FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of November, 2002
ENERGY POWER SYSTEMS LIMITED
(FORMERLY: ENGINEERING POWER SYSTEMS LIMITED)
---------------------------------------------
(Address of Principal executive offices)
Suite 301, 2 Adelaide Street West, Toronto, Ontario, M5H 1L6
------------------------------------------------------------
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover form 20-F or Form 40-F:
Form 20-F X Form 40-F
-----
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2b under the Securities Exchange Act of 1934:
Yes No X
-----
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3- 2(b): 82
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ENERGY POWER SYSTEMS LIMITED
(formerly: Engineering Power Systems Limited)
Date: November 29, 2002 By:____"Sandra J. Hall"____ ______
--------------------- ----------------------------------
Sandra J. Hall, President, Secretary & Director
Energy Power Systems Limited
2 Adelaide Street West, Suite 301
Toronto, Canada
M5H 1L6
MANAGEMENT INFORMATION CIRCULAR
SOLICITATION OF PROXIES
This Management Information Circular is furnished in connection with the
solicitation of proxies by and on behalf of the management of ENERGY POWER
SYSTEMS LIMITED (the "CORPORATION") for use at the Annual and Special Meeting of
Shareholders of the Corporation (the "MEETING") to be held at the time and place
and for the purposes set forth in the attached Notice of Annual and Special
Meeting of Shareholders (the "NOTICE"). It is expected that the solicitation
will be by mail primarily, but proxies may also be solicited personally by
officers, directors, or regular employees of the Corporation. The cost of such
solicitation will be borne by the Corporation.
APPOINTMENT, REVOCATION AND DEPOSIT OF PROXIES
The persons named in the enclosed form of proxy are directors or officers
of the Corporation.
A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A
SHAREHOLDER) TO ATTEND AND ACT FOR HIM OR HER AND ON HIS OR HER BEHALF AT THE
MEETING OTHER THAN THE PERSONS DESIGNATED IN THE ENCLOSED FORM OF PROXY. SUCH
RIGHT MAY BE EXERCISED BY STRIKING OUT THE NAMES OF THE PERSONS DESIGNATED IN
THE ENCLOSED FORM OF PROXY AND BY INSERTING IN THE BLANK SPACE PROVIDED FOR THAT
PURPOSE THE NAME OF THE DESIRED PERSON OR BY COMPLETING ANOTHER PROPER FORM OF
PROXY AND, IN EITHER CASE, DELIVERING THE COMPLETED AND EXECUTED PROXY TO THE
CORPORATION BEFORE THE TIME OF THE MEETING OR ANY ADJOURNMENT THEREOF.
A shareholder forwarding the enclosed proxy may indicate the manner in
which the appointee is to vote with respect to any specific item by checking the
appropriate space. If the shareholder giving the proxy wishes to confer a
discretionary authority with respect to any item of business then the space
opposite the item is to be left blank. The shares represented by the proxy
submitted by a shareholder will be voted in accordance with the directions, if
any, given in the proxy.
A shareholder who has given a proxy may revoke it at any time in so far as
it has not been exercised. A proxy may be revoked, as to any matter on which a
vote shall not already have been cast pursuant to the authority conferred by
such proxy, by instrument in writing executed by the shareholder or by his
attorney authorized in writing or, if the shareholder is a body corporate, by an
officer or attorney thereof duly authorized, and deposited either 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 with the Chairman of such Meeting on the day of
the Meeting or any adjournment thereof, and upon either of such deposits the
proxy is revoked. A proxy may also be revoked in any other manner permitted by
law.
Shareholders who do not hold their Common Shares in their own name
(referred to herein as "beneficial shareholders") are advised that only proxies
from shareholders of record can be recognized and voted at the Meeting. If
Common Shares are listed in an account statement provided to a shareholder by a
broker, then in almost all cases those Common Shares will not be registered in
the shareholders name on the records of the Corporation. Such Common Shares
will more likely be registered under the name of the shareholders broker or an
agent of that broker. Common Shares held by brokers or their nominees can only
be voted (for or against resolutions) upon the instructions of the beneficial
shareholder. Without specific instructions, brokers/nominees are prohibited
from voting Common Shares for their clients. Beneficial shareholders who
complete and return a form of proxy must indicate thereon the person (usually a
brokerage house) who holds their common shares as a registered shareholder.
Applicable regulatory policy requires intermediaries/brokers to seek voting
instructions from beneficial shareholders in advance of shareholders meetings.
