Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [XX]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the
[X] Definitive Proxy Statement Commission only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
CANWEST PETROLEUM CORPORATION
(Name of Registrant as Specified In Its Charter)
Thornton J. Donaldson, President
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate Box:)
[XX] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11:(1)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
August 16, 2005
To Our Shareholders:
You are cordially invited to the Annual Meeting of Shareholders (the
"Meeting") of CanWest Petroleum Corporation (the "Company") to be held at the
Company's principal office, 206-475 Howe Street, Vancouver, B.C., Canada,
V6C-2B3 on Monday, September 19, 2005 at 10:00 a.m. local time.
The formal Notice of the Meeting and Proxy Statement describing the
matters to be acted upon at the Meeting are contained in the following pages.
Shareholders also are entitled to vote on any other matters which properly come
before the Meeting.
Enclosed is a proxy which will enable you to vote your shares on the
matters to be considered at the Meeting even if you are unable to attend the
Meeting. Please mark the proxy to indicate your vote, date and sign the proxy
and return it in the enclosed envelope as soon as possible for receipt prior to
the Meeting.
WHETHER YOU OWN FEW OR MANY SHARES OF STOCK, PLEASE BE SURE YOU ARE
REPRESENTED AT THE MEETING EITHER BY ATTENDING IN PERSON OR BY RETURNING YOUR
PROXY AS SOON AS POSSIBLE.
Sincerely,
Thornton J. Donaldson, President
CANWEST PETROLEUM CORPORATION
206-475 Howe Street
Vancouver, B.C., Canada V6C-2B3
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 19, 2004
August 16, 2005
To the Shareholders of CanWest Petroleum Corporation:
The Annual Meeting of Shareholders (the "Meeting") of CanWest Petroleum
Corporation, a Colorado corporation (the "Company") will be held at the
Company's principal office, 206-475 Howe Street, Vancouver, B.C., Canada V6C-2B3
on Monday, September 19, 2005 at 10:00 a.m. local time, for the purpose of
considering and voting upon proposals to:
1. Elect two directors to serve until the next annual meeting of
shareholders or until their successors are elected and qualified.
2. Adopt an amendment to the Company's Articles of Incorporation
increasing the number of authorized shares of Common Stock from
100,000,000 shares to 250,000,000 shares.
3. Transact such other business as may lawfully come before the Meeting
or any adjournment(s) thereof.
The Board of Directors is not aware of any other business to come before
the Meeting. Pursuant to the Company's Bylaws, the Board of Directors has fixed
the close of business on Wednesday, August 3, 2005 as the record date for
determination of the shareholders entitled to vote at the Meeting and any
adjournments thereof.
You are requested to complete and sign the enclosed proxy which is
solicited by the Board of Directors and to return it promptly in the enclosed
envelope. The proxy will not be used if you attend the Meeting and vote in
person.
EACH SHAREHOLDER, WHETHER OR NOT HE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD.
ANY PROXY GIVEN BY THE SHAREHOLDER MAY BE REVOKED BY FILING WITH THE SECRETARY
OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER
DATE. ANY SHAREHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR HER PROXY AND
VOTE IN PERSON ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU ARE A
SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED
ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE IN PERSON AT THE
MEETING.
BY ORDER OF THE BOARD OF DIRECTORS,
Thornton J. Donaldson, President
CanWest Petroleum Corporation
206-475 Howe Street
Vancouver, B.C., Canada V6C-2B3
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 19, 2005
August 16, 2005
To Our Shareholders:
This proxy statement (the "Proxy Statement") is furnished in connection with the
solicitation by the Board of Directors of CanWest Petroleum Corporation (the
"Company") of proxies to be used at the Annual Meeting of Shareholders (the
"Meeting") to be held at the Company's principal office, 206-475 Howe Street,
Vancouver, B.C., Canada V6C-2B3 on Monday, September 19, 2005 at 10:00 a.m.
local time, and at any adjournments or postponements thereof. The Meeting is
being held for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders. This Proxy Statement, the accompanying proxy card and
the Notice of Annual Meeting of Shareholders (collectively, the "Proxy
Materials") are first being mailed to shareholders beginning on or about August
16, 2005.
GENERAL INFORMATION
Solicitation
The enclosed proxy is being solicited by the Company's Board of Directors.
The costs of the solicitation will be borne by the Company. Proxies may be
solicited personally or by mail, telephone, facsimile or telegraph by directors
and officers of the Company, none of whom will receive any additional
compensation for such solicitations. The Company will reimburse banks, brokers,
nominees, custodians and fiduciaries for their reasonable out-of-pocket expenses
incurred in sending the proxy materials to beneficial owners of the shares.
Voting Rights and Votes Required
Holders of shares of CanWest Petroleum Corporation common stock (the
"Common Stock"), at the close of business on Wednesday, August 3, 2005 (the
"Record Date") are entitled to notice of, and to vote at, the Meeting. On the
Record Date, 61,842,534 shares of Common Stock were outstanding. Holders of
Common Stock are entitled to one vote per share.
