ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Directors and senior management. The following table sets forth certain
information concerning our directors and senior management:
=================================================================================================================================
Name & Municipality of Position with Corporation Principal Occupation Age Director Since
Residence
---------------------------------------------------------------------------------------------------------------------------------
Sidney H. Belzberg Chairman of the Board, Chief Officer of the Corporation 43 1993
Toronto, Ontario Executive Officer and
Director
---------------------------------------------------------------------------------------------------------------------------------
Alicia Belzberg Executive Vice President, Officer of the Corporation 48 1993
Toronto, Ontario Secretary and Director
---------------------------------------------------------------------------------------------------------------------------------
John L. Engels(1)
Greenwich, Connecticut Vice-Chairman of the Board Vice-Chairman of the 64 2001
and Director Corporation and Chairman and
CEO of Letteau Ltd., a risk
management firm
---------------------------------------------------------------------------------------------------------------------------------
Lawrence J. Cyna, CA Chief Financial Officer and Officer of the Corporation 58 1999
Toronto, Ontario Director
---------------------------------------------------------------------------------------------------------------------------------
Donald W. Wilson Chief Operating Officer and Officer of the Corporation 50 1994
Toronto, Ontario Director
---------------------------------------------------------------------------------------------------------------------------------
Dr. William Gnam(1)(2) Director Economist, University of Toronto 39 1994
Toronto, Ontario
---------------------------------------------------------------------------------------------------------------------------------
Stephen Sadler(1)(2) Director Chairman and CEO of Enghouse 51 1997
Toronto, Ontario Systems Limited, a software
developer
=================================================================================================================================
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(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Except as disclosed below under "Management", during the last five years, our
directors and officers noted above have held the occupation or have been
associated with the companies or firms listed opposite their respective names.
36
Management
Belzberg's management team and board of directors consists of the
following:
Sidney H. Belzberg has been Chairman and Chief Executive Officer of the
Corporation since he co-founded Belzberg in 1993. Mr. Belzberg is married to
Alicia Belzberg. From 1987 to 1992, Mr. Belzberg was President of Eastern
Datacom Systems Ltd. Mr. Belzberg holds a Bachelor of Science degree from the
University of Alberta.
Alicia Belzberg has been Executive Vice President of the Corporation
since she co-founded Belzberg in 1993. Ms Belzberg is married to Mr. Belzberg.
From 1989 to 1992, Ms Belzberg was General Manager of Eastern Datacom Systems
Ltd. Ms. Belzberg holds a Bachelor of Arts degree from Concordia University.
Lawrence J. Cyna has served as Chief Financial Officer of the
Corporation since April, 1999. Prior to joining Belzberg, Mr. Cyna was a Senior
Partner at Cyna & Co., Chartered Accountants, in Toronto, Canada. Mr. Cyna is a
Chartered Accountant and recipient of the Founder's Prize for academic
achievement from the Canadian Institute of Chartered Accountants. Mr. Cyna is
also a Certified Public Accountant having obtained his accreditation with
distinction in 1999. Mr. Cyna intends to retire as an officer of the Corporation
when a new Chief Financial Officer is appointed.
Donald W. Wilson has served as Chief Operating Officer of the
Corporation since June, 1994. From 1991 to 1994, Mr. Wilson was employed at
Gordon Capital Corporation, in Toronto, Canada, where he was Manager of
Information Systems. Mr. Wilson holds a Masters degree in Music from the
University of Toronto.
Robert C. Sheehan has served as Chief Executive Officer of the
Corporation's subsidiaries, EBS since its inception in 2000 and RCS since its
inception in 1985. Mr. Sheehan is registered as a registered representative with
the SEC.