Every intermediary (broker) has its own mailing procedure, and provides its own
return instructions, which should be carefully followed. The form of proxy
supplied to beneficial shareholders is identical to that provided to registered
shareholders. However, its purpose is limited to instructing the registered
shareholder how to vote on behalf of the beneficial shareholder. The majority
of brokers now delegate responsibility for obtaining instructions from clients
to ADP Investor Communications ("ADP"). ADP applies a special sticker to the
proxy forms, mailing those forms to the beneficial shareholders and asks
beneficial shareholders to return the proxy forms to ADP. ADP then tabulates
the results of all instructions received and provides appropriate instructions
respecting the voting of Common Shares to be represented at the Meeting. A
BENEFICIAL SHAREHOLDER RECEIVING A PROXY WITH AN ADP STICKER ON IT CANNOT USE
THAT PROXY TO VOTE COMMON SHARES DIRECTLY AT THE MEETING. THE PROXY MUST BE
RETURNED TO ADP WELL IN ADVANCE OF THE MEETING IN ORDER TO HAVE THE COMMON
SHARES VOTED.
MANNER OF VOTING AND EXERCISE OF DISCRETION BY PROXIES
The persons named in the enclosed form of proxy will vote the common shares
in respect of which they are appointed in accordance with the direction of the
shareholders appointing them. IN THE ABSENCE OF SUCH DIRECTION, SUCH COMMON
SHARES WILL BE VOTED FOR EACH OF THE MATTERS IDENTIFIED IN THE NOTICE AND
DESCRIBED IN THIS CIRCULAR. The enclosed form of proxy confers discretionary
authority upon the persons named therein with respect to amendments or
variations to matters identified in the Notice of Meeting, and with respect to
other matters which may properly come before the Meeting. At the time of the
printing of the Circular, management of the Corporation knows of no such
amendments, variations or other matters to come before the Meeting other than
the matters referred to in the Notice.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The authorized capital of the Corporation consists of an unlimited number
of common shares (the "COMMON SHARES") and an unlimited number of Class A
Preferred Shares issuable in series. An aggregate of 10,578,645 Common Shares
and Nil Class A Preferred Shares were issued and outstanding as of the close of
business on November 21, 2002. Each Common Share entitles the holder thereof to
one (1) vote at all meetings of shareholders.
All shareholders of record at the close of business on November 21, 2002
are entitled either to attend and vote at the Meeting in person the shares held
by them, or provided a completed and executed proxy shall have been delivered to
the Corporation, to attend and vote thereat by proxy the shares held by them.
However, if a shareholder has transferred any Common Shares after November 21,
2002 and the transferee of such shares establishes ownership thereof and makes a
written demand, not later than ten 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.
As at November 21, 2002, to the knowledge of the directors and senior
officers of the Corporation, no persons or companies, beneficially own, directly
or indirectly, or exercise control or direction over more than ten percent (10%)
of the issued and outstanding voting shares of the Corporation.
PARTICULARS OF MATTERS TO BE ACTED UPON
ELECTION OF DIRECTORS
The shareholders are being asked to elect five (5) directors at this
Meeting. THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY INTEND TO VOTE FOR
THE ELECTION OF THE NOMINEES WHOSE NAMES ARE SET FORTH BELOW. The management
does not contemplate that any of the nominees will be unable to serve as a
director but if that should occur for any reason prior to the Meeting, the
persons named in the enclosed form of proxy reserve the right to vote for
another nominee in their discretion. Each director elected will hold office
until the close of business on the day of the first annual meeting of
shareholders of the Corporation following his election unless his office is
earlier vacated in accordance with the articles of the Corporation.
The following are the names of management's nominees for election as
directors of the Corporation together with their positions held with the
Corporation, municipalities of residence, principal occupations for the past
five years, and the number of shares beneficially owned or over which control or
direction is exercised:
NAME, ADDRESS PRINCIPAL DATE ELECTED SHARES
AND POSITION (1) OCCUPATION DIRECTOR HELD (2)
---------------- ---------- -------------- --------
James C. Cassina(3) Chairman and Director September 19, 1996 273,491(6)
Chairman and of Energy Power Systems
Director Limited. Previously
Toronto, Ontario President and Chief
Officer of Energy
Power Systems Limited.
Sandra J. Hall (4) President, Secretary and December 29, 1997 Nil
President, Secretary Director of Energy Power
and Director Systems Limited. Previously
Ajax, Ontario Vice-President Corporate
Affairs of Energy Power
Systems Limited.
Ramesh K. Naroola (5) Self Employed Consultant October 1, 1999 Nil
Director in India Banking and
New Delhi, India Labour Law
Ian S. Davey (5) President of China December 29, 1997 Nil
Director One Communications
Toronto, Ontario
Milton Klyman (5) Self Employed Financial April 3, 2001 Nil
Director Consultant
Toronto, Ontario
SHAREHOLDERS ARE URGED TO ELECT MANAGEMENT'S NOMINEES AS DIRECTORS.