The presence, in person or by proxy, of holders of one-third of the shares
outstanding as of the Record Date constitutes a quorum for the transaction of
business at the Meeting. In the event there are not sufficient votes for a
quorum or to approve any proposals at the time of the Meeting, the Meeting may
be adjourned in order to permit further solicitation of proxies. Abstentions
will count towards quorum requirements.
As to the election of directors under Proposal One, the proxy card being
provided by the Board enables a shareholder to vote for the election of each of
the nominees proposed by the Board, or to withhold authority to vote for one or
more of the nominees being proposed. Directors are elected by a plurality of
votes cast, without respect to either (i) broker non-votes, or (ii) proxies as
to which authority to vote for one or more of the nominees being proposed is
withheld.
The affirmative vote of a majority of the shares represented at the
Meeting in person or by proxy and entitled to vote on the matter is required to
approve Proposal Two. As to this proposal, a shareholder may: (i) vote "FOR" the
proposal, (ii) vote "AGAINST" the proposal, or (iii) "ABSTAIN" with respect to
the proposal. This proposal shall be determined without regard to broker
non-votes or proxies marked "ABSTAIN" as to each matter.
The proposed corporate actions on which the shareholders are being asked
to vote are not corporate actions for which shareholders of a Colorado
corporation have the right to dissent under the Colorado Business Corporation
Act.
Voting and Revocability of Proxies
Shares of Common Stock represented by all properly executed proxies
received at the Company's transfer agent by Thursday, September 15, 2005 will be
voted as specified in the proxy. Unless contrary instructions are indicated on
the proxy, the shares of Common Stock represented by such proxy will be voted
"FOR" the slate of directors described herein; and "FOR" adoption of the
amendment to the Articles Incorporation of the Company as described herein.
Management and the Board of Directors of the Company know of no other matters to
be brought before the Meeting other than as described herein. If any other
matters properly are presented to the shareholders for action at the Meeting and
any adjournments or postponements thereof, the proxy holder named in the
enclosed proxy intends to vote in his discretion on all matters on which the
shares of Common Stock represented by such proxy are entitled to vote.
The giving of the enclosed proxy does not preclude the right to vote in
person should the shareholder giving the proxy so desire. A proxy may be revoked
at any time prior to its exercise by (i) providing notice in writing to the
Company's corporate secretary that the proxy is revoked; (ii) presenting to the
Company a later-dated proxy; or (iii) by attending the Meeting and voting in
person.
3
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of July 29, 2005, the number of shares
of the Company's outstanding $0.001 par value common stock beneficially owned by
each of the Company's current directors and the Company's executive officers and
the number of shares beneficially owned by all of the Company's current
directors and named executive officers as a group:
Amount and Percent
Nature of of
Name and Address of Beneficial Common
Beneficial Owner Position Ownership Stock
---------------- -------- --------- -----
Thornton J. Donaldson President 2,512,000(1) 4.0%
206 - 475 Howe Street and
Vancouver, B.C. V6C 2B3 Director
Canada
William G. Timmins Secretary 585,000(2) 0.9%
410 - 455 Granville and
Street Director
Vancouver, B.C. V6C 1T1
Canada
All current directors 2,575,000(3) 4.9%
and executive officers
as a group (two persons)
(1) Mr. Donaldson resigned as President from the Company on May 16, 2002 and was
reappointed President on September 15, 2003. Includes: (i) 22,000 shares owned
by Mr. Donaldson's spouse; (ii) options to acquire 100,000 common shares at
$0.36 until November 1, 2006; (iii) 780,000 shares underlying warrants; and (iv)
955,000 shares owned by United Corporate Advisors, Ltd., of which Mr. Donaldson
is the President, a Director and shareholder.
(2) Includes options to acquire 100,000 common shares at $0.36 until November 1,
2006 and 150,000 shares owned by Mr. Timmins' spouse.
(3) Includes securities reflected in footnotes 1 - 2.
b) Security Ownership of Certain Beneficial Owners
The following table sets forth as of July 29, 2005, the number of shares
of the Company's Common Stock beneficially owned by each person who owned of
record, or was known to own beneficially, more than 5% of the Company's
outstanding shares of Common Stock:
4
Name and Address of Amount and Nature Percentage
Beneficial Owner of Beneficial of Common
Ownership Stock
------------------------- ----------------- ----------
October Sun(1)
241 Ridge Street, Fourth 7,150,000(2) 11.3%
Floor, Reno, Nevada 89501
- ----------
(1) Voting and investment power for this entity is controlled by Morris
E. Schorn, 1247-235 Keith Road, West Vancouver, B.C., Canada,
V7P-1L5.
(2) Includes warrants to purchase 1,600,000 shares of common stock.
MANAGEMENT
Executive officers of the Company are elected by the Board of Directors,
and serve for a term of one year and until their successors have been elected
and qualified or until their earlier resignation or removal by the Board of
Directors. There are no family relationships among any of the directors and
executive officers of the Company.