Stephen Sadler has been a Director of the Corporation since October 28,
1997. Since April 2000, Mr. Sadler has been the Chairman and CEO of Enghouse
Systems Limited, a world leading software engineering company that develops
Geographic Information Systems based solutions for Telecommunications and
Utility companies. He is also Chairman of Helix Investments Corporation, a
venture capital firm, a position which he has held since 1999. Mr. Sadler served
as President and CEO of Geac Computer Corporation from 1990 to 1996, as Vice
Chairman from 1996 to 1998, and as Senior Advisor in 1999. Mr. Sadler is
currently a director of several high-tech private and public companies,
including Open Text Corporation, a leading provider of collaborative commerce
applications, such as Livelink(R), and Cyberplex Inc., one of North America's
leading Internet professional services companies. Mr. Sadler has a Master of
Business Administration degree, Chartered Accountant's designation, and Honours
Bachelor's degree in Applied Science and Engineering .
Dr. William H. Gnam has been a Director of the Corporation since June
13, 1994. Dr. Gnam is a Harvard-trained economist and a researcher at the
University of Toronto. He has a Master of Science degree from Oxford University,
England, where he was a Rhodes scholar, and a Medical Doctor degree from the
University of Calgary.
37
John L. Engels has been a Director of the Corporation since June 28,
2001. He became Vice-Chairman of the board of Belzberg in March, 2002. Mr.
Engels has been the Chairman and Chief Executive Officer of Letteau Ltd. since
1996. Mr. Engels is also Chairman of Assets International Inc., a publisher of
financial service industry publications which was founded in 1986. From 1987 to
1991, Mr. Engels managed the North American Securities Division of UBS
Securities. In addition, he also ran the Equities Division of First Boston
Corporation from 1981 to 1985.
38
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets out information concerning the compensation
earned from us and any of the our subsidiaries during each of the last three
financial years in respect of our Chief Executive Officer and our four most
highly compensated executive officers (the "Named Executive Officers").
Summary Compensation Table
====================================================================================================================================
Annual Compensation Long-Term Compensation Awards
----------------------------------------------------------------------------------------------
Awards Payouts
---------------------------------------- -------
Securities Under Restricted Shares LTIP All Other
Salary Bonus Compensation Options Granted Restricted Share Units Payouts Compensation
Name and Principal Position Year (US$) (US$) (US$) (#) (US$) (US$) (US$)
------------------------------------------------------------------------------------------------------------------------------------
Sidney H. Belzberg, 2001 278,557 nil nil nil nil nil nil
Chairman & Chief 2000 310,696 nil nil nil nil nil nil
Executive Officer 1999 315,816 nil nil 550,000 nil nil nil
------------------------------------------------------------------------------------------------------------------------------------
Alicia Belzberg, 2001 278,557 nil nil nil nil nil nil
Executive Vice President 2000 298,685 nil nil nil nil nil nil
1999 310,993 nil nil 550,000 nil nil nil
------------------------------------------------------------------------------------------------------------------------------------
Donald W. Wilson, 2001 329,557 nil nil nil nil nil nil
Chief Operating Officer 2000 247,685 nil nil nil nil nil nil
1999 234,471 nil nil 550,000 nil nil nil
------------------------------------------------------------------------------------------------------------------------------------
Lawrence J. Cyna, 2001 176,615 38,747 nil 50,000 nil nil nil
Chief Financial Officer 2000 168,919 nil nil 50,000 nil nil nil
1999 51,189 nil nil 250,000 nil nil nil
------------------------------------------------------------------------------------------------------------------------------------
Robert C. Sheehan, 2001 275,000 nil nil 100,000 nil nil nil
President of RCS and EBS 2000 33,333 nil nil 50,000 nil nil nil
====================================================================================================================================
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Directors
Directors who are not officers or our employees received cash
remuneration of $10,000 per annum and $1,000 per meeting attended in person and
$500 per meeting attended by telephone for services provided in their capacities
as directors. In addition, we reimburse directors for expenses incurred by them
in their capacity as directors for attending meetings.
