food processing). Before joining Maple Leaf Foods, Mr. Muir was Vice
President and Director of RBC Dominion Securities Inc. (investment banking)
where he was co-head of the Investment Banking Group from October 1994 to May
1995 and co-head of the Mergers and Acquisitions Group from 1986 to September
1994.
Gregory J. Orman. Mr. Orman has been a director of the Corporation since
September 1999. Mr. Orman has been the Chief Executive Officer and President of
KLT Inc., an unregulated subsidiary of Kansas City Power and Light Company
(utility) since January 2000. Mr. Orman has also been Chairman of Strategic
Energy, L.L.C. (energy services) since February 1999, Chairman of Custom Energy
Holdings, L.L.C. (energy services) since July 1999, and a member of the
Management Committee of Custom Lighting Services, L.L.C. (outdoor lighting
contractor) since July 1997. Mr. Orman was President of KLT Energy Services
Inc. from November 1996 to January 2000, Chairman of Nationwide Electric, Inc.
from February 1998 to September 1999, Chief Executive Officer and President of
Custom Energy, L.L.C. (energy services) from January 1997 to July 1999, and
Chief Executive Officer of Environmental Lighting Concepts, Inc. (energy
services) from December 1994 to January 1997.
Allan R. Twa. Mr. Twa has been a director of the Corporation since August
1985. Mr. Twa has been a partner with the law firm of Burnet, Duckworth &
Palmer LLP for the past 24 years. Mr. Twa is also the Secretary of ARC Energy
Trust and ARC STRATEGIC Energy Fund (investment management) and is a director
of Gauntlet Energy Corporation (oil and gas), Humboldt Energy Corporation (oil
and gas) and Diaz Resources Ltd. (oil and gas).
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of January 31, 2001, the security
ownership of the Corporation of each shareholder (including any "group" as that
term is used in Section 13(d)(3) of the U.S. Securities Exchange Act of 1934,
as amended) who, to the knowledge of the Board of Directors, owned beneficially
more than five percent of the Common Shares, each director, each executive
officer named in the Summary Compensation Table (see "Executive Compensation"
below) who owned beneficially any Common Shares and all current directors and
executive officers of the Corporation as a group. Except as indicated in the
footnotes to the table, all such shares are owned with sole voting and
investment power.
Common Shares Percent
Name Owned Beneficially(a) of Class
---- --------------------- --------
WorldCom, Inc............................. 9,848,315(b) 15.03%
The Palladin Group, L.P................... 4,075,630(c) 6.28
John D. Amodeo............................ 120,787(d) *
Gilbert S. Bennett........................ 54,000(e) *
Frederick C. Green IV..................... 318,411(f) *
Jean-Rene Halde........................... 20,667(g) *
Michael D. Hanna.......................... 121,667(g) *
Wade C. Lau............................... 24,167(g)(h) *
Paul D. Melnuk............................ 834,654(i) 1.29
James W. Moir, Jr......................... 70,000(e) *
Thomas P. Muir............................ 25,000(j) *
John R. Naccarato......................... 89,829(k) *
Gregory J. Orman.......................... 1,421,430(l) 2.21
Jonathan J. Taylor........................ 175,692(m) *
Allan R. Twa.............................. 55,000(e) *
All current directors and executive
officers as a group (13 persons)......... 3,064,973(n) 4.69
- --------
* Less than one percent.
(a) Includes Common Shares held and Common Shares underlying options and
warrants that are currently exercisable or exercisable within 60 days of
January 31, 2001.
(b) Includes 1,200,000 shares issuable pursuant to a warrant to purchase
shares. The address of WorldCom, Inc. is 500 Clinton Center Drive, Clinton,
Mississippi 39056.
(c) Includes 610,969 shares issuable pursuant to warrants to purchase shares.
The shares and warrants to purchase shares are held by seven investment
funds which are managed by The Palladin Group, L.P. The address of The
Palladin Group, L.P. is 195 Maplewood Avenue, Maplewood, New Jersey 07040.
(d) Includes 116,667 shares issuable upon the exercise of currently exercisable
stock options.
(e) Includes 50,000 shares issuable upon the exercise of currently exercisable
stock options.
(f) Includes 241,000 shares issuable upon the exercise of currently exercisable
stock options.
(g) Includes 16,667 shares issuable upon the exercise of currently exercisable
stock options.
(h) Includes 2,500 shares issuable pursuant to warrants to purchase shares.
(i) Includes 14,100 shares held by Donna L. Melnuk, Mr. Melnuk's spouse, and
450,000 shares issuable upon the exercise of currently exercisable stock
options or options exercisable within 60 days.
(j) Includes 20,000 shares held by T&P Investments Inc. Mr. Muir and his spouse
each own 50% of the outstanding capital stock of T&P Investments Inc.
(k) Includes 86,667 shares issuable upon the exercise of currently exercisable
stock options and 734 shares held by Mr. Naccarato's spouse under a
Registered Retirement Savings Plan.
7
(l) Includes 1,410,281 shares and warrants to purchase 11,149 shares owned by
Reardon Capital LLC, a company controlled by Mr. Orman.
(m) Includes 89,167 shares issuable upon the exercise of currently exercisable
stock options.
(n) Includes 993,531 shares issuable upon the exercise of currently exercisable
stock options, 2,500 shares issuable pursuant to warrants to purchase
shares held by Wade C. Lau, 14,100 shares held by Paul D. Melnuk's spouse,
20,000 shares held by T&P Investments Inc., of which Thomas P. Muir and his
spouse each own 50% of the outstanding capital stock, 734 shares held by
John R. Naccarato's spouse, 1,410,281 shares held by Reardon Capital LLC, a
company controlled by Gregory J. Orman, and 11,149 shares issuable pursuant
to warrants to purchase shares held by Reardon Capital LLC.
Section 16(a) Beneficial Ownership Reporting Compliance
Commencing in 2001, the rules of the U.S. Securities and Exchange Commission
will require that the Corporation disclose late filings of reports of stock
ownership and changes in stock ownership by its executive officers and
directors.
8
EXECUTIVE COMPENSATION
Executive Compensation
The following table sets forth all compensation paid or awarded for services
in all capacities to Bracknell and its subsidiaries for the fiscal years ended
October 31, 2000, 1999 and 1998 by the Chief Executive Officer and the four
other most highly compensated executive officers of Bracknell (the "Named
Executive Officers") during the fiscal year ended October 31, 2000. Although
compensation may have been paid in Canadian dollars, to be consistent with
Bracknell's practice of reporting in U.S. dollars, all amounts set forth in the
Summary Compensation Table are stated in U.S. dollars.
Summary Compensation Table(a)
Long-Term
Annual Compensation
Compensation(b) Awards
------------------------ ------------
Securities
Under
Name and Fiscal Options All Other
Principal Position Year Salary Bonus Granted Compensation(c)
------------------ ------ -------- -------- ------------ ---------------
Paul D. Melnuk......... 2000 $301,245 $400,000 -- $16,608
President and Chief 1999 201,380 244,343 600,000 10,775
Executive Officer(d) 1998 -- -- -- --
Frederick C. Green IV.. 2000 200,000 300,000 150,000 6,174
Executive Vice
President and 1999 -- -- 282,000 --
Chief Operating
Officer(e) 1998 -- -- -- --
John D. Amodeo......... 2000 152,623 49,748 -- 13,496
Former Executive Vice
President 1999 37,553 100,415 200,000 9,037
and Chief Financial
Officer(f) 1998 -- -- -- --
Jonathan J. Taylor..... 2000 152,623 192,381 -- 13,063
Executive Vice
President(g) 1999 139,160 150,623 130,000 9,037
1998 87,498 139,348 -- 6,518
John R. Naccarato...... 2000 117,851 112,035 100,000 12,315
Corporate Counsel and 1999 39,817 107,109 40,000 4,369
Secretary(h) 1998 -- -- -- --
- --------
(a) Compensation may have been paid in Canadian dollars. The rates of exchange
used to convert Canadian dollars to U.S. dollars were: 1998: 1.54; 1999:
1.49; 2000: 1.49.
(b) Perquisites and other personal benefits do not exceed the lesser of
$33,472 (Cdn. $50,000) and 10% of the total of the annual salary and bonus
for any of the Named Executive Officers. Bonuses were paid with respect to
calendar years.
(c) Amounts referred to in this column reflect the amounts contributed by the
Corporation to defined contribution pension plans, registered retirement
savings plans and the employee share purchase plans, and life and/or
disability insurance premiums paid by the Corporation. During fiscal 2000,
amounts associated with company-paid life and/or disability insurance were
as follows: Mr. Melnuk ($1,500), Mr. Green ($1,333), Mr. Amodeo ($1,421),
Mr. Taylor ($987) and Mr. Naccarato ($963). During fiscal 2000, amounts
associated with company contributions for the employee share purchase
plans were as follows: Mr. Melnuk ($6,066), Mr. Green ($1,754), Mr. Amodeo
($3,033), Mr. Taylor ($3,033) and Mr. Naccarato ($2,308). The remaining
amounts were contributed by the Corporation to defined contribution
pension plans and registered retirement savings plans.
(d) Mr. Melnuk became an employee of Bracknell on March 1, 1999.
9
(e) Mr. Green became an employee of Bracknell on September 30, 1999. On
September 30, 1999, the Corporation granted Mr. Green options to purchase
282,000 shares in substitution for options to purchase shares of
Nationwide Electric, Inc.
(f) Mr. Amodeo became an employee of Bracknell on August 1, 1999. Mr. Amodeo
resigned as Executive Vice President and Chief Financial Officer on
December 31, 2000.
(g) During fiscal 2000, Mr. Taylor received a special bonus of $67,344 for the
sale of Profac Facilities Management Services, Inc.
(h) Mr. Naccarato became an employee of Bracknell on May 17, 1999.
Stock Option and Purchase Plans
The Corporation maintains a stock option plan (the "SOP") which it proposes
to amend to increase the number of shares reserved for option grants, to relate
vesting of options to the Corporation's performance and to make certain other
amendments which are summarized in the section "Amendments to the Corporation's
Stock Option Plan" below and which are included in the form of the amended SOP
attached hereto as Appendix B.
Description of the Current SOP
The following is a summary of the principal features of the SOP as currently
in effect prior to the proposed amendment.