The following table sets forth the names and ages of all executive
officers and directors whose terms will not expire prior to the annual meeting,
and all persons nominated to serve as directors and the positions and offices
that each person hold with the Company:
5
Name of Director or Officer or
Officer and Position Director Office(s) Held and Other
in the Company Since Age Business Experience
- -------------------- ---------- --- ------------------------
Thornton J. Donaldson 1998-2002, 75 President of the Company from April,
President, Chief 2003 1998 to May 16, 2002 and from
Financial Officer and September 15, 2003 until present.
Director President of Rich Coast, Inc., an
industrial waste treatment company
located in Dearborn, Michigan from
1984 to 1993, and a Director of Rich
Coast, Inc. from 1993 to 1999.
Director of Lorex Resources, Ltd., a
mineral exploration company located
in Vancouver, B.C. since July 1999.
President and sole director of
United Corporate Advisers Ltd., a
geological and financial consulting
business founded by Mr. Donaldson in
1970. Self-employed as a consulting
geologist and financial advisor from
1978 through the present.
William G. Timmins 1998 67 Secretary of the Company since July
Secretary and Director 1998. Self-employed as President of
WGT Consultants, Ltd. from 1983 to
present as a geological consultant
for numerous mining companies in
Canada, the United States, Central
and South America, Australia and New
Zealand. Director of Monalta
Resources Ltd., a mineral
exploration company located in West
Vancouver, B.C. from April 1998 to
present.
6
Christopher Hopkins 2004 51 Mr. Hopkins has been the President
and Chief Executive Officer of
Oilands Quest Ltd., a subsidiary of
the Company since November 10, 2004.
Prior thereto, Mr. Hopkins was the
Executive Vice President of Synenco
Energy Inc. ("Synenco"), an oil
sands exploration company, from
October 1999 to September 2004 and
was a director of Synenco from
October 1999 until August 2003.
Prior thereto, Mr. Hopkins was a
founder, director and Vice
President, Finance of Thunder Road
Resources Ltd., a private oil and
gas production company, from June
1996 to June 2000. Mr. Hopkins is a
management professional and
businessman with 25 years of
Canadian and international energy
and mining experience. He has held
executive positions in corporate
planning and business development
with Suncor Inc.'s Oil Sands Group,
Pembina Corporation and Amoco Canada
and has additional management
experience in environmental control
and regulatory affairs in the mining
industry. Mr. Hopkins holds a B.Sc.
(Chemistry and Biology) from
Carleton University and a MBA from
Queen's University.
7
Karim Hirji 2004 42 Mr. Hirji has been the Chief
Financial Officer of Oilsands Quest
Inc., a subsidiary of the Company,
since November 10, 2004. Prior
thereto, Mr. Hirji was the Vice
President, Finance and Chief
Financial Officer of Synenco from
November 2001 to June 2004. Prior
thereto, Mr. Hirji was the Vice
President, Finance and Chief
Financial Officer of Anadime
Corporation, a public oilfield
services company, from September
2000 to October 2001. Prior to
April 2000, Mr. Hirji was the
Manager of Financial Reporting at
Enbridge Inc. Mr. Hirji was
employed at AGRA Inc. (a public
engineering company) from 1994 to
January 2000 and held the position
of Corporate Controller since 1999
and Assistant Corporate Controller
prior to that. Mr. Hirji brings to
the Corporation over fifteen years
of experience in financial
management, including significant
treasury, project management and
corporate finance skills. As
Vice-President and Chief Financial
Officer of Anadime Corporation, Mr.
Hirji led and coordinated all
financial matters including
shareholder communications in the
sale of Anadime Corporation to
Newalta Corporation. Mr. Hirji
received his B.Comm from the
University of Calgary and CA while
articling with Deloitte & Touche LLP.
Except as indicated in the above table, no director of the Company is a director
of an entity that has its securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
8
Meetings of the Board and Committees
The Company's Board of Directors held twenty-four meetings during the
Company's year ended April 30, 2005, and six additional meetings through the
date of this Proxy Statement. Such meetings consisted of consent Directors'
minutes signed by all Directors and actual meetings at which all of the
Directors were present in person or by telephone. The Company does not have a
formal policy with regard to board members' attendance at annual meetings, but
encourages them to attend shareholder meetings. All Board members attended each
meeting of the Directors during the past fiscal year.
There is no arrangement or understanding between any Director and any
other person pursuant to which any person was selected as a Director.
Directors of the Company are not paid for their services as such. The
directors are reimbursed for all expenses incurred by them in attending board
meetings.
Committees
Audit Committee: The Company does not have a separately-designated
standing audit committee established in accordance with Section 3(a)(58)(A) of
the Exchange Act. The members of our Board of Directors serve as our audit
committee. The Board has not yet adopted an audit committee charter.
Nominating Committee: The entire Board of Directors fulfills the duties of
our Nominating Committee ("Nominating Committee"), which include overseeing the
process by which individuals may be nominated to our board of directors. Neither
of the board members is considered independent as defined in Rule 4200(a)(15) of
the Nasdaq listing standards. While the Company hopes to establish a separate
nominating committee consisting of independent directors once the number of
directors is expanded, the current size of the Company's Board of Directors does
not facilitate the establishment of a separate committee. Our Nominating
Committee's charter was adopted by the board of directors as of April 30, 2004.