The Corporation maintains directors' and officers' liability insurance
with a limit of US$10,000,000 per incident or a total of US$10,000,000 in each
policy year regardless of the number of claims. The annual cost of this
insurance coverage is US$97,000. There is no deductible with respect to claims
against insured persons for losses subject to corporate reimbursement.
Options Granted During Most Recent Financial Year
The following table sets out certain information relating to options
granted during the most recent financial year to the Named Executive Officers.
===================================================================================================================================
Market Value of
Securities Under % of Total Options Exercise Price Securities Underlying
Name Options Granted Granted to Employees Per Security Options on the Date of Expiration Date
(#) in Financial Year ($/Security) Grant ($/Security)
-----------------------------------------------------------------------------------------------------------------------------------
Lawrence J. Cyna, 50,000 4.32% $7.00 $7.00 April 9, 2008
Chief Financial Officer
-----------------------------------------------------------------------------------------------------------------------------------
Robert C. Sheehan, 100,000 8.64% $8.00 $8.00 March 31, 2006
President of RCS & EBS
===================================================================================================================================
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39
Aggregate Options Exercised During the Most Recently Completed Financial Year
and Financial Year-End Option Values
The following table sets out certain information relating to options
exercised by the Named Executive Officers during the most recent financial year
and the value of unexercised in-the-money options held by the Named Executive
Officers at the end of the most recent financial year:
=========================================================================================================================
Unexercised Options Value of Unexercised in-the-
at FY-End Money Options at FY-End
Securities December 31, 2001 December 31, 2001
Acquired on Aggregate ---------------------------------------------------------
Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) (US$) (#) (#) (US$) (US$)
-------------------------------------------------------------------------------------------------------------------------
Sidney H. Belzberg, nil nil 500,000 nil nil nil
Chairman and Chief
Executive Officer
-------------------------------------------------------------------------------------------------------------------------
Alicia Belzberg, nil nil 500,000 nil nil nil
Executive Vice President
-------------------------------------------------------------------------------------------------------------------------
Donald W. Wilson, nil nil 500,000 nil nil nil
Chief Operating Officer
-------------------------------------------------------------------------------------------------------------------------
Lawrence J. Cyna, nil nil 100,000 nil nil nil
Chief Financial Officer
-------------------------------------------------------------------------------------------------------------------------
Robert C. Sheehan, nil nil 150,000 nil nil nil
President of RCS & EBS
=========================================================================================================================
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Stock Option Plan
We have established a Stock Option Plan (the "Plan") for the purpose of
providing incentives to our directors, officers, employees and consultants. The
maximum number of common shares reserved for issuance under the Plan is limited
to 6,000,000 common shares. The board of directors may designate the recipient
of options and determine the number of common shares covered by each option, its
exercise price (which may not be less than closing market price of the common
shares on the trading day prior to the grant), its expiry date and any other
matters relating thereto. All options will be non-transferrable except in the
event of an optionee's death.
The issue of options under the Plan, together with any other stock
options issued by us, may not result, at any time, in the number of shares
reserved for issuance under stock options granted to any one person and the
person's associates exceeding 5% of the issued and outstanding common shares.