Administration of the SOP. The SOP is administered by the Board of
Directors. The Board of Directors has the authority to determine the
individuals to whom options will be granted; the size and terms of the options;
the date of grant; the terms of vesting; and the date of exercisability. It has
the ability to amend options previously granted and to determine the objectives
and conditions for earning options. In addition, the Board of Directors may
establish performance goals to be achieved within performance periods that it
selects, using such measures of performance as it may choose for purposes of
granting, vesting, payment or other entitlements to options.
Eligible Participants. All employees, officers and directors of the
Corporation and its subsidiaries are eligible to participate in the SOP.
Share Limitations. The aggregate number of Common Shares that may be
delivered or purchased or used for reference purposes under the SOP for all
participants is 4,280,344. This number includes shares previously issued or
subject to prior plan awards. Common Shares issued under the SOP may be
authorized but unissued shares. Any Common Shares subject to an option that for
any reason expires or is terminated unexercised will again be available for
issuance under the SOP. A participant may receive multiple grants under the
SOP, although no more than 5% of the aggregate number of the issued and
outstanding Common Shares may be subject to options to any one individual. In
the event of any subdivision, consolidation or reclassification of the
outstanding Common Shares, the Board of Directors may make certain adjustments
under the SOP, including adjustments in the number of Common Shares subject to
existing or future option grants and in the exercise price of an outstanding
option grant.
Exercise Price. The Board of Directors determines the exercise price of an
option at the time the option is awarded. The price may not be less than 100%
of the fair market value of the Common Shares on the date of grant. Upon
exercise, the exercise price must be paid in cash.
Term and Vesting of Options. Options issued under the SOP may be exercised
during a period determined by the Board of Directors which may not exceed ten
years. A stock option generally expires three months after termination of
employment, if employment ceased due to death, disability, retirement or
termination without cause, or immediately upon termination, if employment
ceased for any other reason.
10
Change in Control. In the event that a takeover bid is made by way of take-
over bid circular to all or substantially all of the holders of Common Shares,
all outstanding options will automatically become exercisable for a period of
30 days following the mailing date or for such other period as the Board may
determine.
Amendment and Termination. The Board of Directors has the power to terminate
or amend the SOP, but no action may be taken that would adversely affect any
rights or obligations respecting options that have previously been granted. In
addition, without the approval of the Corporation's shareholders, no amendment
may be made to the SOP that increases the maximum number of Common Shares
subject to the SOP or the maximum awards that may be granted during any period
to any individual, or extends the maximum period during which awards may be
granted. Otherwise, the SOP and the rules adopted under the SOP may be amended
by the Board of Directors without further shareholder approval. Amendments made
without shareholder approval could increase the costs to the Corporation under
the SOP, although the amount of such costs is not determinable.
Option Grants during Fiscal 2000
The following table sets forth information with respect to options granted
to the Named Executive Officers during the fiscal year ended October 31, 2000.
All such options ("Performance Options") vest in seven years. Conditional upon
the market price of the Common Shares (calculated as provided in the SOP)
increasing by specified amounts over the three-year period following the grant
date, the vesting of Performance Options may be accelerated. In general terms,
A. such accelerated vesting could result in (i) one-third of the
Performance Options being vested by the end of the first year following
the grant date, (ii) an aggregate of two-thirds of the Performance
Options being vested by the end of the second year following the grant
date, and (iii) all of the Performance Options being vested by the end
of the third year following the grant date, and
B. to achieve the increase in the market price of Common Shares necessary
to accelerate the vesting of Performance Options as described above,
the market price of Common Shares would have to increase from the grant
date at a compounded annual rate of at least 20%.
Performance Option Grants During Fiscal 2000
% of Total
Securities Options
under Granted to Exercise or Grant Date
Options Employees in Base Price(a) Expiration Value(a)(b)
Name Granted Fiscal Year ($/Security) Date ($)
- ---- ---------- ------------ --------------- ------------- -----------
Frederick C. Green, IV.. 150,000 7.2 100,000 @ $3.93 Nov. 3, 2009 $423,000
Executive Vice President
and 50,000 @ $4.36 Dec. 16, 2009
Chief Operating Officer
John R. Naccarato....... 100,000 4.8 $4.06 Dec. 23, 2009 281,000
Corporate Counsel and
Secretary
- --------
(a) Canadian dollars converted to U.S. dollars at an exchange rate of 1.49.
(b) Calculated using the Black-Scholes pricing model. Underlying assumptions
used in the calculation include a ten-year expiration, a current market
and strike price based on the exercise price, a ten-year volatility
assumption of 50.8%, a current dividend yield of 0% and a risk-free rate
of return of 5.80%. The Corporation has elected to illustrate the
potential realizable value using the Black-Scholes pricing model as
permitted by the rules of the U.S. Securities and Exchange Commission.
This does not represent the Corporation's estimate or projection of future
stock price or of the assumptions utilized. Actual gains, if any, upon
future exercise of any of these options will depend on the actual
performance of the Common Shares.
Plan Benefits
During fiscal 2000, stock options to purchase Common Shares were granted to
the Named Executive Officers, as set forth in the table captioned "Performance
Option Grants During Fiscal 2000" above. Stock
11
options were granted during the year to all executive officers of the
Corporation as a group to purchase 250,000 Common Shares at an average weighted
exercise price of $4.11 per share. Stock options were granted to non-executive
directors of the Corporation as a group to purchase 150,000 Common Shares at an
average weighted exercise price of $4.98 per share. In addition, stock options
were granted to all other employees of the Corporation as a group to purchase
1,689,152 Common Shares at an average weighted exercise price of $4.56 per
share. The number of options or other awards to be granted in the future to the
Corporation's executive officers and to other employees is not determinable at
this time.
On February 16, 2001, the closing price on the NASDAQ National Market System
of the Common Shares was $5.38 per share.
Option Exercises and Values for Fiscal 2000
The following table sets forth the number and value, net of exercise price,
of Common Shares acquired upon exercise of options on the date of exercise by
the Named Executive Officers during the past fiscal year, and the number and
value of options held by such executive officers at October 31, 2000.
Aggregated Option Exercises
During Fiscal 2000 and Fiscal Year-End Option Values
Value of Unexercised in-
Unexercised Options at the-Money Options at
October 31, 2000 October 31, 2000(a)
------------------------- -------------------------
Securities Aggregate
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- --------- ----------- ------------- ----------- -------------
Paul D. Melnuk......... -- -- 350,000 300,000 $1,134,200 $875,800
President and Chief
Executive Officer
Frederick C. Green, -- -- 120,500 311,500 337,900 868,200
IV....................
Executive Vice
President and Chief
Operating Officer
John D. Amodeo......... -- -- 116,667 83,333 309,300 220,900
Former Executive Vice
President and Chief
Financial Officer
Jonathan J. Taylor..... -- -- 81,667 48,333 217,500 129,100
Executive Vice
President
John R. Naccarato...... -- -- 53,333 86,667 155,000 252,400
Corporate Counsel and
Secretary
- --------
(a) Based on a share price of Cdn. $10.40 on October 31, 2000. Canadian dollars
converted to U.S. dollars at an exchange rate of 1.49.
Employee Share Purchase Plans
The Corporation has established employee share purchase plans (the "Share
Purchase Plans") to facilitate investment by eligible employees in the Common
Shares and to allow employees of the Corporation to participate in the
appreciation thereof. Any employee of the Corporation, or of any subsidiary or
associate of the Corporation, who has satisfied 12 months of continuous
service, as such term is defined in the Share Purchase Plans, with the
Corporation or, where applicable, the relevant subsidiary or associate, is a
resident of the United States or Canada and does not own or control, directly
or indirectly, 5% or more of the outstanding
12
Common Shares of the Corporation, is eligible for membership in the Share
Purchase Plans. The requirements for service tenure and/or U.S. or Canadian
residency may be waived by the Chief Executive Officer. Eligible employees may
contribute up to 10% of their wages by way of payroll deductions toward the
purchase of Common Shares under the Share Purchase Plans.
Under the terms of the Share Purchase Plans, the participant's employer is
required to contribute $1 for every $2 contributed by the employee, up to a
maximum employer contribution of 2% of the participant's normal wages. All
contributions made under the Share Purchase Plans are used by the
administrative agent for the Share Purchase Plans, CIBC Mellon Trust Company,
to purchase Common Shares on the open market. All Common Shares purchased on
behalf of participants under the Share Purchase Plans vest automatically, and
are retained in the participant's individual account with the CIBC Mellon Trust
Company. Participants may cancel their participation in the Share Purchase
Plans; however, they must then wait twelve months prior to becoming eligible to
again participate in the Share Purchase Plans.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee of the Board are Gregory J. Orman,
Michael D. Hanna and James W. Moir, Jr. Mr. Orman and Mr. Hanna became members
of the Compensation Committee in February 2000, succeeding Allan R. Twa and
Michael J. Sabia, who were members of the Compensation Committee until their
terms expired on that date. Mr. Orman was Chairman of Nationwide Electric, Inc.
from 1998 to 1999 prior to its acquisition by the Corporation. Mr. Hanna was
Chief Executive Officer and Chairman of Sunbelt Integrated Trade Services, Inc.
from 1998 to March 2000, prior to its acquisition by the Corporation. Neither
Mr. Orman nor Mr. Hanna has held any office with the Corporation or its
subsidiaries since those acquisitions.
Employment Agreements
Paul D. Melnuk
The Corporation has entered into an employment agreement with Paul D. Melnuk
effective as of March 2, 1999. Under the terms of this agreement, Mr. Melnuk
receives a salary of $301,245 per annum and is entitled to a yearly cash
incentive bonus, at the discretion of the Board, targeted at 100% of his salary
for achieving expected levels of performance. Mr. Melnuk also received an
initial grant of 300,000 stock options that will vest in three equal tranches
over three years, commencing on the date of employment. Mr. Melnuk has been
granted an additional 300,000 performance-based stock options that will vest in
seven years. These options may vest on an accelerated basis over three years
from the date of grant so long as the Corporation's shareholders experience at
least 20% compounded annual growth in share price over the exercise price.
Upon the termination of Mr. Melnuk's employment by the Board other than for
cause, he will be entitled to receive 30 months total compensation in lieu of
notice. Total compensation is comprised of base salary, benefits, and bonus
equal to the average cash incentive bonus received by Mr. Melnuk over the two
preceding years.
Frederick C. Green IV
The Corporation has entered into an employment agreement with Frederick C.
Green IV, effective as of September 30, 1999. Under the terms of this
agreement, Mr. Green receives a salary of $200,000 per annum and is entitled to
a yearly cash incentive bonus, at the discretion of the Board, targeted at 100%
of his salary for achieving expected levels of performance. Mr. Green was
previously employed as the President and Chief Executive Officer of Nationwide
Electric, Inc. prior to its acquisition by Bracknell. Mr. Green has been
granted 150,000 performance-based stock options that will vest in seven years.