NOTES:
(1) Each of the persons proposed to be nominated as a director of the
Corporation, has been elected to their present term of office by a
vote of shareholders at a meeting, the notice of which was accompanied
by an information circular, which stated his principal occupation
during the five years prior to the date of such circular.
(2) Information as to shares beneficially owned directly or indirectly by
each nominee or over which each nominee exercises control or
direction, not being within the knowledge of the Corporation,
has
been furnished by the respective nominees individually.
(3) Mr. Cassina's three-year employment contract expired under its own terms
on June 30, 2002. Effective July 1, 2002, Mr. Cassina was appointed
Chairman of the Board of Directors.
(4) Effective July 1, 2002, Ms. Hall was appointed President to fill the
vacancy left by Mr. Cassina.
(5) Member of the Audit Committee.
(6) Mr. Cassina beneficially owns 181,250 shares through Core Financial
Enterprises Inc., a private Ontario corporation. Mr. Cassina is
the sole director, officer and controlling shareholder of Core
Financial
Enterprises Inc. Mr. Cassina also holds 92,241 shares of the
Corporation directly.
APPOINTMENT OF THE AUDITOR
Unless authority to vote is withheld, persons named in the accompanying
form of proxy intend to vote for the reappointment of BDO Dunwoody LLP,
Chartered Accountants of Toronto, Ontario as the auditor of the Corporation to
hold office until the next annual meeting of shareholders and to authorize the
directors of the Corporation to fix the remuneration of the auditor.
SHARE CONSOLIDATION
The Board of Directors having regard to the recent decline in the share
price, the listing standards, policies and requirements of the American Stock
Exchange (the "EXCHANGE") and the general need for flexibility to enhance future
financing opportunities, have determined it would be in the best interests of
the Corporation and its shareholders to approve a proposal for a reverse split
of our existing issued and outstanding common shares, subject to the approval of
our shareholders. The reverse split, if approved, will consolidate our issued
and outstanding common shares in a range up to one (1) for three (3) (the
"RATIO"). Once the Ratio is determined by the Board of Directors, the number of
common shares you hold will be determined accordingly. The Ratio will be
determined by the Board of Directors in good faith based upon all relevant
factors, and the Board of Directors reserves the right to not proceed with the
reserve split if it feels the action is not in the Corporation's best interest.
PRINCIPLE REASON FOR THE REVERSE SPLIT
The American Stock Exchange policy is that in case of common shares selling
for a substantial period of time at a low price per share, the issuer shall
affect a reverse split of such shares within a reasonable time. The Exchange
considers all pertinent factors, including, market conditions in general, the
number of shares outstanding, applicable regulations of the state or country of
incorporation or of any governmental agency having jurisdiction over the company
in relationship to the Exchange policies regarding continued listing.
CERTAIN EFFECTS OF THE REVERSE SPLIT
Common Shares issued pursuant to the reverse split will be fully paid and
non-assessable. The reverse split will not alter the relative voting and other
rights of holders of the common shares, and each common share will continue to
entitle the holder to one vote.
As a result of the reverse split, the number of common shares presently
outstanding will be consolidated.
Your percentage ownership in the Corporation will remain essentially
unchanged. No fractional shares will be issued in connection with the reverse
split.
The reverse split will not affect the Corporation's shareholders' equity as
reflected on our financial statements, except to change the number of issued and
outstanding common shares.
EFFECTIVE DATE OF THE REVERSE SPLIT
If the proposal is approved by shareholders, it will become effective
according to the discretion of the Board of Directors after considering all
relevant matters. If implemented, after the reverse split is effective,
certificates representing shares of pre-reverse split common shares will be
deemed to represent only the right to receive the appropriate number of shares
of post-reverse split common shares.
EXCHANGE OF CERTIFICATES
Shareholders are entitled to exchange certificates after the reverse split
takes place, if you wish, by contacting our transfer agent Equity Transfer
Services Limited, 120 Adelaide Street West, Suite 420, Toronto, Ontario, M5H
4C3.
The special resolution shareholders will be asked to approve is attached to
this Circular as Exhibit "1". To be approved, the special resolution must be
passed by at least two-thirds of the votes cast by shareholders at the Meeting
in respect of this special resolution. UNLESS OTHERWISE SPECIFIED, THE PERSONS
NAMED IN THE ENCLOSED FORM OF PROXY WILL VOTE FOR THE SPECIAL RESOLUTION.
Management recommends the approval of this proposal.
NAME CHANGE
The Board of Directors of the Corporation has determined that the name of
the Corporation be changed from its current name to permit the pre-consolidated
and post-consolidated common shares to be differentiated. The proposed name for
the Corporation is "Energy Power Corp." or such other name as approved by the
Board of Directors of the Corporation and applicable regulatory and exchange
authorities.