The charter was included as an appendix to the Company's proxy statement mailed
to shareholders for its meeting held in November 2004.
The functions performed by the Nominating Committee include identifying
potential directors and making recommendations as to the size, functions and
composition of the Board and its committees. In making nominations, our
Nominating Committee is required to submit candidates who have the highest
personal and professional integrity, who have demonstrated exceptional ability
and judgment and who shall be most effective, in conjunction with the other
nominees to the board, in collectively serving the long-term interests of the
shareholders.
The Nominating Committee considers nominees proposed by our shareholders.
To recommend a prospective nominee for the Nominating Committee's consideration,
you may submit the candidate's name by delivering notice in writing to CanWest
Petroleum Corporation, c/o Burns, Figa and Will, P.C., 6400 S. Fiddlers Green
Circle, Suite 1030, Englewood, CO 80111, USA.
9
A shareholder nomination submitted to the Nominating Committee must
include at least the following information (and can include such other
information the person submitting the recommendation desires to include), and
must be submitted to the Company by the date mentioned in this proxy statement
under the heading "Proposal From Shareholders" as such date may be amended in
cases where the annual meeting has been changed as contemplated in SEC Rule
14a-8(e), Question 5:
(i). The name, address, telephone number, fax number and e-mail address of
the person submitting the recommendation;
(ii). The number of shares and description of the Company voting securities
held by the person submitting the nomination and whether such person is
holding the shares through a brokerage account (and if so, the name of
the broker-dealer) or directly;
(iii). The name, address, telephone number, fax number and e-mail address of
the person being recommended to the nominating committee to stand for
election at the next annual meeting (the "proposed nominee") together
with information regarding such person's education (including degrees
obtained and dates), business experience during the past ten years,
professional affiliations during the past ten years, and other relevant
information.
(iv). Information regarding any family relationships of the proposed nominee
as required by Item 401(d) of SEC Regulation S-K. (v)
(v). Information whether the proposed nominee or the person submitting the
recommendation has (within the ten years prior to the recommendation)
been involved in legal proceedings of the type described in Item 401(f)
of SEC Regulation S-K (and if so, provide the information regarding
those legal proceedings required by Item 401(f) of Regulation S-K).
(vi). Information regarding the share ownership of the proposed nominee
required by Item 403 of Regulation S-K.
(vii). Information regarding certain relationships and related party
transactions of the proposed nominee as required by Item 404 of
Regulation S-K.
(viii). The signed consent of the proposed nominee in which he or she
a. consents to being nominated as a director of the Company if selected
by the nominating committee,
b. states his or her willingness to serve as a director if elected for
compensation not greater than that described in the most recent
proxy statement;
c. states whether the proposed nominee is "independent" as defined by
Nasdaq Marketplace Rule 4200(a)(15); and
d. d. attests to the accuracy of the information submitted pursuant to
paragraphs (i), (ii), (iii), (iv), (v), (vi), and (vii), above.
Although the information may be submitted by fax, e-mail, mail, or
courier, the nominating committee must receive the proposed nominee's signed
consent, in original form, within ten days of making the nomination.
10
When the information required above has been received, the nominating
committee will evaluate the proposed nominee based on the criteria described
below, with the principal criteria being the needs of the Company and the
qualifications of such proposed nominee to fulfill those needs.
The process for evaluating a director nominee is the same whether a
nominee is recommended by a shareholder or by an existing officer or director.
The Nominating Committee will:
1. Establish criteria for selection of potential directors, taking into
consideration the following attributes which are desirable for a member of
our Board of Directors: leadership; independence; interpersonal skills;
financial acumen; business experiences; industry knowledge; and diversity
of viewpoints. The Nominating Committee will periodically assess the
criteria to ensure it is consistent with best practices and the goals of
the Company.
2. Identify individuals who satisfy the criteria for selection to the
Board and, after consultation with the Chairman of the Board, make
recommendations to the Board on new candidates for Board membership.
3. Receive and evaluate nominations for Board membership which are
recommended by existing directors, corporate officers, or shareholders in
accordance with policies set by the Nominating Committee and applicable
laws.
The Nominating Committee has held no formal meetings and taken one action
by unanimous written consent through the Record Date. On August 11, 2004 by
unanimous consent the Nominating Committee nominated both directors currently
serving on our board of directors to stand for reelection.
Compensation Committee:
The Company does not have a separate standing Compensation Committee.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Officers and Directors and persons who own more than 10% of the
Company's outstanding Common Stock to file reports of ownership with the
Securities and Exchange Commission ("SEC"). Directors, officers, and greater
than 10% shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on a review of Forms 3, 4, and 5 and amendments thereto
furnished to the Company during and for the Company's year ended April 30, 2005,
and as of August 15, 2005 there were no Directors, officers or more than 10%
shareholders of the Company who failed to timely file a Form 3, 4 or 5, other
than Thornton J. Donaldson (as to 2 Forms 4) and William Timmins (as to one Form
4).