The following table sets out certain information with respect to
options to purchase common shares which were issued under the Stock Option Plan
and which were outstanding as at May 31, 2002:
=======================-========================================================================================
Market Value of
Number of Purchase Price Securities Under
Optionees Number of Securities of Securities Expiry Date Option on Date of
Optionees Under Option Under Option of Option Grant
----------------------------------------------------------------------------------------------------------------
<C>
All executive officers 3 300,000 $5.00 Aug 16, 2006 $5.00
and past-executive 3 1,200,000 $5.00 Sept 30, 2007 $5.00
officers of the 1 50,000 $10.00 Apr 9, 2007 $10.00
Corporation as a 1 50,000 $7.00 Apr 9, 2008 $7.00
group (4 individuals) 1 50,000 $5.05 Apr 6, 2009 $5.05
=======================-========================================================================================
40
=======================-========================================================================================
Market Value of
Number of Purchase Price Securities Under
Optionees Number of Securities of Securities Expiry Date Option on Date of
Optionees Under Option Under Option of Option Grant
----------------------------------------------------------------------------------------------------------------
<C>
All directors and 3 75,000 $3.50 Sept 25, 2006 $3.50
past-directors of the
Corporation who are 1 50,000 $5.00 Sept 30, 2007 $5.00
not executive 2 150,000 $16.75 Sept 14, 2005 $16.75
officers as a group
(4 individuals) 1 175,000 $5.00 Dec 31, 2002 $5.00
----------------------------------------------------------------------------------------------------------------
All employees of the 39 70,900 $4.70 Sept 30, 2006 $4.70
Corporation as a group 8 153,000 $8.00 Mar 31, 2006 $8.00
3 15,000 $4.50 Jan 15, 2007 $4.50
1 8,000 $8.00 Sept 30, 2006 $8.00
4 155,000 $3.00 Sept 30, 2007 $3.00
1 5,000 $10.00 June 4, 2006 $10.00
21 189,400 $5.00 Sept 30, 2007 $5.00
1 10,000 $7.00 July 18, 2007 $7.00
1 100,000 $5.00 Nov 30, 2007 $5.00
1 30,000 $8.00 Mar 22, 2006 $8.00
1 5,500 $5.00 May 31, 2006 $5.00
1 5,000 $3.70 Oct 15, 2006 $3.70
1 20,000 $4.48 Sept 30, 2007 $4.48
1 4,000 $5.50 Sept 5, 2006 $5.50
1 2,000 $18.00 Nov 15, 2005 $18.00
1 2,000 $7.60 Apr 24, 2007 $7.60
1 25,000 $7.60 July 27, 2005 $7.60
1 1,000 $3.00 July 31, 2007 $3.00
1 6,000 $4.11 May 16, 2007 $4.11
1 50,000 $5.00 Sept 15, 2002 $5.00
5 186,000 $3.00 Sept 30, 2006 $3.00
1 27,500 $8.50 July 28, 2005 $8.50
1 98,000 $7.50 Aug 18, 2007 $7.50
----------------------------------------------------------------------------------------------------------------
Consultants of the 1 125,000 $9.00 Aug 4, 2007 $9.00
Corporation as a group 1 125,000 $12.00 Aug 4, 2007 $12.00
1 125,000 $15.00 Aug 4, 2007 $15.00
1 200,000 $7.00 Apr 17, 2005 $7.00
1 75,000 $15.00 Nov 30, 2003 $15.00
1 30,000 $15.00 Jan 26, 2003 $15.00
1 20,000 $5.50 Mar 20, 2004 $5.20
1 20,000 $8.00 Mar 31, 2003 $8.00
1 125,000 $8.00 Aug 15, 2006 $8.00
1 250,000 $8.00 May 22, 2004 $8.00
================================================================================================================
41
Indebtedness of Directors and Senior Officers
As at May 31, 2002, the aggregate outstanding indebtedness to the
Company and it's subsidiaries by all of the current and former officers,
directors and employees, of the Company and its subsidiaries, which indebtedness
was incurred in connection with our securities or the securities of any of our
subsidiaries was $30,225.
As at May 31, 2002, the aggregate outstanding indebtedness to us and
any of our subsidiaries by all of our and our subsidiaries current and former
officers, directors and employees, which indebtedness was not incurred in
connection with a purchase of our securities, or any of our subsidiaries
securities, was 9,012.
Compensation of Directors. Our directors who are not officers or
employees receive cash compensation of $10,000 per annum and $1,000 per meeting
attended in person and $500 per meeting attended by telephone for services
provided in their capacities as directors. In addition, we reimburse directors
for expenses incurred by them in their capacity as directors for attending
meetings. We currently do not maintain directors and officers liability
insurance for our directors and officers.