To change the name, the articles of the Corporation must be amended. Such
an amendment must be authorized by a special resolution of shareholders.
Shareholders of the Corporation will therefore be asked at the Meeting to
consider and, if thought advisable, to authorize by means of a special
resolution, an amendment to the articles of the Corporation to change the name
of the Corporation to "Energy Power Corp." or such other name as may be approved
by the Board of Directors of the Corporation and applicable regulatory and
exchange authorities.
The special resolution shareholders will be asked to approve is attached to this
Circular as Exhibit "2". To be approved, the special resolution must be passed
by at least two-thirds of the votes cast by shareholders at the Meeting in
respect of this special resolution. UNLESS OTHERWISE SPECIFIED, THE PERSONS
NAMED IN THE ENCLOSED FORM OF PROXY WILL VOTE FOR THE SPECIAL RESOLUTION.
APPROVAL OF AN AMENDMENT TO THE STOCK OPTION PLAN
The Corporation's shareholders approved a stock option plan in 1996, which
provides for the issuance of options to directors, officers, employees,
consultants and other persons who provide ongoing services to the Corporation
(the "PLAN"). On November 12, 2002, the Board unanimously approved, subject to
approval by the Corporation's shareholders, an amendment to the Plan to increase
the number of common shares available for options granted under the Plan. The
Plan currently provides that the maximum aggregate number of shares reserved for
issuance and which may be purchased upon the exercise of all options granted
under the Plan shall not exceed 800,000 common shares. As stated elsewhere in
this Circular, as at the date of this Circular there are 10,578,645 common
shares of the Corporation issued and outstanding. Management of the Corporation
is proposing that the maximum number of common shares of the Corporation
eligible to be issued pursuant to the grant of options under the Plan be
increased to 20% of the issued and outstanding common shares of the Corporation
from time to time. If the Consolidation is approved and implemented by the
Corporation, the maximum number of shares issuable under the Plan will be
consolidated accordingly.
To maximize the utility of the Plan, it is the view of the board of
directors of the Corporation that it is desirable to increase the number of
common shares eligible for issuance pursuant to the grant of options thereunder
to the maximum of 20% of the issued and outstanding common shares. Pursuant to
applicable securities regulations, however, shareholder approval is required for
any such amendment to the Plan. Accordingly, shareholders of the Corporation
will be asked at the Meeting to consider, and if thought advisable, to authorize
and approve by means of an ordinary resolution, an amendment to the Plan,
increasing the maximum number of common shares of the Corporation issuable
pursuant to the grant of options thereunder to 20% of the issued and outstanding
common shares. The resolution shareholders will be asked to approve is attached
to this Circular as Exhibit "3". To be approved, the resolution must be passed
by a majority of the votes cast by the shareholders at the Meeting in respect of
this resolution. UNLESS OTHERWISE SPECIFIED, THE PERSONS NAMED IN THE ENCLOSED
PROXY WILL VOTE FOR THE RESOLUTION.
ADVANCE APPROVAL OF ISSUANCE OF COMMON SHARES
Management of the Corporation is continuing to evaluate potential
acquisitions and exploration and development opportunities to complement the
existing operations of the Corporation and to enhance future growth. In order to
find a suitable acquisition and or to provide working capital, the Corporation
may be required to raise additional capital by way of one or more private
placements with or without combined possible debt financing.
The Corporation will be seeking at the Meeting advance shareholder approval
for share issuances by the Corporation, pursuant to one or more private
placements. The Corporation proposes that the private placement(s) for which
advance approval is being sought be restricted to a maximum of 100% of the
number of Common Shares issued and outstanding at the date of this Circular,
being 10,578,645 Common Shares. If the consolidation is approved by the
shareholders and implemented, the number of Common Shares issuable pursuant to
this resolution will also be adjusted accordingly.
Any private placement proceeded with by the Corporation under the advance
approval may be subject to regulatory and exchange approval and to the following
additional restrictions:
(a) It must be completed within a twelve month period following the date the
shareholder approval is given; and
(b) It must comply with applicable regulatory and exchange requirements and
relevant private placement pricing rules.
The Board of Directors of the Corporation do not necessarily intend to
authorize the issuance of the entire number of shares authorized pursuant to the
proposed resolution. The private placements will be negotiated only if the
directors consider the terms reasonable in the circumstances and if the
directors consider that the funds are required to maintain or expand the
Corporation's operations.
Shareholders of the Corporation will therefore be asked at the Meeting to
consider and, if thought advisable, to authorize by means of an ordinary
resolution, the issuance by the Corporation during the twelve months following
the Meeting, pursuant to one or more private placements, of a maximum of 100% of
the number of common shares issued and outstanding at the date of this Circular,
currently being 10,578,645 Common Shares, at such price or prices and on such
terms as the Board of Directors of the Corporation considers appropriate,
subject to the restrictions referred to above.