11
EXECUTIVE COMPENSATION
Compensation and other Benefits of Executive Officers
The following table sets out the compensation received for the fiscal
years April 30, 2005, 2004 and 2003 in respect to each of the individuals who
were the Company's chief executive officer at any time during the last fiscal
year and the Company's four most highly compensated executive officers whose
total salary and bonus exceeded $100,000 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
FISCAL YEAR COMPENSATION LONG TERM COMPENSATION
--------------------------------------------- -----------------------------------------------------------
Awards Payouts
Restricted
Shares
Securities or
Name and Other Underlying Restricted LTIP All other
Principal Salary Bonus Annual Option/SARs Share Payouts Compensation
Position Year ($) ($) Compensation Granted Units ($) ($)
--------- ------ ----- ------ ----------- ----- ------- ------------
Douglas Cannaday, 2005 $ 0 $ 0 0 0 0 0 0
Former President(2) 2004 $24,857 $ 30,000 0 600,000(4) 0 0 0
2003 $56,000 $ 30,000 0 400,000(3) 0 0 0
Thornton 2005 $ 1,50 $110,750 0 425,000(5) 0 0 0
Donaldson, 2004 0 $ 22,100 0 130,000(5) 0 0 0
President(1) 2003 0 0 0 200,000 0 0 0
0
(1) Mr. Donaldson served as President from April, 1998 to May 16, 2002
and from September 15, 2003 to present.
(2) Mr. Cannaday has served as President from May 16, 2002 to September
15, 2003
(3) These options were cancelled by the Company May 28, 2003
(4) During 2004 Mr. Cannaday received 300,000 common shares to settle
the $30,000 bonus declared in 2003 plus management fees of $54,857
made up of 24,857 in cash and a $30,000 bonus paid by way 300,000
common shares
(5) Mr. Donaldson received a bonus of $110,750 (2004 - $22,100) which
was paid by the issuance of 425,000 (2004 - 130,000) common shares
12
Agreements with Management
Oilsands Quest Inc. ("OQI"), a subsidiary of the Company, reached
agreement with Mr. Christopher Hopkins, its President, and Mr. Karim Hirji,
Chief Financial Officer, whereby, subject to certain conditions, they each have
agreed to provide their services to OQI. in return for $66,741 ($84,000 CND) per
year until certain business targets are met and thereafter at $139,043 ($175,000
CND) per year which subsequent to April 30, 2005 have been met. These agreements
also contain termination clauses whereby OQI has agreed to pay them, subject to
certain conditions, an amount of up to one and one-half times their annual pay
should they be terminated for reasons other than cause.
There are no other arrangements or understandings between any executive
officer and any director or other person pursuant to which any person was
selected as a director or an executive officer.
Option/Stock Appreciation Rights ("SAR") Grants during the most recently
completed Fiscal Year.
The following table sets out the stock options and stock warrants granted
as bonuses, which were granted by the Company during 2005 to the Named Executive
Officers of the Company.
OPTION/SAR GRANTS IN PREVIOUS YEAR
INDIVIDUAL GRANTS
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base Market Price on
Name Granted (#) Fiscal Year Price ($/Sh) Date of Grant Expiration Date
- ---- ----------- ------------ --------------- --------------- ---------------
Thornton Donaldson (1) 50,000(2) 1.8% $0.27 $0.27 n/a
- ------------
(1) Mr. Donaldson served as President from April, 1998 to May 16, 2002
and from September 15, 2003 to present.
(2) During 2005 Mr. Donaldson received a bonus of $112,250 of which
$110,750 was paid by the issuance of 425,000 common shares. Of these
375,000 common shares related to options which were granted during
2004 or earlier and 50,000 common shares related to a bonus of
$13,500 used to acquire 50,000 options granted during 2005.
Subsequent to April 30, 2005 on May 18, 2005 Donaldson was issued
100,000 options at $0.36 per share until November 1, 2006.
13
Aggregated Option/SAR Exercised in Last Financial Year and Fiscal Year-End
Option/SAR Values.
The following table sets out all option/SARs and warrants granted as
bonuses which were exercised by the Named Executive Officers during the most
recently completed fiscal year and the values of options/SARs and warrants for
such persons as of the end of the most recently completed fiscal year.
AGGREGATED OPTION/SAR EXERCISED IN LAST FINANCIAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES.
Value of
Number of Securities Unexercised Options/SARs
Underlying Unexercised at
Options/SARs at FY-End (#) FY-End ($)
Shares Acquired on Exercisable/ Exercisable/
Name Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ---------------------- ------------------ ------------------ -------------------------- ------------------------
Doug Cannaday (2) 600,000(3) 9.9% $0.10 $0.10 n/a
Thornton Donaldson (1) 130,000(4) 2.1% $0.17 $0.17 n/a
- ------------
(1) Mr. Donaldson served as President from April, 1998 to May 16, 2002
and from September 15, 2003 to present.