These options may vest on an accelerated basis over three years from the date
of grant so long as the Corporation's shareholders experience at least a 20%
compounded annual growth in share price over the exercise price.
13
Upon the termination of Mr. Green's employment other than for cause, he will
be entitled to receive 12 months total compensation in lieu of notice. Total
compensation is comprised of base salary, benefits, and bonus equal to the
average cash incentive bonus received by Mr. Green over the two preceding
years. If a change in control of Bracknell results in the termination of Mr.
Green's employment, Mr. Green will be entitled to receive 24 months total
compensation in lieu of notice.
Mr. Green received an interest-free loan from Nationwide Electric, Inc. in
the amount of $150,000 prior to the acquisition of Nationwide Electric, Inc. by
Bracknell. The loan was provided pursuant to Mr. Green's previous employment
agreement under which he agreed not to compete with Nationwide Electric, Inc.
after expiration or termination of his employment. Such non-compete obligations
and the terms of the loan have been carried forward into Mr. Green's current
employment agreement with Bracknell.
John D. Amodeo
The Corporation has entered into an employment agreement with John D.
Amodeo, effective as of August 1, 1999. Mr. Amodeo resigned as Executive Vice
President and Chief Financial Officer of the Corporation effective January 1,
2001. Under the terms of this agreement, Mr. Amodeo received a salary of
$150,623 per annum and was entitled to a yearly cash incentive bonus, at the
discretion of the Board, targeted at 100% of his salary for achieving expected
levels of performance. Under the agreement, Mr. Amodeo is receiving 12 months
total compensation in lieu of notice. Total compensation is comprised of base
salary, benefits, and bonus equal to his annual salary. In addition, options to
purchase 200,000 Common Shares held by Mr. Amodeo have vested.
John A. Witham
The Corporation has entered into an employment agreement with John A.
Witham, effective as of November 1, 2000. Under the terms of this agreement,
Mr. Witham receives a salary of $200,000 per annum and is entitled to a yearly
cash incentive bonus, at the discretion of the Board, targeted at 100% of his
salary for achieving expected levels of performance. Mr. Witham has been
granted 200,000 performance-based stock options subject to shareholder approval
that will vest in seven years. These options may vest on an accelerated basis
over three years from the date of grant so long as the Corporation's
shareholders experience at least 20% compounded annual growth in share price
over the exercise price.
Upon the termination of Mr. Witham's employment other than for cause, he
will be entitled to receive 12 months total compensation in lieu of notice.
Total compensation is comprised of base salary, benefits, and bonus equal to
the average cash incentive bonus received by Mr. Witham over the two preceding
years. If a change in control of Bracknell results in the termination of Mr.
Witham's employment, Mr. Witham will be entitled to receive 24 months total
compensation in lieu of notice.
John R. Naccarato
The Corporation has entered into an employment agreement with John R.
Naccarato, effective as of January 1, 2001 pursuant to which he will serve as
President of Neal Electric, Inc., a wholly owned subsidiary of Bracknell. Mr.
Naccarato resigned as Corporate Counsel of Bracknell effective January 1, 2001
to accept his position with Neal Electric, Inc., and continues to serve as
Secretary of Bracknell. Under the terms of this agreement, Mr. Naccarato
receives a salary of $175,000 per annum and is entitled to a yearly cash
incentive bonus, at the discretion of the Board, targeted at 100% of his salary
for achieving expected levels of performance. Mr. Naccarato also received an
initial grant of 40,000 stock options that will vest in equal tranches over
three years, commencing on the date of employment. Mr. Naccarato has been
granted an additional 100,000 performance-based stock options that will vest in
seven years. These options may vest on an accelerated basis over three years
from the date of grant, so long as the Corporation's shareholders experience at
least a 20% compounded annual growth in share price over the exercise price.
Upon the termination of Mr. Naccarato's employment other than for cause, he
will be entitled to receive 12 months total compensation in lieu of notice.
Total compensation is comprised of base salary, benefits, and
14
bonus equal to the average cash incentive bonus received by Mr. Naccarato over
the two preceding years. If a change in control of Bracknell results in the
termination of Mr. Naccarato's employment, Mr. Naccarato will be entitled to
receive 24 months total compensation in lieu of notice.
REPORT ON EXECUTIVE COMPENSATION
Compensation Philosophy and Objectives
The Compensation Committee has, as part of its mandate, primary
responsibility for making recommendations for approval by the Board with
respect to the remuneration of executive officers of the Corporation. None of
the members of the Compensation Committee is an officer, employee or former
officer or employee of the Corporation. The Compensation Committee also makes
recommendations to the Board regarding the Corporation's performance-based
incentive compensation plan and the SOP and reviews the design and
competitiveness of the Corporation's compensation plan as a whole. Acting on
behalf of the Board, the Committee's responsibilities include:
. reviewing the performance of the Chief Executive Officer and other
executive officers;
. assessing and recommending to the Board total compensation packages for
the Chief Executive Officer and other executive officers;
. reviewing the general compensation philosophy for all employees,
including the Chief Executive Officer and other executive officers;
. administering the Corporation's incentive compensation plan by
recommending to the Board performance objectives, target bonuses and
actual bonus payments for the Chief Executive Officer and other
executive officers; and
. administering the Corporation's employee stock option and stock purchase
plans, including recommending to the Board eligibility, the number and
type of options to be granted and the terms of such grants.
The Corporation has adopted a compensation philosophy which is intended to
support its operating philosophy and strategic goals, which require that a
majority of the key employees of the Corporation be both opportunistic and
entrepreneurial. Those traits are considered by the Corporation to be key
components in allowing the Corporation to achieve its growth goals.
Base Salary
The Corporation's compensation program for senior executives consists of a
base level of compensation at what it believes to be the low end of market
ranges but sufficient to attract individuals with appropriate talents and
skills, and offers significant potential incentive reward for the achievement
of results. Base salary has been set for the positions occupied by
substantially all of the key employees of the Corporation at the low end of
market range for comparable employees of comparable corporations. Total
compensation contains a significant component of "at risk" amounts for
achievement of desired results with the objective of compensating key employees
at a level equal to the top quartile of comparable employees of comparable
corporations in the event that results are achieved in the top quartile of
performance.
Incentive Compensation Payments
Performance-based incentive compensation payments have historically been
determined primarily in relation to the net pre-tax profits of the Corporation
or, for the employees of the Corporation's operating subsidiaries, in relation
to the profitability of the profit center, division or region for which they
are responsible. As the Corporation has acquired operations across North
America, the Corporation intends to implement a performance-based incentive
compensation program across operating subsidiaries that recognizes not only
financial performance, including, but not limited to, cash return on invested
capital and earnings per share growth, but also incorporates stock price
performance and key value-oriented measures specific to their business, such as
improvement in the quality of earnings, operating margins, customer
satisfaction, working capital turns, employee satisfaction, and the development
of strategic commercial initiatives. The alignment of
15
internal financial management systems with market forces ensures that all
decision processes and incentive programs are based on a common set of
criteria.
Cash bonuses for executive officers reflect both individual and corporate
performance during the year and the Corporation's success in achieving its
goals. The performance criteria considered in determining cash bonus awards
vary in accordance with the position and responsibilities of the individual
being evaluated. Financial, operational and corporate development indicators,
combined with personal achievements that demonstrate a contribution to
corporate growth, are among the significant considerations in determining
bonuses for executive officers. Recommendations on cash bonuses are made to the
Compensation Committee in the following manner:
Recommendation for: Made by:
President and Chief Executive Officer Compensation Committee Chairman
Other senior executives President and Chief Executive Officer
Other executives President and Chief Executive Officer in
consultation with other senior executives
Stock Options
The Board regards the awarding of stock options as a key long-term, at-risk
component of the Corporation's compensation arrangements for key employees. The
Board will grant options under the SOP to key employees on a discretionary,
annual basis, based on factors such as the individual's level within the
Corporation, recent performance and future potential and importance to the
long-term success of the Corporation. In addition, the Corporation has adopted
a preference to grant performance-based options to key employees, which provide
that the option holder will not realize any value from the option unless
specified conditions are met, such as the share price exceeding a certain value
above the grant price.
Chief Executive Officer
Mr. Paul D. Melnuk has served as President and Chief Executive Officer since
March 2, 1999. The mandate established by the Board of Directors for the
President and Chief Executive Officer of the Corporation was primarily: (a) to
employ the Corporation's available cash and other sources of capital to grow
the Corporation's business and achieve higher returns for investors; and (b) to
provide the strategic direction for the Corporation, including promoting
continuous operational improvement, improvement in the quality of the
Corporation's earnings, and cultural development focused on servicing customer
needs.
During 2000, under the leadership and the direction of Mr. Melnuk, the
Corporation completed the acquisition of several U.S.-based companies that more
than tripled the revenue base of the Corporation, improved the mix of value-
added services, and broadened and deepened the operating and executive
management team. Operating earnings more than doubled to $0.48 per share in
fiscal 2000, and operating margins as a percentage of revenue increased from
4.4% to 7.4% reflecting progress in improving the underlying performance and
quality of the business pursued. The Corporation secured several revisions of
its bank facility that provided flexibility to continue to pursue new growth
activities.
All executive officer compensation decisions have been made by the Board of
Directors on the recommendation of the Compensation Committee. The Board of
Directors will continue to assess the above factors underlying the performance
mandate of the President and Chief Executive Officer.
Report presented by the Compensation Committee:
Gregory J. Orman--Chairman
Michael D. Hanna
James W. Moir, Jr.
16
PERFORMANCE GRAPH
The following graph and table compare the total cumulative shareholder
return (assuming a $100 initial investment) in the Common Shares with the
cumulative return of the TSE 300 Stock Index for the five-year period ending
October 31, 2000.
Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31
1995 1996 1997 1998 1999 2000
------- ------- ------- ------- ------- -------
TSE 300 Index(a).......... $100.00 $129.08 $139.72 $136.11 $161.32 $206.81
Common Shares(b).......... $100.00 $106.27 $182.35 $194.12 $235.29 $407.84
- --------
(a) The TSE 300 Index is the total index return.
(b) The Corporation has not paid any dividends on the Common Shares at any time
during the five fiscal years ended October 31, 2000.