The resolution shareholders will be asked to approve is attached to this
Circular as Exhibit "4". To be approved, the resolution must be passed by a
majority of the votes cast by shareholders at the Meeting in respect of this
resolution. UNLESS OTHERWISE SPECIFIED, THE PERSONS NAMED IN THE ENCLOSED PROXY
WILL VOTE FOR THE RESOLUTION.
CORPORATE GOVERNANCE
MISSION OF THE BOARD OF DIRECTORS
The mission of the Board of Directors of the Corporation is to be a
strategic asset of the organization measured by the contributions the directors
make - individually and collectively - to the long-term success of the
Corporation.
COMPOSITION OF THE BOARD
At the Meeting, shareholders will be asked to elect five directors for the
ensuing year. Of the five nominees proposed for election as directors, three
will be "unrelated directors" as they are "independent from management and 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". The "unrelated directors"
proposed for election are Messrs. Davey, Klyman and Naroola. It is the
Corporation's practice to attempt to maintain a diversity of personal experience
among its directors. During the past year the Board of Directors adopted a
Charter of the Board of Directors, and a Charter for each of the Audit
Committee, the Compensation Committee and Corporate Governance Committee.
COMMITTEES OF THE BOARD
The Corporation's Board of Directors' mandate is formalized in a written
charter. The Board of Directors discharges its responsibilities directly and
through committees of the Board of Directors, currently consisting of an Audit
Committee, Compensation Committee and Corporate Governance Committee.
The Compensation Committee and the Corporate Governance Committee consists
of a majority of unrelated directors, while the Audit Committee consists of all
unrelated directors. Each Committee has a specially designed mandate and
responsibilities, by the adoption of formal charters for each committee.
MEMBERS OF THE AUDIT COMMITTEE
The mandate of the Audit Committee is formalized in a written charter. The
members of the audit committee of the Board are Messrs. Naroola, Davey and
Klyman (Chairman). Its primary duties and responsibilities are to serve as an
independent and objective party to monitor the Corporation's financial reporting
process and control systems, review and appraise the audit activities of the
Corporation's independent auditors, financial and senior management, and the
lines of communication among the independent auditors, financial and senior
management, and the Board of Directors for financial reporting and control
matters.
MEMBERS OF THE COMPENSATION COMMITTEE
The mandate of the Compensation Committee is formalized in a written
charter. The members of the compensation committee of the Board are Messrs.
Cassina, Naroola and Davey. The Committee is responsible for making
recommendations to the Board of Directors on all matters relating to the
compensation of directors, the members of various other committees of the Board
and the senior officers of the Corporation. For the purpose of its mandate, the
Compensation Committee reviews all aspects of compensation paid to directors,
committee members, management and employees to ensure the Corporation's
compensation programs are competitive, ensuring that the Corporation can
attract, motivate and retain high calibre individuals.
MEMBERS OF THE CORPORATE GOVERNANCE COMMITTEE
The mandate of the Corporate Governance Committee is formalized in a
written charter. The members of the corporate governance committee of the Board
are Messrs. Cassina, Naroola and Davey. The Committee's duties and
responsibilities include, but are not limited to, reviewing periodically the
criteria regarding the composition of the board of directors and committees of
the board of directors; assessing and providing recommendations on the
effectiveness of the board of directors as a whole, the committees of the board
of directors and the contribution of individual directors; supervising the
Corporation's securities compliance procedures; ensuring that an appropriate
selection process for new nominees is in place; and dealing with succession
planning issues relating to senior management.
CORPORATE FILINGS
The Corporation's public filings can be accessed and viewed through the
Corporation's website www.epsx.com under the heading "Investor Relations" and by
clicking on "Corporate Filings". A link to the Canadian Securities Commission
can be viewed via the System for Electronic Data Analysis and Retrieval (SEDAR)
at www.sedar.com, and the United States Securities Commission through the
Electronic Data Gathering Analysis and Retrieval System (EDGAR) at
www.freeedgar.com.
---
EXECUTIVE COMPENSATIONCOMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the periods indicated, information
concerning compensation earned expressed in Canadian dollars, unless otherwise
specified during such periods by the Corporation's Chief Executive Officer and
the Corporation's other most highly compensated executive officers on June 30,
2002 (collectively the "Named Executive Officers").
For the purpose of disclosure herein of Executive Compensation, the
following table is presented in accordance with Form 40 made under the
Securities Act (Ontario).