(2) Mr. Cannaday served as President from May 16, 2002 to September 15,
2003
(3) During 2004 Mr. Cannaday received 300,000 common shares to settle
the $30,000 bonus declared in 2003 plus management fees of $54,857
made up of 24,857 in cash and a $30,000 bonus paid by way 300,000
common shares
(4) Mr. Donaldson received a bonus of $22,100 which was paid by the
issuance of 130,000 common shares
Compensation of Directors.
The Directors of the Company are not compensated for their services. In
addition, no pension or retirement benefit plan has been instituted by the
Company and none is proposed at this time and there is no arrangement for
compensation with respect to termination of the directors in the event of change
of control of the Company.
Benefit Plans.
The Company currently has no retirement, pension, profit-sharing,
insurance or medical reimbursement plans or long term incentive plans covering
its officers and directors.
14
Repricing of Options.
None
Transactions with Management and Others and Certain Business Relationships
October Sun, a Nevada Corporation ("October Sun"), a greater than 5%
beneficial owner of the Company's shares, and the Company were parties an Option
Agreement, dated as of September 10, 2001 (the "Option Agreement"), whereby
October Sun granted the Company the right to purchase all of the outstanding
shares of its wholly-owned subsidiary - API Canada. Pursuant to the October Sun
Option Agreement the Company: (i) made a payment of $75,000 to October Sun; (ii)
issued to two third parties each a warrant to acquire up to 500,000 common
shares at a purchase price of $0.01 per share until July 25, 2003; (iii) issued
to two third parties each options to purchase up to 250,000 common shares at an
exercise price of $0.27 per share until August 21, 2006; and (iv) agreed to pay
costs up to a maximum of $60,000 ($100,000 Cdn.) for the completion or
abandonment of the 7-32 Well if the October Sun Option Agreement was not
exercised. On April 30, 2002, the Company and October Sun closed the transaction
contemplated by the Option Agreement pursuant to the terms and provisions of
that certain Agreement and Plan of Reorganization, dated April 30, 2002 (the
"Merger Agreement"). Pursuant to the terms of the Merger Agreement, Anhydride
Petroleum (USA) ("Anhydride USA"), a wholly owned subsidiary of October Sun,
which in turn owned all of the outstanding capital stock of API Canada, was
merged with and into a wholly owned subsidiary of the Company, CWPC Merger,
Inc., a Colorado corporation, with the entity surviving the merger being a
wholly owned subsidiary of the Company named Anhydride Petroleum (USA), and
owning all of the outstanding capital stock of API Canada. As a result of the
transaction, the Company (i) issued to October Sun an demand promissory note in
the principal amount of U.S. $100,000, bearing interest at a rate of prime plus
2%; (ii) 3,950,000 shares of the Company's Common Stock, $0.001 par value; and
(iii) a warrant to purchase up to 500,000 shares of the Company's Common Stock,
$0.001 par value, at a purchase price of $0.01 per share, which warrant expires
April 30, 2003, which warrant was subsequently cancelled and replaced with a
warrant issued to Anhydride Oil Corporation whereby it may purchase 600,000 up
to 600,000 shares of the Company's Common Stock, $0.001 par value, at a purchase
price of $0.01 per share, which warrant expires August 30, 2004. As a result of
the merger, the Company through its wholly owned subsidiary, Anhydride USA,
which owns all of the issued and outstanding shares of API Canada, became the
owner of certain parcels, mining rights, and licenses, subject to certain
working interests, collectively known as the Anhydride Rights.
In addition to the consideration received by October Sun in connection
with the Merger Agreement, October Sun was paid by the Company a management fee
in the amount of $72,000 (2004 -$72,000.)
Convertible Notes - On September 24, 2002 the Company issued a convertible
note to October Sun, a Nevada Corporation in the principal amount of $400,000
and on the same date the Company issued a convertible note to United Corporate
Advisors in the principal amount of $195,000. The notes were converted on
September 13, 2004 into Units at $0.25 per share. Each unit consists of one
common share and a warrant to purchase one common share at $0.33 per share until
October 13, 2005.
15
Other than the transactions stated above, none of the directors or
executive officers of the Company, nor any person who owned of record or was
known to own beneficially more than 5% of the Company's outstanding shares of
its Common Stock, nor any associate or affiliate of such persons or companies,
has any material interest, direct or indirect, in any transaction that has
occurred since its inception on April 3, 1998, or in any proposed transaction,
which has materially affected or will affect the Company.
INDEPENDENT PUBLIC ACCOUNTANTS
We have selected Pannell Kerr Forster ("PKF") to continue to serve as our
independent registered public accounting firm. Representatives of PKF are not
expected to be present at the annual meeting.
Audit Fees.
Our principal accountant, PKF, billed us aggregate fees in the amount of
approximately $18,000 for the fiscal year ended April 30, 2005 and approximately
$14,000 for the fiscal year ended April 30, 2004. These amounts were billed for
professional services that PKF provided for the audit of our annual financial
statements and the review of the financial statements included in our report on
10-KSB.
Audit-Related Fees.