[GRAPH APPEARS HERE]
COMPENSATION OF DIRECTORS
All directors, other than Gilbert S. Bennett and Paul D. Melnuk, received
the following fees for serving on the Board or its committees. Mr. Melnuk
received no compensation from the Corporation other than his compensation as
President and Chief Executive Officer of the Corporation.
Annual Retainer.................................................. $10,042
Fee for Each Board Meeting....................................... 669
Fee for Each Committee Meeting................................... 669
Mr. Bennett receives $33,472 per annum as an annual retainer to serve as
Chairman of the Board. In addition, directors are eligible to receive
discretionary grants of stock options pursuant to the SOP.
17
STATEMENT OF CORPORATE GOVERNANCE
Composition of the Board
The Board of Directors of the Corporation has considered its corporate
governance practices in light of the guidelines (the "Guidelines") set out in
the Report of The Toronto Stock Exchange Committee on Corporate Governance in
Canada (the "TSE Report") and is satisfied that the Board discharges its
responsibility effectively and operates independently of management. The
Corporation's current approach to the governance issues addressed in the
Guidelines is described below.
The Board currently consists of nine directors. The Board has implemented
action to review the appropriate composition of the Board and the manner of
selecting directors to ensure that there is an appropriate mix of business,
technical, commercial, and financial experience maintained relative to the
current economic activities of the Corporation and its corporate development
initiatives. The Board and the Compensation Committee of the Board will
continue to consider the remuneration paid by the Corporation to its directors
to ensure that the amounts are both sufficient and competitive with
remuneration paid to directors of comparable corporations.
The TSE Report provides that an unrelated director is "a director who is
independent of management and is free from any interest and any business or
other relationship which could, or could reasonably be perceived to, materially
interfere with the director's ability to act with a view to the best interests
of the corporation, other than interests and relationships arising from
shareholding." In defining an unrelated director, the TSE Report emphasizes the
ability of a director to exercise objective and independent judgement.
The Board has considered the relationship of each of the directors to the
Corporation. Of the directors currently in office who have been proposed for
election, the Board has concluded that eight directors are unrelated to the
Corporation. Mr. Twa's law firm provides legal services to the Corporation, but
these services are not material to the Corporation, Mr. Twa or to his firm. The
Corporation has entered into transactions with Mr. Orman, Mr. Lau and Mr. Hanna
or entities with which they have relationships. None of these transactions is
material to the Corporation or to any of the directors and the Corporation has
considered and believes that the terms of these transactions are on terms no
less favorable to the Corporation than could be obtained in a transaction with
an independent third party. None of the other directors with the exception of
Mr. Melnuk has any relationship with the Corporation other than as a director
or shareholder.
The Governance Committee of the Board is mandated to recommend to the Board
any processes which it feels would be useful in assessing the effectiveness of
the Board as a whole and the effectiveness of the Board committees described
below. The Board has no present intention to introduce any system to formally
assess the contribution of individual directors because it believes that the
relevant consideration is the effectiveness of the Board as a whole and the
various committees of the Board. It is also concerned that such an assessment
process could lead to dissension and a loss of the Board cohesiveness that has
contributed to its effective operation to date. The Governance Committee
provides a forum for individual directors to express concerns involving matters
which may not be appropriate for discussion at a full Board meeting, including
conflicts of interest and the performance of the Board, its committees or
individual directors.
Independence of the Board from Management
All directors other than Mr. Melnuk are unrelated to the Corporation. At
each meeting of the Board, unrelated directors are given the opportunity to
meet without management or the related director being present. In 1997, the
Board created the position of non-executive Chairman of the Board, currently
occupied by Mr. Bennett.
Mandates of the Board and Management
The mandate of the Board of Directors is to manage or supervise the
management of the business and affairs of the Corporation and to act with a
view to the best interests of the Corporation.
18
Committees of the Board
The Board has established three committees of the Board and has given each
committee the responsibility to provide initial, in-depth consideration to
various matters falling within the Board's mandate. Each committee is composed
entirely of outside directors. None of the committees has decision-making
authority, but rather each committee considers the issues within its mandate
and makes recommendations to the full Board.
Board Member Audit Compensation Governance
------------------------------------------
Gilbert S.
Bennett +
------------------------------------------
Jean-Rene Halde X*
------------------------------------------
Michael D. Hanna X
------------------------------------------
Wade C. Lau X
------------------------------------------
Paul D. Melnuk
------------------------------------------
James W. Moir,
Jr. X X*
------------------------------------------
Thomas P. Muir
------------------------------------------
Gregory J. Orman X* X
------------------------------------------
Allan R. Twa X X
+ Chairman of the Board of Directors
* Serves as Committee Chairman.
During fiscal 2000 there were 25 full Board meetings, 10 Audit Committee
meetings, three Compensation Committee meetings and two Governance Committee
meetings. All members of the Board attended at least 75% of the full Board and
committee meetings during the period in which they served on the Board or
committee.
Audit Committee
The functions of the Audit Committee are described below under the heading
"Audit Committee Report."
Compensation Committee
The Compensation Committee endeavors to ensure that senior executives are
effectively compensated and makes recommendations to the full Board in respect
of the Corporation's compensation program as a whole, including the
remuneration of the executive officers and the granting of stock options to
all employees and directors.
Governance Committee
The Governance Committee develops the Corporation's approach to corporate
governance and makes recommendations to the Board concerning the following:
. effectiveness of the systems of governance;
. size and composition of the Board;
. suitable candidates for nomination as directors; and
. mandate of each committee of the Board.
The Committee authorizes any director requests to engage an outside advisor
at the Corporation's expense. The Committee serves as a nominating committee
and will consider nominees for the Board recommended by shareholders.
19
Communication with Shareholders
The Corporation emphasizes clear and timely communication with its various
shareholders and strives to improve such communication wherever possible. The
Corporation provides information through its Internet web site, investor
relations department, conference calls and numerous presentations to the
investment community and makes its senior officers available to shareholders to
discuss its business and results. Management reports to the Board any
significant or common concerns raised by shareholders.
Audit Committee Report
Each member of the Audit Committee is independent in the judgment of the
Corporation's Board of Directors and as required by the listing standards of
the National Association of Securities Dealers. The Audit Committee operates
under the Charter of the Audit Committee adopted by the Board of Directors in
December 2000. The Charter is attached to this Proxy Statement as Appendix A.
Management is responsible for preparing the Corporation's financial
statements and the independent auditors are responsible for auditing those
financial statements. The Audit Committee's primary responsibility is to
oversee the Corporation's financial reporting process on behalf of the Board of
Directors and to report the results of its activities to the Board, as
described in the Charter of the Audit Committee. The principal recurring duties
of the Audit Committee in carrying out its oversight responsibility include
reviewing and evaluating the audit efforts of the Corporation's independent
auditors, discussing with management and the independent auditors the adequacy
and effectiveness of the Corporation's accounting and financial controls, and
reviewing and discussing with management and the independent auditors the
Corporation's quarterly and annual financial statements.
The Audit Committee has reviewed and discussed with the Corporation's
management the audited financial statements of the Corporation for the fiscal
year ended October 31, 2000. The Audit Committee has also discussed with Arthur
Andersen LLP, the independent auditors of the Corporation, the matters required
to be discussed by Statement on Auditing Standards No. 61 (Communication with
Audit Committees). The Audit Committee has also received from the independent
auditors written affirmation of their independence as required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees)
and the Audit Committee has discussed with the auditors the firm's
independence.
Based upon the review and discussions summarized above, the Audit Committee
recommended to the Board of Directors that the audited financial statements of
the Corporation, as of October 31, 2000 and for the year then ended, be
included in the Corporation's Annual Report on Form 10-K for the year ended
October 31, 2000 for filing with the U.S. Securities and Exchange Commission.
Audit Committee:
Jean-Rene Halde--Chairman
Wade C. Lau
Allan R. Twa
Auditor Independence
For the year ended October 31, 2000, the Corporation paid Arthur Andersen
LLP, its independent auditors, the following fees for audit and non-audit
services, respectively:
Audit Fees.................................................... $ 659,667
All Other Fees(a)............................................. 1,219,537
----------
$1,879,204
==========
- --------
(a) Consists of $566,502 for tax services, $320,667 for financing-related
services, $266,486 for acquisition-related services and $65,882 for other
assurance services.
The Audit Committee concluded that the non-audit services did not adversely
impact the independence of Arthur Andersen LLP.
20
Directors' and Officers' Insurance
The Corporation has purchased and maintains a policy of insurance for the
benefit of the directors and officers of the Corporation as permitted by
subsection 136(4) of the Business Corporations Act (Ontario). Such policy
insures directors and officers or, in circumstances where the Corporation's
indemnification of directors and officers is available, the Corporation against
certain liabilities incurred by the directors and officers in their capacity as
directors and officers of the Corporation, except where such liability relates
to the failure by a director or officer to act honestly and in good faith with
a view to the best interests of the Corporation.
An aggregate annual premium of $88,441 was paid by the Corporation for the
insurance for calendar 2000. No part of this premium was paid by the directors
or officers of the Corporation. The aggregate insurance coverage under the
policy is limited to $50 million and no deductible is payable by any director
or officer making a claim under the policy. A deductible of $250,000 per
incident is payable by the Corporation with respect to any claim for which the
Corporation's indemnification is available.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Corporation has, from time to time, entered into various transactions
with certain of its principal shareholders, officers and directors and entities
in which these parties have an interest. The Corporation believes that these
transactions have been on terms no less favorable to Bracknell than could be
obtained in a transaction with an independent third party.
Gregory J. Orman, a director of the Corporation, is a member, manager and
25% owner of Galt Investments, LLC. Galt Investments, LLC owns 100% of FRM
Associates, LLC. In connection with electrical services provided by Parsons
Electric Co., an indirect subsidiary of the Corporation, FRM Associates, LLC
made payments to Parsons Electric Co. of approximately $450,000 in 2000, and
proposes to make payments to Parsons Electric Co. of approximately $2,250,000
in 2001.
Michael D. Hanna, a director of the Corporation and a former shareholder of
Sunbelt Integrated Trade Services, Inc., is entitled to receive approximately
8.5% of any earn-out consideration payable in connection with the acquisition
by the Corporation of Sunbelt Integrated Trade Services, Inc. and its
subsidiaries. Mr. Hanna may elect to receive 50% of his apportioned amount of
the earn-out consideration in the form of Common Shares calculated on the basis
of $4.65 per share. No earn-out consideration has been due and payable to date.