Employees. As of May 31, 2002, we employed 130 full-time employees. Of
these, 25 were in administration, 11 in sales and marketing, 38 in technical and
customer support, 20 floor brokers and 36 in research and development. In
addition to our full-time employees, we also employ part-time personnel from
time to time in various departments. None of our employees are covered by a
collective bargaining agreement.
Employment Agreements
The Company and Sidney H. Belzberg are parties to an employment
agreement, dated as of August 15, 1996. Mr. Belzberg's employment is terminable
as follows:
o For cause
o By Mr. Belzberg upon written notice
o By the Company provided that twenty-four (24) months prior
written notice or payment in lieu of such notice is given.
The employment agreement provides for a base salary of Cdn.$144,000 per year,
which may be increased annually at the board of directors' sole discretion. In
addition, the board of directors at its discretion may also pay bonuses to Mr.
Belzberg from time to time. Mr. Belzberg is entitled to participate in any
benefit or stock option plan the Company may institute.
The employment agreement also prohibits competition with the Company
for a period of three (3) years after the termination of the agreement.
42
The Company and Alicia Belzberg are parties to an employment agreement,
dated as of August 15, 1996. Mrs. Belzberg's employment is terminable as
follows:
o For cause
o By Ms.Belzberg upon written notice
o By the Company provided that twenty-four (24) months prior
written notice or payment in lieu of such notice is given.
The employment agreement provides for a base salary of Cdn.$144,000 per year,
which may be increased annually at the board of directors' sole discretion. In
addition, the board of directors at its discretion may also pay bonuses to
Ms.Belzberg from time to time. Ms.Belzberg is entitled to participate in any
benefit or stock option plan the Company may institute.
The employment agreement also prohibits competition with the Company
for a period of three (3) years after the termination of the agreement.
The Company and Donald W. Wilson are parties to an employment
agreement, dated as of August 15, 1996. Mr. Wilson's employment is terminable as
follows:
o For cause
o By Mr. Wilson upon written notice
o By the Company provided that twenty-four (24) months prior
written notice or payment in lieu of such notice is given.
The employment agreement provides for a base salary of Cdn.$144,000 per year,
which may be increased annually at the board of directors' sole discretion. In
addition, the board of directors at its discretion may also pay bonuses to Mr.
Wilson from time to time. Mr. Wilson is entitled to participate in any benefit
or stock option plan the Company may institute.
The employment agreement also prohibits competition with the Company for a
period of three (3) years after the termination of the agreement.
The Company and Lawrence J. Cyna, C.A., are parties to an employment
agreement, dated as of April 6, 1999. Mr. Cyna's employment is terminable as
follows
o For cause
o By Mr. Cyna upon written notice
o By the Company provided that the initial contract of 36 months
(and thereafter 12 months) prior written notice or payment in
lieu of such notice is given.
The employment agreement provides for a base salary of Cdn.$250,000 per year,
which may be increased annually at the board of directors' sole discretion. In
addition, the board of directors at its discretion may also pay bonuses to Mr.
Cyna from time to time. Mr. Cyna is entitled to participate in any benefit or
stock option plan the Company may have, and is entitled to an additional 50,000
options for a five year period on each anniversary date of the signing of his
employment contract.
The Corporation and EBS have entered into an employment agreement with
Robert C. Sheehan under which he has agreed to be employed as a senior executive
of EBS. The agreement terminates on March 31, 2006.
Compensation of senior management. During the fiscal year ended
December 31, 1999, we paid our senior management Cdn.$1,441,043 in aggregate
cash compensation. We do not offer any retirement pension plan, nor have we
entered into any retirement compensation agreement for our directors and senior
management.
43
Share Ownership
For a description of share ownership in our company by each of our
directors and executive officers, see "Item 7--Major Shareholders and Related
Party Transactions."
For a description of options granted to our directors and executive
officers, see "Item 10--Additional Information--Options."
For a description of arrangements involving our employees in the
capital of Belzberg, see supra "Directors, Senior Management and
Employees--Stock Option Plan."
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