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
NAME AND PRINCIPAL OTHER SECURITIES
POSITION WITH THE ANNUAL UNDER
CORPORATION AND/OR COMPEN- OPTIONS ALL OTHER
ITS SUBSIDIARY YEAR SALARY BONUS SATION GRANTED COMPENSATION
($) ($) ($)(1) (#) ($)
James C. Cassina(2)(4) 2002 100,000 Nil Nil 120,000 17,342
Chairman 2001 100,000 Nil Nil 65,000 7,736
Chief Executive 2000 212,500 Nil Nil 15,625 Nil
Officer, President
Sandra J. Hall(3)(4) 2002 48,000 Nil Nil 81,500 8,341
President, 2001 12,000 Nil Nil 65,000 Nil
and Secretary 2000 12,000 Nil Nil 6,250 Nil
Scott T. Hargreaves(4) 2002 100,000 Nil Nil 25,000 Nil
2001 100,000 Nil Nil 10,000 Nil
2000 100,000 Nil Nil 5,625 Nil
John H. Brake(4) 2002 119,676 Nil 9,575 10,000 7,936
President of M&M 2001 122,863 5,000 9,418 10,000 10,788
Engineering Limited 2000 121,897 15,000 9,732 12,500 10,644
and M&M Engineering
Offshore Limited
--------------------------------------------------------------------------------
David R. Myers 2002 131,957 Nil 10,324 10,000 10,103
Vice-President of M&M 2001 120,951 20,000 10,202 Nil 10,054
Engineering Limited 2000 118,337 14,500 10,569 Nil 8,862
and M&M Offshore Limited
NOTES:
(1) This figure represents employer contributions to Registered Retirement
Savings Plans made by the Corporation and/or its subsidiaries.
(2) Mr. Cassina's three-year employment contract expired under its own terms
on June 30, 2002. Effective July 1, 2002, Mr. Cassina was appointed
Chairman of the Board of Directors.
(3) Effective July 1, 2002, Ms. Hall was appointed President to fill the
vacancy left by Mr. Cassina.
(4) During the fiscal year 2001, the Corporation cancelled 15,625 options
granted to Mr. Cassina exercisable at $14.00; 12,500 options
granted to Mr. Brake exercisable at $20.00; 2,500 and 3,125 options
granted to Mr. Hargreaves exercisable at $12.00 and $20.00; and
3,750 options granted to Ms. Hall exercisable at $20.00. 2,500
options granted to Ms. Hall expired February 15, 2001 exercisable at
$12.00.
COMPENSATION OF DIRECTORS
There was no compensation paid by the Corporation to the directors for
their services in their capacity as directors or any compensation paid to
committee members during the financial year ended June 30, 2002 except as
described below.
During the financial year ended June 30, 2002, a total of 20,000 options
and 27,500 options were granted to directors and a consultant of the Corporation
(excluding the Named Executive Officers), exercisable at prices ranging from
$4.25 to $6.30 expiring October 4, 2005 and January 8, 2006 respectively.
During the financial year ended June 30, 2002, a total of 20,000 stock
options were exercised, excluding the Named Executive Officers. Also during the
financial year ended June 30, 2002, 25,000 stock options were cancelled by
agreement with option holders.
REPORT ON EXECUTIVE COMPENSATION
Executive Compensation Program. The Corporation's executive compensation
program is designed to attract and retain qualified executives who can ensure
the current and long-term success of the Corporation. Compensation for
executive officers is currently comprised of the following elements - an annual
salary, the grant of stock options from time to time, pension and medical
benefits and auto allowances (see Summary Compensation Table).
Salary. The Committee's policy objectives are to pay salaries to the
Corporation's executives that are competitive with those paid by companies
comparable to the Corporation in the industry.
Stock Options. The Corporation has an Option Plan pursuant to which
directors, officers and employees of the Corporation and other person who
provide management or consulting services to the Corporation are eligible to be
granted by the Board of Directors or the Compensation Committee of the Board of
Directors, an option to acquire common shares of the Corporation.
The Option Plan provides eligible persons with an opportunity to
participate in the growth and development of the Corporation by providing such
persons with the opportunity to acquire a proprietary interest in the
Corporation. Options are granted in recognition of individual services, and to
encourage participants to increase their efforts to make the Corporation more
successful. Upon exercise of an option, the shares thereby purchased must be
paid for in full. The Corporation does not provide financial assistance in
connection with the exercise of options.
LONG-TERM INCENTIVE PLAN AWARDS
Currently, the Corporation does not have a long-term incentive plan.
OPTIONS/SAR GRANTS
The following table sets forth Options granted during the financial year
ended June 30, 2002 to the Named Executive Officers.