In connection with the acquisition of Able Telcom Holding Corp. ("Able") by
the Corporation, WorldCom, Inc. entered into a commitment agreement with the
Corporation. Under the commitment agreement, WorldCom, Inc. agreed with the
Corporation and Able, among other things, (a) to make available to Able a
working capital advance in the amount of $40 million through purchase of a new
series of the Corporation's redeemable convertible preferred stock, (b) to make
available to Able any amount of funding in excess of $20 million to finance the
completion of specified work in specified businesses, (c) to provide an
indemnity to the Corporation and Able against various losses or claims,
including claims under surety bonds for specified contracts, (d) to restrict
transfer of Common Shares owned by WorldCom, Inc. and (e) to provide the
Corporation with a reasonable opportunity to provide its complete service
offering as a preferred vendor to WorldCom, Inc. WorldCom, Inc. also agreed
that it will not acquire any additional securities of the Corporation without
the consent of the Board of Directors.
WorldCom, Inc. completed its $40 million purchase of the Corporation's new
series of preferred stock on January 5, 2001. The preferred shares are not
entitled to a dividend and are non-voting. They are redeemable by the
Corporation at the issue price per share at any time. Subject to the reasonable
approval of the Corporation's lenders and starting six months after issuance,
WorldCom, Inc. may require the Corporation to redeem $10 million of the
preferred shares. At any time from one year from issuance, at the election of
21
WorldCom, Inc., the preferred shares are convertible to Common Shares at $8.75
per Common Share. The preferred shares are mandatorily redeemable at the
earlier of six years from the date they were issued or at the election of the
holder, on or after the date on which the Corporation receives proceeds from a
public debt or equity financing sufficient to repay all other indebtedness
which the Corporation is obligated to repay from such proceeds, with the
remaining proceeds.
In connection with the commitment agreement, a subsidiary of WorldCom, Inc.
and Able entered into a revised and restated master services agreement
replacing a master services agreement then in effect relating to services to be
performed by Able for WorldCom, Inc. that provides for (a) a new six year term,
with good faith negotiations after four years to extend the term of the
agreement, (b) increases in the minimum limits of local metropolitan network
build-out services by Able to 75% of WorldCom, Inc.'s requirements, minimum
yearly revenue to $55 million, and minimum revenue over the term to $390
million, (c) no termination for convenience by WorldCom, Inc. and (d) an
opportunity for Able to self-perform traditionally subcontracted services at
market competitive rates.
APPOINTMENT OF AUDITORS
Management proposes to nominate Arthur Andersen LLP, independent
accountants, of Minneapolis, Minnesota, the present auditors, as the auditors
of the Corporation to hold office until the close of the next annual meeting of
shareholders. Arthur Andersen LLP have been the auditors of the Corporation
continuously throughout the immediately preceding five fiscal years of the
Corporation. It is intended that on any ballot that may be called relating to
the appointment of auditors and the authorization of the directors to fix the
compensation to be paid to the auditors, the Common Shares represented by
proxies solicited in respect of the Meeting will be voted in favor of the
appointment of Arthur Andersen LLP as auditors of the Corporation and the
authorization of the directors to fix the compensation to be paid to the
auditors, unless a shareholder has specified otherwise. A representative of
Arthur Andersen LLP will be present at the Meeting with the opportunity to make
a statement if such representative desires to do so and will be available to
respond to appropriate questions.
Vote Required. The affirmative vote of the holders of a majority of the
outstanding Common Shares entitled to vote and represented in person or by
proxy is required for the appointment of the auditors and the authorization of
the directors to fix the compensation to be paid to the auditors.
The Board of Directors recommends a vote FOR the appointment of Arthur Andersen
LLP as auditors of the Corporation for fiscal 2001 and the authorization of the
directors to fix the compensation to be paid to the auditors.
AMENDMENTS TO THE CORPORATION'S STOCK OPTION PLAN
The Corporation proposes to amend the Corporation's stock option plan
("SOP") to increase the number of shares reserved for option grants to
9,500,000 shares, to relate vesting of options to the Corporation's performance
and to make certain other amendments as summarized below in "Amendments to the
SOP."
The Board of Directors recognizes that the Corporation experiences intense
competition from other companies for talented managers and employees and that
the Corporation's success is dependent upon its ability to attract, motivate
and retain such personnel, particularly for an emerging company such as
Bracknell. The Board has concluded that one of the best ways to compete for key
personnel is to offer significant potential rewards based upon the
Corporation's success through the grant of stock options. The Board of
Directors considers stock option plans as a flexible way for companies to share
ownership with employees, reward them for performance, and attract and retain a
motivated staff. For growth-oriented companies such as Bracknell, granting
stock options is also a method of preserving cash while providing employees
with the opportunity to participate in the future growth and share price
appreciation.
22
The ultimate impact of any employee ownership plan, including a stock option
plan, depends a great deal on the company and its goals for the plan, its
commitment to creating an ownership culture, the amount of training and
education it commits to explaining the plan, and the goals of individual
employees. In companies that demonstrate a true commitment to creating an
ownership culture, stock options can be a significant motivator. The
Corporation's practice in granting stock options reflects the philosophies,
management and business practices embodied by the following principles:
. create an ownership culture among employees through broad-based
participation in stock options;
. emphasize pay-for performance and accountability through the
introduction of performance stock options; and
. promote employee investment in the Corporation by prohibiting the
cashless exercise of stock options and promoting long-term ownership by
the directors and officers and all employees.
In March 1999, the Board determined to adopt the practice of granting
performance options ("Performance Options") to key employees as opposed to
conventional time-vesting stock options, to reflect the Board's objective to
implement an incentive compensation program aligned to support the achievement
of the Corporation's performance objectives. Under the performance stock option
grants made to date, the stock options vest on the seventh anniversary of the
date of grant, but may vest on an accelerated basis in equal tranches over
three years from the date of grant so long as the Corporation's shareholders
experience at least 20% compounded growth in share price over the exercise
price within the three years from the date of grant, measured on the basis of
the 20-trading-day average closing price for the Common Shares on The Toronto
Stock Exchange.
Traditionally, stock option plans have been used as a way for companies to
reward top management and "key" employees and link their interests with those
of the company and other shareholders. As companies have come to consider all
of their employees as "key," there has been an increase in the use of broad-
based stock option plans. Broad-based stock options have become more common in
high technology and growth-oriented companies and are becoming popular in many
companies in other industries as part of an overall equity compensation
strategy. The Board of Directors first introduced the broad-based stock option
approach in September 1999 in connection with the acquisition of Nationwide
Electric, Inc. This involved the grant of 1,104,594 stock options to
approximately 273 employees at all levels in the Nationwide organization. As
Bracknell has acquired other companies it has exchanged options held by
employees of the acquired company for an economically equivalent amount of
Bracknell options in order to provide incentives for employee retention and the
completion of transactions.
In August 2000, the Board granted approximately 1,000,000 Performance
Options to approximately 950 employees at all levels within the Corporation,
subject to the approval of the shareholders of a corresponding increase in the
number of shares reserved for issuance pursuant to stock options. Making the
vesting of stock options contingent upon achievement of share price performance
demonstrates the commitment of the Corporation towards continuous operational
improvement and growth. The vesting of such Performance Options would reflect
the success of the Corporation in executing its business plan, and would occur
concurrently with appreciation in the value of shareholder investment.
The SOP was adopted and approved by the shareholders in 1992. The SOP as
currently in effect is described in the section "Description of the Current
SOP" above.
In 1996, pursuant to shareholder approval and in accordance with the listed
company requirements of The Toronto Stock Exchange, the maximum number of
shares reserved for grant under the SOP was set at 2,628,000 in total,
representing approximately 10% of the issued and outstanding Common Shares of
the Corporation (on a non-diluted basis) at such time. In 2000, pursuant to
shareholder approval and in accordance with the listed company requirements of
The Toronto Stock Exchange, the maximum number of shares reserved for grant
under the SOP was set at 4,280,344 in total, representing approximately 12.5%
of the issued and outstanding Common Shares of the Corporation (on a non-
diluted basis) at such time.
23
As of February 7, 2001, Bracknell had the following stock options
outstanding:
Grantee Conventional Performance Total
------- ------------ ----------- ---------
Current Officers and Directors....... 987,250 750,000 1,737,250
Current Employees (945).............. 1,265,969 47,500 1,313,469
Former Officers, Directors and
Employees........................... 577,000 100,000 677,000
--------- ------- ---------
Total Outstanding.................... 2,830,219 897,500 3,727,719
Total Exercised...................... 552,625 -- 552,625
--------- ------- ---------
Total Granted........................ 3,382,844 897,500 4,280,344
========= ======= =========
Options Granted Subject to Shareholder Approval
Since February 29, 2000, the Board of Directors has approved the grant of
1,223,213 conventional options (in substitution for pre-existing options) and
1,445,804 Performance Options to management and employees of the Corporation,
subject to the approval of the shareholders of the Corporation of a
corresponding increase to the number of shares issuable under the Corporation's
SOP.
As of February 7, 2001, Bracknell had granted the following stock options
subject to shareholder approval:
Conventional Performance Total
------------ ----------- ---------
Sunbelt Officers and Employees (6)... -- 190,000 190,000
Able Officers and Employees, Inside
SOP (480)........................... 1,157,588 -- 1,157,588
Able Officers and Employees, Outside
SOP (5)............................. 60,000 -- 60,000
New Officers, Directors, Employees
(12)................................ 5,625 621,934 627,559
Current Officers and Employees
(945)............................... -- 633,870 633,870
--------- --------- ---------
1,223,213 1,445,804 2,669,017
========= ========= =========
In connection with the Corporation's acquisition of Sunbelt Integrated Trade
Services, Inc., the Corporation issued 285,000 Performance Options to key
management employees as a retention incentive, of which 190,000 options are
subject to shareholder approval being sought at this Meeting.
In connection with the acquisition of Able Telcom Holding Corp., the
Corporation agreed to replace, subject to shareholder approval, the
conventional stock options issued by Able with options to acquire an aggregate
of 1,217,588 Common Shares under the SOP (using the same 0.6 exchange ratio as
was used in the conversion of Able common shares to Bracknell Common Shares) on
the following economic terms:
a) the exercise price of the Bracknell stock options will be the same as
that of the corresponding Able stock options multiplied by 1.67; and
b) the unexpired term and vesting schedule of the Bracknell stock options
will be the same as those of the corresponding Able stock options.