PKF billed us aggregate fees in the amount of $36,000 for the fiscal year
ended April 30, 2005 and $28,000 for the fiscal year ended April 30, 2004 for
assurance and related services that were reasonably related to the performance
of the audit or review of our financial statements.
Tax Fees.
No fees were billed to us by PKF for tax compliance or tax advice
All Other Fees
No fees were billed to us by PKF for any other fees.
Our principal accountant (through its full time employees) performed all
work regarding the audit of our financial statements for the most recent fiscal
year.
No pre-approval was required under "Tax Fees" and "All Other Fees" as no
services were performed by PKF and no fees incurred.
16
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors is nominating the two current Directors for
reelection. The number of Directors on the Company's Board of Directors has been
established under the Bylaws of the Company as two directors. Each Director
serves for a one year term or until his successor is elected and qualified.
Nominees for Election of Directors
The persons named in the enclosed form of Proxy will vote the shares
represented by such Proxy for the election of the two nominees for Director
named below. If, at the time of the Meeting, any of these nominees shall become
unavailable for any reason, which event is not expected to occur, the persons
entitled to vote the Proxy will vote for such substitute nominee or nominees, if
any, as they determine in their sole discretion. If elected, Thornton J.
Donaldson and William G. Timmins will each hold office a term of one year, until
their successors are duly elected or appointed or until their earlier death,
resignation or removal.
The Board of Directors recommends a vote "FOR" the election of Messrs.
Donaldson and Timmins. Unless otherwise specified, the enclosed proxy will be
voted "FOR" the election of the Board of Directors' slate of nominees. Neither
Management nor the Board of Directors of the Company is aware of any reason
which would cause any nominee to be unavailable to serve as a Director.
Discretionary authority may be exercised by the proxy holders named in the
enclosed proxy to vote for a substitute nominee proposed by the Board of
Directors if any nominee becomes unavailable for election. At this time, the
Board knows of no reason why any nominee might be unavailable to serve.
PROPOSAL TWO
AMENDMENT TO THE ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF
SHARES OF AUTHORIZED COMMON STOCK
The Board of Directors of the Company has approved an amendment to the
Company's Articles of Incorporation to increase the number of shares of
authorized Common Stock from 100,000,000 shares to 250,000,000 shares.
17
Background and Discussion of Proposed Amendment
The proposed increase in the authorized Common Stock has been recommended
by the Board of Directors to ensure that an adequate supply of authorized
unissued shares is available for general corporate needs. With respect to the
Company's authorized capital: (i) 61,801,679 shares of Common Stock were
outstanding on the July 29, 2005; (ii) an additional 2,775,000 shares of
authorized Common Stock have been reserved for issuance under the Company's
option plans; (iii) approximately 55,706,667 shares of authorized common stock
have been reserved for issuance or may be reserved for issuance upon conversion
of principal and accrued interest pursuant to convertible notes and upon
exercise of warrants and (iv) approximately 7,500,000 shares have been reserved
for issuance pursuant to arrangements to settle debt or acquire assets for
shares.
The additional authorized shares of Common Stock may be used for
additional options and warrants, for raising additional capital for the
operations of the Company or acquiring other businesses, and may also be used
for such purposes as future stock dividends or stock splits. There are currently
no plans or arrangements relating to the issuance of any of the additional
shares of Common Stock proposed to be authorized, other than pursuant to the
exercise of options or warrants or conversion of notes. Such shares would be
available for future issuance without further action by the shareholders, unless
required by the Company's Articles of Incorporation or Bylaws or by applicable
law.
Anti-Takeover Effects. The issuance of additional shares of Common Stock
by the Company may also potentially have an anti-takeover effect by making it
more difficult to obtain stockholder approval of various actions, such as a
merger or removal of management. The increase in authorized shares of common
stock has not been proposed for an anti-takeover related purpose and the Board
of Directors and management have no knowledge of any current efforts to obtain
control of the Company or to effect large accumulations of its Common Stock.
Dilutive Effects. The authorization and subsequent issuance of additional
shares of common stock may, among other things, have a dilutive effect on
earnings per share and on the equity and voting power of existing holders of
common stock. The actual effect on the holders of common stock cannot be
ascertained until the shares of common stock are issued in the future. However,
such effects might include dilution of the voting power and reduction of amounts
available on liquidation.
Vote Required and Recommendation of Board
Proposal Two requires the affirmative vote of a majority of the votes cast
by the holders of shares entitled to vote. The Board of Directors recommends
that shareholders vote "For" the proposed amendment to the Articles of
Incorporation.
18
ANNUAL REPORT TO SHAREHOLDERS
Included with this Proxy Statement is the Company's 2005 Annual Report on
Form 10-KSB for the year ended April 30, 2005.
OTHER MATTERS
Management and the Board of Directors of the Company know of no matters to
be brought before the Meeting other than as set forth herein. However, if any
such other matters properly are presented to the shareholders for action at the
Meeting and any adjournments or postponements thereof, it is the intention of
the proxy holder named in the enclosed proxy to vote in his discretion on all
matters on which the shares represented by such proxy are entitled to vote.