Market Value
Of Securities
Securities % of Total Underlying Options
Under Options Options Exercise on Date
Granted Granted Price Of Grant Expiration
Name (#) To Employees ($) ($) Date
---- --- ------------ --- --- ----
James C. Cassina 150,000 50.85% 6.30 $6.18 January 8/06
John H. Brake 10,000 3.39% 6.30 $6.18 January 8/06
Sandra J. Hall 100,000 33.89% 6.30 $6.18 January 8/06
Scott T. Hargreaves 25,000 8.47% 6.30 $6.18 January 8/06
David Myers 10,000 3.39% 6.30 $6.18 January 8/06
AGGREGATED OPTION/SAR EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL
YEAR AND FINANCIAL YEAR-END OPTION/SAR VALUES
The following table discloses the number and value of exercised and
unexercised options held by the Named Executive Officers during the last
completed financial year:
Value of
Unexecised in
Unexercised the-Money
Options/SARs at Options/SAR's
Securities Aggregate June 30, 2002 at June 30, 2002
Acquired Value Exercisable(2)/ Exercisable(3)
Name on Exercise Realized(1) Unexercisable Unexercisable
James C. Cassina 95,000 $395,782 120,000/0 Nil/Nil
Sandra J. Hall 83,500 $340,684 81,500/0 Nil/Nil
John H. Brake 10,000 $55,344 10,000/0 Nil/Nil
Scott T. Hargreaves 10,000 $37,821 25,000/0 Nil/Nil
David Myers Nil Nil 10,000/0 Nil/Nil
Notes:
(1) All dollar amounts or references to dollars are expressed in Canadian
dollars, unless otherwise specified.
(2) These options are exercisable at $6.30 per share and expire January 8,
2006.
(3) The closing price of the Corporation's Common Shares on the American
Stock Exchange on June 28, 2002 was US$1.64.
STOCK OPTION REPRICINGS
The Corporation did not during the financial year ended June 30, 2002
re-price downward any stock options.
DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
The Corporation does not have a defined benefit or actuarial plan.
TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITIES AND EMPLOYMENT CONTRACTS
As of the financial year ended June 30, 2002, there are no employment
contracts between the Corporation or its subsidiaries and any of its Named
Executive Officers. As well, there is no compensatory plan or arrangement with
respect to an Executive Officer which results or will result from the
resignation, retirement or any other termination of employment of an Executive
Officer's employment with the Corporation and its subsidiaries or from a change
of control of the Corporation or any subsidiary of the Corporation or a change
in an Executive Officer's responsibilities following change of control except as
below.
As of July 1, 1999, the Corporation and Mr. Cassina entered into a
three-year employment contract cancellable upon six-months written notice with
or without cause, whereby Mr. Cassina would serve as Chief Executive Officer of
the Corporation. Effective June 30, 2002, the three-year employment contract
between the Corporation and Mr. Cassina expired under its own terms.
PERFORMANCE GRAPH
------------------
The following graph compares the five year cumulative shareholder return for CDN
$100.00 invested in the Corporation on June 30, 1998 with the cumulative total
return of the S&P/TSX Composite Index since that date.
The following graph compares the five year cumulative shareholder return for CDN
$100.00 invested in the Corporation on June 30, 1998 with the cumulative total
return of the S&P/TSX Composite Index since that date.
[GRAPHIC OMITED]
[GRAPHIC OMITED]
PERFORMANCE CHART June June June June June
1998 1999 2000 2001 2002
Energy Power Systems $50.40 $11.00(1) $1.00 $4.60(2) $2.49(1)
Cumulative value
of CDN $100
investment $100 $21.82 $1.98 $9.13 $4.94
S&P/TSX Composite
Index 7,366.89 7,010.07 10,195.45 7,736.35 7,145.61
Cumulative value
of CDN $100 investment $100 $95.16 $138.39 $105.01 $96.99
(1) Four-for-one consolidation occurred in January, 1999 and the prior share
value has been adjusted and is reflected in the Chart.
(2) Four-for-one consolidation occurred in February, 2001 and the prior share
value has been adjusted and is reflected in the Chart.
(3) Price converted from United States trading value at conversion rate of
1.5187.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
During the year ended June 30, 2002, no director or senior officer was
indebted to the Corporation, nor has any associate or affiliate of any director
or senior officer of the Corporation been indebted to the Corporation or any of
its subsidiaries, other than as disclosed below. As at November 21, 2002,
employees, officers and directors owe the Corporation an aggregate of $8,668.
Financially
Largest Assisted
Amount Securities
Outstanding Purchase
During Amount During
Financial Outstanding Financial
Year as at Year
Name and Involvement of ended June November ended June
Principal Issuer of 30, 2002 21, 2002 30, 2002 Security for
Position Subsidiary ($) ($) (#) Indebtedness
David Myers Vice-President,
M&M Engineering
Limited and
M&M Engineering
Offshore Limited 13,054 8,668 N/A N/A
MANAGEMENT CONTRACTS
No insider of the Corporation has an interest in a material transaction
with the Corporation except as described above in Executive Compensation.