Amendments to the SOP
On February 15, 2001, the Board passed a resolution approving an amendment
to the SOP increasing the number of shares reserved for options pursuant to
discretionary grants under the SOP to 9,500,000 shares, which would represent
approximately 14% of the issued and outstanding Common Shares of the
Corporation (on a non-diluted basis), including the Performance Option vesting
features as a part of the SOP and making certain other amendments. The increase
of 5,219,656 shares reserved for issuance under the SOP represents the
2,669,017 options already granted subject to the shareholder approval being
sought at this Meeting, and 2,550,639 options available for grant to new and/or
existing employees of the Corporation. The amount of the increase in the number
of shares reserved for options pursuant to discretionary grants under the SOP
was
24
determined in part on the basis of the need to: (a) remain competitive in
recruiting professional, technical and management employees in technology
intensive markets; (b) facilitate further growth through acquisitions;
(c) provide the Corporation flexibility in developing a competitive incentive
compensation program; and (d) avoid the application of accounting principles
requiring the recognition of compensation expense in the financial statements
for contingent stock-based compensation plans. The inclusion of the Performance
Option vesting features as part of the SOP reflects the Corporation's
commitment to continue an incentive compensation program aligned to support the
achievement of the Corporation's performance objectives.
A copy of the amended SOP is attached to this Proxy Statement as Appendix B.
In general terms, the significant changes to the SOP are as follows:
. The number of Common Shares available for grant will be increased to
9,500,000.
. Performance option vesting features will be included as part of the SOP.
. Re-pricing of options will be prohibited.
. Additional restrictions will be imposed on the number of shares which
can be issued to insiders of the Corporation.
. The SOP will be administered by a committee of the Board of Directors
which will be comprised exclusively of non-management directors.
. The issuance of "incentive stock options" within the meaning of section
422 of the U.S. Internal Revenue Code of 1986, as amended, will be
permitted and specific limitations will apply to incentive stock options
issued in accordance with the SOP.
. On an occurrence of a defined "change in control" transaction with
respect to the Corporation, the Board of Directors will have the right
to accelerate the date on which any option become exercisable and/or
expires.
. The provisions dealing with options on termination of employment will be
clarified.
U.S. Federal Income Tax Consequences
The following description, which is included pursuant to the rules of the
U.S. Securities and Exchange Commission, summarizes the material U.S. federal
income tax consequences of the grant and exercise of options under the SOP.
Stock Options. An option holder ("optionee") will not recognize taxable
income upon the grant of a nonqualified stock option to purchase Common Shares.
Upon exercise of the option, the optionee will generally recognize ordinary
income for federal income tax purposes equal to the excess of the fair market
value of the shares over the exercise price. The tax basis of the shares in the
hands of the optionee will equal the exercise price paid for the shares plus
the amount of ordinary compensation income the optionee recognizes upon
exercise of the option, and the holding period for the shares will commence on
the day the option is exercised. An optionee who sells any of the shares will
recognize capital gain or loss measured by the difference between the tax basis
of the shares and the amount realized on the sale. Capital gain or loss is
long-term if the shares are held for longer than one year. The Corporation will
be entitled to a U.S. federal income tax deduction equal to the amount of
ordinary compensation income recognized by the optionee. The deduction will be
allowed in the same tax year as the optionee recognizes the income.
An optionee will not recognize income upon the grant of an incentive stock
option to purchase Common Shares and will not generally recognize income upon
exercise of the option, provided the optionee is an employee of the Corporation
or a subsidiary at all times from the date of grant until three months prior to
exercise. However, the amount by which the fair market value of the shares on
the date of exercise exceeds the exercise price will be includable for purposes
of determining any alternative minimum taxable income of an optionee. If an
optionee who has exercised an incentive stock option sells the shares acquired
upon exercise more than two years after the grant date and more than one year
after exercise, long-term capital gain or loss will be recognized equal to the
difference between the sale price and the exercise price. An optionee who sells
25
the shares within two years after the grant date or within one year after
exercise will recognize ordinary compensation income in an amount equal to the
lesser of the difference between (a) the exercise price and the fair market
value of the shares on the date of exercise or (b) the exercise price and the
sale proceeds. Any remaining gain or loss will be treated as a capital gain or
loss. The Corporation will be entitled to a federal income tax deduction equal
to the amount of ordinary compensation income recognized by the optionee in
this case. The deduction will be allowable at the same time the optionee
recognizes the income.
Section 162(m). Compensation of persons who are named executive officers of
the Corporation is subject to the tax deduction limits of Section 162(m) of the
Internal Revenue Code. Compensation attributed to the exercise of stock options
that qualifies as "performance-based compensation" is exempt from section
162(m), thus allowing the Corporation the full tax deduction otherwise
permitted for such compensation. The Corporation intends to administer the SOP
so that compensation attributable to options granted under the plan will
qualify as performance-based compensation under Section 162(m).
Vote Required. The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock entitled to vote and represented in person
or by proxy is required for the approval of this proposal.
The Board of Directors recommends that you vote FOR the approval of the
amendment to the Stock Option Plan, and your proxy will be so voted if the
proposal is presented unless you specify otherwise. If the shareholders do not
approve the amendment to the SOP, the amendment will not go into effect and the
Board of Directors will consider whether to adopt some alternative arrangement
based on its assessment of the needs of the Corporation.
GENERAL
Management knows of no matters to come before the Meeting other than the
matters referred to in the notice of meeting. However, if any matters which are
not known to management should properly come before the Meeting, the
accompanying proxy will be voted on such matters in accordance with the best
judgment of the person or persons voting the proxy.
SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the Corporation's
2002 annual meeting of shareholders must be received at the Corporation's
registered office not later than January 26, 2002 for inclusion in the proxy
statement for that meeting.
AVAILABILITY OF DOCUMENTS
The Corporation will provide any person, upon request to its Secretary, with
a copy of:
(i) the most recent annual information form or Form 10-K of the
Corporation, together with a copy of any document or the pertinent
pages of any document incorporated therein by reference;
(ii) the comparative financial statements of the Corporation for the fiscal
year ended October 31, 2000, together with the report of the auditors
thereon;
(iii) management's discussion and analysis of financial condition and
results of operations for the fiscal year ended October 31, 2000;
(iv) the most recent annual report of the Corporation;
(v) a copy of any interim financial statements of the Corporation for the
periods subsequent to the end of its fiscal year; and
(vi) this Circular.
The Corporation may require the payment of a reasonable charge before
providing such documents to a person who is not a shareholder.
26
APPROVAL OF BOARD OF DIRECTORS
The contents and the sending of this Circular to the holders of Common
Shares, to each director of the Corporation, to the auditors of the Corporation
and to the appropriate governmental agencies has been approved by the Board.
DATED the 20th day of February, 2001.
/s/ Paul D. Melnuk
President & Chief Executive Officer
27
Appendix A
BRACKNELL CORPORATION
AUDIT COMMITTEE CHARTER
Adopted December 2000
The Audit Committee is appointed by the Board of Directors (the "Board") to
assist the Board in monitoring (1) the integrity of the financial statements of
the Corporation, (2) the compliance by the Corporation with legal and
regulatory requirements and with the Corporation's compliance policies/code of
conduct and ethics programs and (3) the independence and performance of the
Corporation's internal and external auditors.
The members of the Audit Committee shall meet the independence and
experience requirements of the principal securities exchanges on which the
Corporation's common shares are traded.
The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Committee. The Audit Committee
may request any officer or employee of the Corporation or the Corporation's
outside counsel or independent auditor to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
2. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles and
practices as well as the adequacy of internal controls that could
significantly affect the Corporation's financial statements.
3. Review an analysis prepared by management and the independent auditor
of significant financial reporting issues and judgments made in
connection with the preparation of the Corporation's financial
statements.
4. Review with management and the independent auditor the Corporation's
quarterly financial statements prior to making any required quarterly
filings in Canada or the United States.
5. Meet periodically with management to review the Corporation's major
financial risk exposures and the steps management has taken to monitor
and control such exposures.
6. Review major changes to the Corporation's auditing and accounting
principles and practices as suggested by the independent auditor,
internal auditors or management.
7. Recommend to the Board the appointment of the independent auditor,
which firm is ultimately accountable to the Audit Committee and the
Board.
8. Approve the fees to be paid to the independent auditor.
9. Receive periodic reports from the independent auditor regarding the
auditor's independence (including those reports consistent with
Independence Standards Board Standard 1), discuss such reports with the
auditor, and if so determined by the Audit Committee, take or recommend
that the full Board take appropriate action to oversee the independence
of the auditor.
10. Evaluate together with the Board the performance of the independent
auditor and, if so determined by the Audit Committee, recommend that
the Board replace the independent auditor.
11. Review the appointment and replacement of the senior internal auditing
executive.
A-1
12. Review the significant reports to management prepared by the internal
auditing department and management's responses.
13. Meet with the independent auditor prior to the audit to review
planning and staffing of the audit.
14. If applicable, obtain from the independent auditor assurance that
Section 10A (Audit Requirements) of the U.S. Securities Exchange Act
of 1934 has not been implicated. Section 10A requires that each audit
required under U.S. securities laws shall include:
a. procedures designed to provide reasonable assurance of detecting
illegal acts that would have a direct and material effect on the
determination of financial statements amounts;
b. procedures designed to identify related party transactions that are
material to the financial statements or otherwise require
disclosure therein; and
c. an evaluation of whether there is substantial doubt about the
ability of the Corporation to continue as a going concern during
the ensuing fiscal year.
Section 10A also governs the duties of an independent auditor upon
discovery of a material illegal act.
15. Obtain reports from management, the Corporation's senior internal
auditing executive and the independent auditor that the Corporation's
subsidiary/foreign affiliated entities are in conformity with
applicable legal requirements and the Corporation's compliance
policies/code of conduct.
16. Discuss with the independent auditor any matters related to the
conduct of the audit, including the matters required to be discussed
by Statement on Auditing Standards No. 61.
17. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any managerial letter provided by the
auditor and the Corporation's response to that letter. Such review
should include:
a. any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information;
b. any changes required in the planned scope of the internal audit;
and
c. the internal audit department responsibilities, budget and
staffing.
18. If applicable, prepare the report required by the rules of the U.S.
Securities and Exchange Commission to be included in the Corporation's
U.S. annual proxy statement.
19. Advise the Board with respect to the Corporation's policies and
procedures regarding compliance with applicable laws and regulations
and with the Corporation's compliance policies/code of conduct.
20. Review with the Corporation's General Counsel legal matters that may
have a material impact on the financial statements, the Corporation's
compliance policies/code of conduct and any material reports or
inquiries received from regulators or governmental agencies.