SHAREHOLDER PROPOSALS
Proposals from shareholders intended to be present at the next Annual
Meeting of shareholders should be addressed to CanWest Petroleum Corporation.,
Attention: Corporate Secretary, 206-475 Howe Street, Vancouver, B.C., Canada
V6C-2B3 and we must receive the proposals by April 17, 2006. Upon receipt of any
such proposal, we shall determine whether or not to include any such proposal in
the Proxy Statement and proxy in accordance with applicable law. It is suggested
that shareholders forward such proposals by Certified Mail-Return Receipt
Requested. After April 17, 2006, any shareholder proposal submitted outside the
process of Rule 14a-8 will be considered to be untimely.
BY ORDER OF THE BOARD OF DIRECTORS:
CANWEST PETROLEUM CORPORATION
Thornton J. Donaldson, President
19
CANWEST PETROLEUM CORPORATION
Security Class COMMON
Holder Account Number
C9999999999
Form of Proxy - Annual Meeting of Shareholders to be held on September 19, 2005
This Form of Proxy is solicited by and on behalf of Management.
Notes to proxy
1. Every holder has the right to appoint some other person of their choice,
who need not be a holder, to attend and act on their behalf at the
meeting. If you wish to appoint a person other than the persons whose
names are printed herein, please insert the name of your chosen
proxyholder in the space provided (see reverse).
2. If the securities are registered in the name of more than one owner (for
example, joint ownership, trustees, executors, etc.), then all those
registered should sign this proxy. If you are voting on behalf of a
corporation or another individual you may be required to provide
documentation evidencing your power to sign this proxy with signing
capacity stated.
3. This proxy should be signed in the exact manner as the name appears on the
proxy.
4. If this proxy is not dated, it will be deemed to bear the date on which it
is mailed by Management to the holder.
5. The securities represented by this proxy will be voted as directed by the
holder, however, if such a direction is not made in respect of any matter,
this proxy will be voted as recommended by Management.
6. The securities represented by this proxy will be voted or withheld from
voting, in accordance with the instructions of the holder, on any ballot
that may be called for and, if the holder has specified a choice with
respect to any matter to be acted on, the securities will be voted
accordingly.
7. This proxy confers discretionary authority in respect of amendments to
matters identified in the notice of meeting or other matters that may
properly come before the meeting.
VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!
Vote by mail may be the only method for holdings held in the name of a
corporation or securities being voted on behalf of another individual.
Voting by mail or by Internet are the only methods by which a holder may appoint
a person as proxyholder other than the Management nominees named on the reverse
of this proxy.
Instead of mailing this proxy, you may choose one of the two voting methods
outlined below to vote this proxy. Have this proxy in hand if you call.
To Vote Using the Telephone To Vote Using the Internet
(Only Available Within Canada and U.S.)
o Go to the following web
o Call the toll free site:
number Listed BELOW from www.computershare.com/ca/proxy
a touch tone telephone.
There is NO CHARGE for o Voting Instructions must
this call. be received by 10:00 am,
1 8XX XXX-XXXX Pacific Time, on
September 15, 2005.
o Voting Instructions must
be Received by 10:00 am
Pacific Time, on
September 15, 2005.
To vote by telephone or the Internet, you will need to provide your CONTROL
NUMBER, HOLDER ACCOUNT NUMBER and ACCESS NUMBER listed below.
CONTROL NUMBER 011248 HOLDER ACCOUNT NUMBER C9999999999 ACCESS NUMBER 12345
If you vote by telephone or the Internet, DO NOT mail back this proxy.
Proxies submitted must be received by 10:00 am, Pacific Time, on September 15,
2005.
Appointment of Proxyholder
The undersigned "Registered Print the name of the person you ---------------------
Shareholder" of CanWest Petroleum are appointing if this person is | |
Corporation (the "Company") hereby OR someone other than the Chairman of | |
appoints: Thornton J. Donaldson, or the Meeting. ---------------------
failing him, William Timmins,
as my/our proxyholder with full power of substitution and to vote in accordance
with the following direction (or if no directors have been given, as the
proxyholder sees fit) and all other matters that may properly come before the
Annual Meeting of the Shareholders of CanWest Petroleum Corporation to be held
at Suite 206 - 475 Howe Street, Vancouver, British Columbia on September 19,
2005 at 10:00 AM (Pacific Time) and at any adjournment thereof.
1. Election of Directors
For Withhold
To elect as a Director
Thornton J. Donaldson |_| |_|
To elect as a Director
William G. Timmins |_| |_|
Resolution Management recommends a vote FOR the following resolution. Please
read the resolution in full in the accompanying proxy materials.
2. Approval of an amendment to the Company's Articles of Incorporation to
increase the number of shares of authorized Common Stock from 100,000,000 to
250,000,000.
For Against Abstain
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Authorized Signature(s) - Sign Here - This section must be completed for your
instructions to be executed.
I/We authorize you to act in accordance with my/our instructions set out above.
I/We hereby revoke any proxy previously given with respect to the Meeting. If no
voting instructions are indicated above, this Proxy will be voted as recommended
by management.
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Date