INTERESTS OF INSIDERS IN MATERIAL TRANSACTIONS
No insider of the Corporation has an interest in a material transaction
with the Corporation since the beginning of the Corporation's last financial
year or in any proposed transaction with the Corporation other than described
under Executive Compensation.
GENERAL
Except as otherwise indicated, information contained herein is given as of
November 21, 2002. Management knows of no other matters to come before the
Meeting, however, if any other matters which are not now known to Management
should come properly before the Meeting, the proxy will be voted on such matters
in accordance with the best knowledge of the person voting it.
DIRECTORS APPROVAL
The contents and the sending of this Circular to shareholders of the
Corporation have been approved by the Board of Directors of the Corporation.
DATED at Toronto, Ontario this 21st day of November 2002.
BY ORDER OF THE BOARD
"SANDRA J. HALL"
PRESIDENT AND SECRETARY
EXHIBIT " 1"
SPECIAL RESOLUTION - SHARE CONSOLIDATION
----------------------------------------
BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:
1. The articles of the Corporation be amended to consolidate the issued and
outstanding common shares of the Corporation by changing each of the issued and
outstanding common shares into up to one-third (1/3) of one common share,
provided however, that no fractional shares will be issued but in lieu thereof,
the number of consolidated common shares to be received by a registered
shareholder will be rounded up if .5 or over of a common share or rounded down
if under .5 of a common share to the nearest whole number of consolidated common
shares;
2. The Corporation is hereby authorized to apply for a certificate of
amendment under the Business Corporation Act (Ontario) amending its articles as
set forth above, and any one director or officer of the Corporation is hereby
authorized to do all such things, and to execute and deliver for and on behalf
of the Corporation all such notices, documents and instruments, including
articles of amendment, as may be considered necessary or desirable to give
effect to the foregoing, and
3. Notwithstanding the foregoing, the directors of the Corporation, in their
sole discretion and without further approval of the shareholders of the
Corporation, may revoke this special resolution at any time before the
certificate of amendment giving effect to the consolidation becomes effective.
EXHIBIT "2"
SPECIAL RESOLUTION - NAME CHANGE
------------------------------------
BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:
1. The articles of the Corporation be amended to change the name of the
Corporation from "Energy Power Systems Limited" to "Energy Power Corp." or such
other name as approved by the board of directors of the Corporation and
applicable regulatory and exchange authorities.
2. Any one director or officer of the Corporation be and is hereby
authorized, for and on behalf of the Corporation, to execute and deliver, or
cause to be delivered, articles of amendment of the Corporation, as required
pursuant to the Business Corporations Act (Ontario), and to do all such other
acts or things necessary or desirable to implement, carry out and give effect to
the said change of name.
3. The directors of the Corporation are hereby authorized, in their
discretion, to revoke this special resolution or any portion thereof before it
is acted upon without further approval or authorization of the shareholders of
the Corporation.
EXHIBIT "3"
RESOLUTION APPROVING AN AMENDMENT
TO THE CORPORATION'S STOCK OPTION PLAN
--------------------------------------
BE IT RESOLVED AS A RESOLUTION THAT:
1. An amendment to the Corporation's Stock Option Plan (the "Plan")
increasing the maximum aggregate number of common shares reserved by the
Corporation for issuance pursuant to grant of options under the Plan from
800,000 to 20% of the issued and outstanding common shares of the Corporation
from time to time is hereby authorized, approved and confirmed.
2. Any one director or officer of the Corporation be and is hereby
authorized, for and on behalf of the Corporation, to execute and deliver under
the corporate seal or otherwise all such deeds, documents, instruments and
assurances, and do all such acts and things as in his opinion may be necessary
or desirable to give effect to this resolution.
EXHIBIT "4"
RESOLUTION RE PRIVATE PLACEMENTS
--------------------------------
BE IT RESOLVED AS A RESOLUTION THAT:
1. Energy Power Systems Limited (the "CORPORATION") be and is hereby
authorized to issue during the twelve months following the Meeting (as defined
below), pursuant to one or more private placements, a maximum of 10,578,645
Common Shares at such price or prices and on such terms as the board of
directors of the Corporation considers appropriate, subject to the restrictions
described in the management information circular of the Corporation dated
November 21, 2002 distributed in connection with the annual and special meeting
of shareholders of the Corporation held on December 30, 2002 (the "MEETING").
2. The directors of the Corporation are hereby authorized, in their
discretion, to revoke this resolution or any portion thereof before it is acted
upon without further approval or authorization of the shareholders of the
Corporation.