21. Meet at least annually with the chief financial officer, the senior
internal auditing executive and the independent auditor in separate
executive sessions.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Corporation's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. It is not the duty of the Audit Committee to conduct investigations to
resolve disagreements, if any, between management and the independent auditor
or to assure compliance with the laws and regulations and the Corporation's
compliance policies/code of conduct.
A-2
Appendix B
----------------
BRACKNELL
CORPORATION
----------------
PERFORMANCE STOCK OPTION PLAN
1. Purpose of the Plan
The purpose of the Plan is to provide certain directors, officers and key
employees of the Corporation and its subsidiaries with an opportunity to
purchase Common Shares. This will provide an increased incentive for these
directors, officers and key employees to contribute to the future success and
prosperity of the Corporation, thus enhancing the value of the Common Shares
for the benefit of all the shareholders and increasing the ability of the
Corporation and its subsidiaries to attract and retain individuals of
exceptional skill.
2. Defined Terms
Where used herein, the following terms shall have the following meanings,
respectively:
2.1 "Board" means the board of directors of the Corporation;
2.2 "Change of Control" means the occurrence of one or more of the
following with respect to the Corporation: (i) the acquisition by any
person (or related group of persons) of shares possessing sufficient
voting power in the aggregate to elect an absolute majority of the
members of the Board of Directors of the Corporation; (ii) a merger or
consolidation in which the Corporation is not the surviving entity,
except for a transaction in which securities representing more than
fifty percent (50%) of the total combined voting power of the
surviving entity are held by persons who held the shares immediately
prior to such merger or consolidation; or (iii) the sale, transfer or
other disposition of all or substantially all of the assets of the
Corporation.
2.3 "Code" means the U.S. Internal Revenue Code of 1986, as amended;
2.4 "Committee" means the compensation committee of the Board or such
other committee of the Board designated by the Board from time to
time, it being the intention of the Corporation that the Committee be
comprised exclusively of non-management directors for purposes of
Section 162(m) of the Code;
2.5 "Common Shares" means the common shares of the Corporation or, in the
event of an adjustment contemplated by Article 6 hereof, such other
Common Shares to which a Participant may be entitled upon the exercise
of an Option as a result of such adjustment;
2.6 "Corporation" means Bracknell Corporation, and includes any successor
corporation thereof;
2.7 "Disability" means an injury or disability occurring to a Participant
who by reason thereof is determined by the Board to be unable to
perform the services to the Corporation usually performed by the
Participant;
2.8 "Eligible Person" means an employee, director or officer of the
Corporation or subsidiary thereof;
2.9 "Exchange" means The Toronto Stock Exchange;
2.10 "Insider" has the meaning given to such term under The Toronto Stock
Exchange Company Manual, as amended, varied or re-enacted;
2.11 "Market Price" per Common Share on any date shall be the closing
price of the Common Shares on the Exchange (or, if the Common Shares
are not then listed and posted for trading on the Exchange, on such
stock exchange or automated quotation system in Canada or the United
States on which
B-1
such shares are then listed and posted for trading as may be selected
for such purpose by the Board) on the trading day immediately preceding
such date. In the event that such Common Shares did not trade on such
trading day, the Market Price shall be the average of the bid and ask
prices in respect of such Common Shares at the close of trading on such
date. In the event that the Common Shares are not listed and posted for
trading on any stock exchange or automated quotation system in Canada
or the United States, the Market Price shall be the fair market value
of such Common Shares as determined by the Board in its sole
discretion;
2.12 "Option" means an option to purchase Common Shares granted by the
Board to a Participant, subject to the provisions contained herein;
2.13 "Option Agreement" means the form of agreement between the
Corporation and Participant;
2.14 "Option Price" means the price per share at which Common Shares may
be purchased under the Option, as the same may be adjusted in
accordance with Article 6 hereof;
2.15 "Participants" means those directors, officers and key employees of
the Corporation and its subsidiaries to whom Options are granted
while such Options remain unexercised;
2.16 "Plan" means the Performance Stock Option Plan of the Corporation as
set forth herein, as the same may be amended or varied from time to
time;
2.17 "Retirement" means the retirement of a Participant as determined in
accordance with the applicable policies of the Corporation at the
relevant time, or if there is no such applicable policy, as
determined by the Corporation in its sole and absolute discretion;
2.18 "Share Compensation Arrangement" has the meaning given to such term
under The Toronto Stock Exchange Company Manual, as amended, varied
or re-enacted;
2.19 "subsidiary" means any corporation that is a subsidiary of the
Corporation, as such term is defined under subsection 1(2) of the
Business Corporations Act (Ontario), as such provision is from time
to time amended, varied or re-enacted; and
2.20 "Transfer" includes any sale, exchange, assignment, gift, bequest,
disposition, mortgage, charge, pledge, encumbrance, grant of security
interest or other agreement by which possession, legal title or
beneficial ownership passes from one person to another, or to the
same person in a different capacity, whether or not voluntary and
whether or not for value, and any agreement to effect any of the
foregoing.
3. Administration of the Plan
3.1 The Plan shall be administered by the Committee. The Corporation shall
effect the grant of Options under the Plan in accordance with
determinations made by the Committee. The Committee shall have full
authority, from time to time pursuant to the provisions of the Plan:
(a) after receiving the recommendations of management of the
Corporation, to designate the directors, officers and key
employees of the Corporation and its subsidiaries to whom Options
will be granted and the number of Common Shares which shall be the
subject of each Option provided that the Committee may grant a
non-management director no more than 50,000 Options on the
director becoming a member of the Board and no more than 25,000
Options annually thereafter;
(b) to determine the terms and conditions of all Options granted
pursuant to the Plan, including without limitation, the time or
times during which any Options shall be exercisable including the
achievement of specified performance criteria which must be met
for Options to become exercisable;
B-2
(c) to adopt, amend and rescind such rules and regulations as may be
advisable in the administration of the Plan;
(d) to construe and interpret the Plan, the rules and regulations and
the form of Option Agreement used under the Plan; and
(e) to make all other determinations deemed necessary or advisable for
the administration of the Plan.
3.2 Grants of Options hereunder shall be entirely discretionary and
nothing in the Plan shall be deemed to give any person any right to be
granted an Option.
3.3 Additional Provisions Applicable to Incentive Stock Options.
The Committee may, in its discretion, grant options under the Plan to
eligible employees which constitute "incentive stock options" within
the meaning of Section 422 of the Code; provided, however, that (a) the
aggregate Market Price of the Common Shares with respect to which
incentive stock options are exercisable for the first time by a
Participant during any calendar year shall not exceed the limitation
set forth in Section 422(d) of the Code; and (b) if a Participant owns,
on the date of grant, securities possessing more than 10% of the total
combined voting power of all classes of securities of the Corporation
or of any affiliate (as defined in the Code), the price per share shall
not be less than 110% of the Market Price per Common Share on the date
of grant and the term of such Option shall not exceed five years from
the date of grant.
4. Granting of Options
4.1 (a) The Committee from time to time may grant Options to certain
directors, officers and key employees of the Corporation and its
subsidiaries. The grant of Options will be subject to the
Participant entering into an Option Agreement in the form required
by the Corporation and will be subject to the conditions contained
herein. The Option may be subject to additional conditions
determined by the Committee from time to time including, without
limiting the generality of the foregoing, a condition requiring
that a Participant also be a participant in a specified stock
purchase plan of the Corporation.
(b) Except in respect of: (i) Options that may be granted in
connection with an acquisition or combination to certain
optionholders, directors, officers and key employees of companies
acquired by or otherwise combined with the Corporation; (ii)
Options granted prior to this February, 2001 amendment; and/or
(iii) Options that may be granted pursuant to conditions as
otherwise may be determined by the Committee, any Options granted
pursuant to the Plan shall become exercisable not earlier than the
seventh anniversary of the date of grant unless otherwise
accelerated upon the Corporation achieving share price or other
performance objectives as determined by the Committee.
4.2 Options may be granted in respect of authorized and unissued Common
Shares provided that the aggregate number of Common Shares reserved
for issuance under the Plan, subject to adjustment or increase of such
number pursuant to the provisions of Article 6 hereof, together with
any Common Shares reserved for issuance under any other Share
Compensation Arrangement, shall not exceed 9,500,000 Common Shares.
The aggregate number of Common Shares reserved for issuance to any one
person under the Plan, together with any Common Shares reserved for
issuance under any other Share Compensation Arrangement to such
person, must not exceed the lesser of 5% of the outstanding Common
Shares (on a non-diluted basis) and two million Common Shares. The
aggregate number of Common Shares reserved for issuance to Insiders
under the Plan, together with any Common Shares reserved for issuance
to Insiders under any other Share Compensation Arrangement, must not
exceed 10% of the outstanding Common Shares (on a non-diluted basis).
Insiders shall not, within a one-year period, be issued a number of
Common Shares under the Plan which, together with any Common Shares
reserved for issuance under any other Share Compensation Arrangement,
exceed 10% of the outstanding Common Shares (on a non-diluted
B-3
basis). The Common Shares in respect of which Options are not exercised
shall be available for subsequent grants of Options. No fractional
shares may be purchased or issued hereunder.
4.3 The Option Price shall be determined by the Committee at the time the
Option is granted but under no circumstances shall any Option Price be
lower than the Market Price per Common Share at the time the Option is
granted.
4.4 At the discretion of the Committee, the Option Price may increase,
throughout the period or for any part of the period that the Option or
a portion thereof remains unexercised, by an amount per annum fixed or
established by formula by the Committee at the time the Option is
granted.
4.5 An Option must be exercised within the period determined by the
Committee provided that in no circumstances may an Option be exercised
more than 10 years after the date of the granting of the Option.
4.6 Notwithstanding Section 8 hereof, but subject to Section 4.5, in the
event that a take-over bid is made by way of take-over bid circular to
the holders of all or substantially all of the outstanding Common
Shares, from and as at the date of mailing of that circular (the
"Mailing Date"), all Options that are then outstanding under the Plan,
whether or not theretofore exercisable, shall thereupon automatically
become exercisable for a period of 30 days following the Mailing Date,
or such other period as the Committee may, in its sole discretion,
from time to time on or after the date of announcement of that take-
over bid select as appropriate in the circumstances by notice given in
writing to the holders of such Options, at the end of which period all
Options which have not then been exercised shall revert back to and
remain as they were before that take-over bid was announced or made.
4.7 In the event of a Change of Control, the Committee has the right to
accelerate the date on which any Option becomes exercisable and/or
expires.
