Formation Metals reveals leadership and compensation background as well as lack of relevant experience of dissident candidates
Formation Metals reveals leadership and compensation background as well as lack of relevant experience of dissident candidates
Vancouver, BC June 18, 2013 - Formation Metals Inc. (FCO-TSX) (Formation) would like to announce important information to its shareholders today regarding the nominees, Mr. Paul Carroll and Mr. David Christie, proposed by dissident shareholder, Dundee Corporation, in Take note. In particular, Formation would like to highlight Mr. Carroll's background in corporate governance and compensation, and Mr. Christie's lack of relevant public company experience. Formation also announces a positive recommendation from the leading proxy advisory firm, Institutional Shareholder Services (ISS).
Paul Carroll Executive Board compensation?
The following information about Mr. Carroll's term as a member of the Board of Directors of Hollinger Inc. should be carefully considered by the shareholders.
2004 was named to Paul Carroll's board of directors by Hollinger Inc. and was on board in October when 2004 was relieved of his duties by Conrad Black and other board members. Mr. Carroll and the remaining members subsequently received compensation, including Mr. Carroll's claim for a payment of 600.000 $ if he resigned from the Board for any reason. For the first five months of 2005, Mr. Carroll received a fee of 1.227.554 $ (including the severance payment of 600.000 $) for his seat on the Board of Directors. These remunerations and severance pay drew criticism from the media and shareholders. In an article from 10. March 2005 of Bloomberg Service, "Hollinger Inc. Directors Get Paid More Than Exxon's," Professor Dan Capscott of the Rotman School of Business at the University of Toronto, author of a book on corporate governance practices, is quoted as saying, "It's over the top unusual that members of a board of directors charge such high hourly rates. "
One shareholder finally filed suit, which led to the agreement that members of the Board of Directors (including Mr. Carroll) be removed from office and new members appointed. This agreement included exemptions for the departing members and a court order to ratify the arrangement. After appointing the newly constituted Board of Directors and reviewing the compensation of the previous board, the new board prompted Hollinger to file a motion to change the terms of the instruction so that it could challenge the severance payment made to Mr. Carroll and other aspects of his compensation , The court allowed the case to become known as [Catalyst Fund General Partner I Inc. Hollinger Inc., 2005 CanLII 20810 (ON SC)]. Given the seriousness of the allegations made against the former Board Members, the Court refused to continue assuming good faith behavior and refused to allow Mr Carroll to receive compensation for his legal costs before the full facts were brought before the General Court in a hearing. The matter was settled without further court order.
In contrast, the total compensation of all Formation executives based on the most recently available public information is within the total compensation paid by the companies we use as a benchmark. In addition, the compensation paid to our designated officers during the year ended on 28. February 2013 ended, compared to the previous fiscal year both in terms of total compensation and salaries. Contrary to Mr. Carroll's uncommon severance payment, the severance payments that Formation's executives are entitled to under certain circumstances (not including any change resulting from Dundee's contesting of two board seats) are in line with industry standards. Dundee's claim that the remuneration of executives in formation is inappropriate and has increased is simply wrong.
Paul Carroll's management?
Dundee says his candidates will "commit to upholding good corporate governance practices," and has voiced his opinion on alleged violations of law by the formation on several occasions. Then let's take a look at what the Supreme Court of Nova Scotia had to say about Mr. Carroll's legal opinion.
In the 1980 years, Mr. Carroll served as a legal advisor and then as a member of the board of directors of the Novia Scotia Savings and Loan Co., a Halifax-based financial institution. In a court order in connection with a planned hostile takeover of Novia Scotia Savings and Loan Co., the Supreme Court of Novia Scotia commented on Mr. Carroll's legal opinion as follows as to whether a particular board member is considered to be a governmental entity could be:
“Although Carroll attempted to withdraw this opinion during the trial, I believe that the attempt was made for convenience rather than a real change of heart. ...
On this point, Carroll sought to streamline his views on the affiliation with a particular company he made in 1982 regarding the shares of Avon Foods and HDHL. This was the point at which Carroll responded to a question about the apparent contradiction in his legal views with the now (at least in connection with this procedure) famous statement "Sometimes you suck and sometimes you whistle". ...
Carroll's further rationalization of this apparent contradiction does not stand up to scrutiny. I am going to discuss Carroll's position and involvement in this meeting in considerable length here, as I believe that he is largely responsible for the direction that the Board members have taken at this meeting. I've thought about this carefully, and have come to the conclusion that Carroll's hiring as NSS & L's legal counsel was: "You tell me where you want to go and I will prepare a legal opinion to assist you." that this is just another way of saying "Sometimes you suck and sometimes you whistle". "[underline added]
[Exco Corporation Limited et al. v. Nova Scotia Savings & Loan Co. et al 1987 CanLII 135 (NS SC)]
In the same decision, the Court annulled the appointment of Mr Carroll and two other Board members.
The fact is that none of Dundee's allegations that Formation violated laws are true. Dundee's latest claim is that Formation has "hampered" Dundee because it did not provide the Nonobjecting Beneficial Owners (NOBO) list until it had filed a lawsuit. However, what Dundee does not conceal is that Formation voluntarily submitted the NOBO list well in advance of the statutory period despite the fact that Dundee's request was based on an inadmissible operation that did not meet the requirements of applicable securities laws.
David Christie-relevant experience?
After extensive research, Formation could not confirm that dissident candidate David Christie has any experience as a board member or employee of a public company. In his role as an analyst, Mr. Christie's areas of expertise included gold, diamonds or precious metals, but not cobalt.
This is not the time or the market environment to allow a novice to try to join a board of directors, especially if such an experiment were to be at the expense of an experienced and proven member. It requires experience to act as a member of the board of directors of a public company; Experience that Mr. Christie does not have.
"Formation's current board has committed itself to 100%," said Mari-Ann Green, CEO of Formation. "We have always acted in the best interest of all shareholders and will continue to do so. We know that we are on the right track. In contrast, it is obvious that the dissident candidates are not suitable for our board. "
Following Dundee's proposal to elect Mr Carroll and Mr Christie to the Board of Directors, ISS has issued a second report in which it repeatedly reiterates its support for the Management candidates of Formation, Mari-Ann Green and Scott Bending. Like the 13. June 2013 was announced, ISS recommended that shareholders vote in favor of the re-election of the current board members. ISS confirmed its support most recently on the 17. June 2013, stating, "The dissidents [Dundee] have not produced convincing arguments justifying a change in the board's composition at that time. Therefore, the support of the list of candidates to management by the shareholders continues to make sense. "
We ask formation shareholders to pay attention:
Shareholders are suspended before the deadline on Wednesday, the 19. June 2013 to tune 10: 00 Watch (Pacific Time) using the WHITE proxy form. Regardless of how many shares you own, it is imperative that you submit your White Proxy proxy form so that Formation can maintain its course.
Please reject any BLUE proxy forms that you may receive from Dundee.
If you have any questions or require assistance in issuing instructions to your proxy, please contact Kingsdale Shareholder Services Inc. on + 1-416-867-2271 (collect calls are accepted) or by email ppgad@pucrs.br.
FORMATION METALS INC.
"Mari-Ann Green"
Mari-Ann Green
CEO
For more information, please contact:
ER (Rick) Honsinger, P. Geo., VP Corporate Communications
Formation Metals Inc., 1730-999 West Hastings Street, Vancouver, BC, V6C 2W2
Tel: + 1-604-682-6229 - Email: ppgad@pucrs.br - Web: formationmetals.com
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