5. Exercise of Option
Subject to the provisions of the Plan and the terms of the granting of the
Option, an Option or a portion thereof may be exercised from time to time by
delivery to the Corporation at its registered office of a notice in writing
signed by the Participant or the Participant's legal personal representative
and addressed to the Corporation. This notice shall state the intention of the
Participant or the Participant's legal personal representative to exercise the
said Option or a portion thereof, the number of Common Shares in respect of
which the Option is then being exercised and must be accompanied by payment in
full of the Option Price for the Common Shares which are the subject of the
exercise. The Common Shares, which are the subject of the exercise, will then
be issued to the Participant.
6. Adjustments in Shares
Appropriate adjustments in the number of Common Shares subject to the Plan
and, as regards Options granted or to be granted, in the number of Common
Shares optioned and in the Option Price, shall be made by the Committee to
give effect to adjustments in the number of Common Shares resulting from
subdivisions, consolidations or reclassifications of the Common Shares, the
payment of stock dividends by the Corporation (other than dividends in the
ordinary course) or other relevant changes in the authorized or issued capital
of the Corporation, which changes occur subsequent to the approval of the Plan
by the Board.
7. Decisions of the Committee
All decisions and interpretations of the Committee respecting the Plan or
Options granted thereunder shall be conclusive and binding on the Corporation
and the Participants and their respective legal personal representatives and
on all directors, officers and employees eligible under the provisions of the
Plan to participate therein.
B-4
8. Termination of Employment
Except as otherwise determined by the Committee:
8.1 In the event that a Participant ceases to be an Eligible Person as a
result of death, Disability, Retirement or termination without cause,
each of the Options which are then exercisable by the Participant or
which become exercisable within three months after the date of death,
Disability, Retirement or termination without cause shall be
exercisable for a period of three months after the date of death,
Disability, Retirement or termination without cause;
8.2 In the event that a Participant ceases to be an Eligible Person for
any reason other than as set out in Section 8.1, each of the Options
held by the Participant shall cease to be exercisable and shall expire
immediately after the date on which the Participant ceases to be an
Eligible Person;
8.3 Notwithstanding anything else in the Plan, in no event shall any
Option be exercisable after its stated termination date;
8.4 In the event a Participant ceases to be an Eligible Person, the
Participant shall not be entitled to damages by reason of the
cessation of or alteration to the Participant's rights or expectations
under the Plan arising therefrom;
8.5 The Plan does not confer upon a Participant any right with respect to
continuation of employment by the Corporation or any subsidiary, nor
does it interfere in any way with the right of the Participant or the
Corporation or any subsidiary of the Corporation to terminate the
Participant's employment at any time;
8.6 Options shall not be affected by any change of employment of the
Participant where the Participant continues to be employed by the
Corporation or any of its subsidiaries;
8.7 In special circumstances, the Committee may give its express consent
to an extension of the time periods set forth above for any Option,
provided that any such extension shall not have the effect of
extending the term of the Option beyond its originally stated term.
9. Amendment or Discontinuance of Plan
The Board may amend or discontinue the Plan at any time without the consent
of the Participants provided such amendment shall not alter or impair in any
materially adverse manner any Option previously granted under the Plan except
as permitted by the provisions of Articles 6 or 10 hereof.
10. Amendment of Option Terms
The Committee may amend or modify the terms attaching to any outstanding
Option in any manner to the extent that the Committee would have had the
authority to initially grant the Option, including without limitation, to
change the date or dates as of which, an Option becomes exercisable, provided
that the Committee may not amend any outstanding Option to decrease the Option
Price except as may be required pursuant to Section 6.
11. Predecessor Plans
Options granted under any predecessor option plan will be governed by the
terms of the Option at the time of the grant unless amended pursuant to section
10 of the Plan.
12. Non-Transferability of Options
No Participant may Transfer any Option except that Transfers occurring upon
the death of a Participant by operation of law or by testamentary bequest are
permitted hereunder.
B-5
13. Government Regulation
The Corporation's obligation to issue and deliver Common Shares under any
Option is subject to:
the satisfaction of all requirements under applicable securities laws
in respect thereof and obtaining all regulatory approvals as the
Corporation shall determine to be necessary or advisable in connection
with the authorization, issuance or sale thereof;
the admission of such Common Shares to listing on any stock exchange or
automated quotation system on which such Common Shares may then be
listed; and
the receipt from the Participant of such representations, agreements
and undertakings as to future dealings in such Common Shares as the
Corporation determines to be necessary or advisable in order to
safeguard against the violation of the securities laws of any
jurisdiction.
In this connection, the Corporation shall take all reasonable steps to
obtain such approvals and registrations as may be necessary for the issuance of
such Common Shares in compliance with applicable securities laws and for the
listing of such Common Shares on any stock exchange or automated quotation
system on which such Common Shares are then listed.
14. Participants' Rights
A Participant shall not have the right as a shareholder of the Corporation
until the issuance of a certificate for Common Shares upon the exercise of an
Option or a portion thereof, and then only with respect to the Common Shares
represented by such certificate or certificates.
15. Effective Date
This Plan may be referred to as the Performance Stock Option Plan of the
Corporation and shall for all purposes be deemed effective on the basis set
forth above as at the opening of business (Toronto time) on February 15, 2001.
B-6
BRACKNELL CORPORATION
PROXY--Annual and Special Meeting of Shareholders--March 26, 2001
The undersigned, a shareholder of BRACKNELL CORPORATION (the "Corporation"),
does hereby appoint Paul D. Melnuk, or failing him, Gilbert S. Bennett or,
instead of either of them, , with full power of
substitution, the undersigned's proxies, to appear and vote all Common Shares
which the undersigned is entitled to vote at the annual and special meeting of
shareholders to be held at the TSE Conference Centre, TSE Auditorium, The
Exchange Tower, 130 King Street West, Toronto, Ontario on Monday, March 26,
2001 at 11:00 a.m. (Toronto time), or 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 meeting or such adjournment or
adjournments thereof; provided, however, that without limiting the general
authorization and power hereby given, the proxyholder named above is
specifically directed, on any ballot that may be called for, to vote or
withhold from voting the Common Shares registered in the name of the
undersigned as specified below:
1. Election of Directors [_] FOR all the nominees listed below
(except as marked to the contrary below).
[_] WITHHOLD FROM VOTING for the nominees
listed below.
Gilbert S. Bennett, Jean-Rene Halde, Michael D. Hanna, Wade C. Lau, Paul D.
Melnuk, James W. Moir, Jr., Thomas P. Muir, Gregory J. Orman and Allan R. Twa
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
- -------------------------------------------------------------------------------
2. Appointment of Arthur Andersen LLP as independent auditors for the 2001
fiscal year and authorization of directors to fix the compensation of the
auditors.
FOR [_] AGAINST [_] ABSTAIN [_]
3. Approval of amendments to the Bracknell Corporation Performance Stock
Option Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
The Board of Directors recommends a vote "FOR" each item.
The Common Shares represented by this proxy will be voted or withheld from
voting on any ballot that may be called for in accordance with the foregoing
directions. If a shareholder has not appointed as his, her or its proxy a
person other than the persons designated above and such shareholder does not
specify that the Common Shares are to be withheld from voting with respect to
the nominees listed in item (1), or that the Common Shares are to be voted
against any matters referred to in items (2) or (3), then such Common Shares
will be voted, on any ballot that may be called for, in respect of such
matters as set out in the accompanying management information circular/proxy
statement. This proxy is solicited by or on behalf of the management of the
Corporation.
If any amendments or variations to matters identified in the notice of the
meeting are proposed at the meeting or any postponement or postponements or
adjournment or adjournments thereof, or if any other matters which are not now
known to management should properly come before the meeting or any
postponement or postponements or adjournment or adjournments thereof, this
proxy confers discretionary authority to vote on such amendments or variations
or such other matters according to the best judgment of the person voting the
proxy at the meeting.
Notes:
1. A shareholder has the right to appoint as the shareholder's proxyholder a
person (who need not be a shareholder) to attend and act on the shareholder's
behalf at the meeting other than those persons designated above. A shareholder
may do so by inserting the name of such other person in the blank space
provided or by completing another proper form of proxy and, in either case, by
returning the completed proxy to the Corporation at its registered office or
to Computershare, c/o Montreal Trust Company of Canada, Proxy Department, 100
University Avenue, 11th Floor, Toronto, Ontario M5J 2Y1, not less than 48
hours (excluding Saturdays and holidays) preceding the meeting or any
postponement or postponements or adjournment or adjournments thereof.
2. This form of proxy must be dated and signed by the shareholder or the
shareholder's attorney authorized in writing or, if the shareholder is a
corporation, by an officer or attorney thereof duly authorized. If this form
of proxy is not dated in the space provided above, it is deemed to bear the
date on which it is mailed by the management of the Corporation.
3. If it is desired that the Common Shares represented by this proxy are to
be withheld from voting or voted against on any ballot that may be called for
with respect to any matter referred to in items (1), (2) or (3), the
appropriate box above providing for withholding from voting or voting against
should be marked with an X or a check-mark.
DATED this day of , 2001.
- -------------------------------------------------------------------------------
Name of Shareholder (Please Print)
- -------------------------------------------------------------------------------
Signature of Shareholder
CUSIP 10382K102
BRACKNELL CORPORATION
195 The West Mall
Suite 302
Toronto, Ontario
M9C 5K1
SUPPLEMENTAL MAILING LIST FORM
National Policy No. 41 adopted by the Canadian Securities Regulators allows
an exemption to Bracknell Corporation (the "Corporation") from sending
unaudited interim financial statements to Canadian shareholders. If you wish
to receive the Corporation's unaudited interim financial statements, you must
complete this form and forward it, either with your proxy or separately, to
our Transfer Agent:
Computershare
c/o Montreal Trust Company of Canada
100 University Avenue
11th Floor
Toronto, Ontario
M5J 2Y1
Please note that both registered and non-registered shareholders should
return the form; registered shareholders will not automatically receive
unaudited interim financial statements. (Registered shareholders are those
with shares registered in their name; non-registered shareholders have their
shares registered in an agent, broker, or bank's name.)
----------------
Please put my name on your Supplemental Mailing List to receive the
unaudited interim financial statements of the Corporation.
[Please PRINT your name and address]
_____________________________________
(First Name and Surname)
_____________________________________
(Number and Street) (Apartment/Suite)
_____________________________________
(City) (Province)
_____________________________________
(Postal Code)
Signed:
________________________________
(Signature of Shareholder)