--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
------------------------------------
ENTERRA ENERGY CORP.
(Name of Registrant as specified in its Charter)
--------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(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 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement 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:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ENTERRA ENERGY CORP.
NOTICE OF ANNUAL AND SPECIAL MEETING OF THE HOLDERS OF COMMON SHARES
TO BE HELD ON JUNE 7, 2002
NOTICE IS HEREBY GIVEN that the Annual and Special Meeting (the "Meeting") of
the shareholders of Enterra Energy Corp. ("Enterra" or the "Corporation") will
be held at The 400 Club, 710 - 4th Avenue S.W., Calgary, Alberta, on Friday,
June 7, 2002 at 10:00 a.m. local time, for the following purposes, namely:
1. to receive the financial statements for the year ended December 31, 2001
and the report of the auditors thereon;
2. to fix the number of directors to be elected at six;
3. to elect directors for the ensuing year;
4. to appoint the auditor for the ensuring year;
5. to consider and, if deemed appropriate, pass an ordinary resolution
approving an increase in the number of common shares of the Corporation
available for issuance pursuant to the Corporation's Stock Option Plan by
16,767 common shares; and
6. to transact such other business as may properly come before the Meeting or
any adjournment(s) thereof.
Only holders of record at the close of business on May 3, 2002 (the "Record
Date") of Common Shares are entitled to notice of and to attend the Meeting or
any adjournment or adjournments thereof and to vote thereat unless after the
Record Date a holder of record transfers his Common Shares and the transferee,
upon producing properly endorsed certificates evidencing such shares or
otherwise establishing that he or she owns such shares, requests, not later than
ten days before the Meeting, that the transferee's name be included in the list
of shareholders entitled to vote, in which case such transferee shall be
entitled to vote such shares at the Meeting.
Holders of Common Shares ("Shareholders") may vote in person at the Meeting or
any adjournment or adjournments thereof, or they may appoint another person (who
need not be a Shareholder) as their proxy to attend and vote in their place.
SHAREHOLDERS UNABLE TO BE PRESENT AT THE MEETING ARE REQUESTED TO DATE AND SIGN
THE ENCLOSED FORM OF PROXY AND RETURN IT TO THE CORPORATION'S AGENT, OLYMPIA
TRUST COMPANY, SUITE 2600, 700 - 9TH AVENUE S.W., CALGARY, ALBERTA, T2P 3V4 IN
THE ENCLOSED ENVELOPE PROVIDED FOR THAT PURPOSE. IN ORDER TO BE VALID, PROXIES
MUST BE RECEIVED BY OLYMPIA TRUST COMPANY NOT LATER THAN 4:00 P.M. (CALGARY
TIME) ON THE LAST BUSINESS DAY PRIOR TO THE MEETING OR ANY ADJOURNMENT THEREOF.
A management information circular relating to the business to be conducted at
the Meeting accompanies this Notice.
Calgary, Alberta BY ORDER OF THE BOARD OF DIRECTORS
April 26, 2002
(signed) Reginald Greenslade
President and Chief Financial Officer
ENTERRA ENERGY CORP.
SUITE 2600, 500 - 4TH AVENUE S.W.
CALGARY, ALBERTA T2P 2V6
MANAGEMENT INFORMATION CIRCULAR
FOR THE ANNUAL AND SPECIAL MEETING
OF THE HOLDERS OF COMMON SHARES
TO BE HELD ON JUNE 7, 2002
THIS MANAGEMENT INFORMATION CIRCULAR (THE "CIRCULAR") IS FURNISHED IN CONNECTION
WITH THE SOLICITATION OF PROXIES BY OR ON BEHALF OF THE MANAGEMENT OF ENTERRA
ENERGY CORP. (THE "CORPORATION" OR "ENTERRA") FOR USE AT THE ANNUAL AND SPECIAL
MEETING OF THE HOLDERS OF COMMON SHARES (THE "SHAREHOLDERS") OF THE CORPORATION
TO BE HELD AT THE 400 CLUB, 710 - 4TH AVENUE S.W. CALGARY, ALBERTA, ON FRIDAY,
JUNE 7, 2002 AT 10:00 A.M. LOCAL TIME, AND ANY ADJOURNMENT OR ADJOURNMENTS
THEREOF (THE "MEETING") FOR THE PURPOSES SET FORTH IN THE NOTICE OF ANNUAL AND
SPECIAL MEETING ACCOMPANYING THIS CIRCULAR.
SOLICITATION OF PROXIES
The solicitation of proxies is made on behalf of the management of the
Corporation. The costs incurred in the preparation of the Form of Proxy, Notice
of Annual and Special Meeting and this Circular will be borne by the
Corporation. Solicitation of proxies will be primarily by mail, but may also be
in person or by telephone. Unless otherwise noted, the information in this
Circular is given as at April 26, 2002.
RECORD DATE
The Shareholders of record of common shares ("COMMON SHARES") on May 3, 2002
(the "RECORD DATE") are entitled to notice of, and to vote at, the Meeting on
the basis of one vote for each Common Share held, except to the extent that:
1. such person transfers his shares after the Record Date;
2. the transferee of those shares produces properly endorsed share
certificates or otherwise establishes his ownership to the shares and makes
a demand to the Registrar and Transfer Agent of the Corporation, not later
than 10 days before the Meeting, that his name be included on the
shareholders' list for the Meeting.
Any registered Shareholder of the Corporation at the close of business on the
Record Date who either personally attends the Meeting or who completes and
delivers a proxy will be entitled to vote or have his or her Common Shares voted
at the Meeting. However, a person appointed under the Form of Proxy will be
entitled to vote the Common Shares represented by that form only if it is
effectively delivered in the manner set out under the heading "Appointment and
Revocation of Proxies".
APPOINTMENT AND REVOCATION OF PROXIES
The persons named as proxies in the enclosed Form of Proxy are the President and
the Chief Financial Officer of the Corporation.
-2-
A SHAREHOLDER SUBMITTING A PROXY HAS THE RIGHT TO APPOINT A PERSON TO REPRESENT
HIM OR HER AT THE MEETING OTHER THAN THE PERSON OR PERSONS DESIGNATED IN THE
FORM OF PROXY FURNISHED BY THE CORPORATION. TO EXERCISE THIS RIGHT THE
SHAREHOLDER SHOULD INSERT THE NAME OF THE DESIRED REPRESENTATIVE IN THE BLANK
SPACE PROVIDED IN THE FORM OF PROXY AND STRIKE OUT THE OTHER NAMES OR SUBMIT
ANOTHER APPROPRIATE PROXY.
In order to be effective, the proxy must be mailed so as to be deposited at the
office of the Corporation's agent, Olympia Trust Company, Suite 2600, 700 - 9th
Avenue S.W., Calgary, Alberta T2P 3V4, not later than 4:00 p.m., Calgary time on
Thursday, June 6, 2002. No instrument appointing a proxy shall be valid after
the expiration of twelve (12) months from the date of its execution. The
instrument appointing a proxy shall be in writing under the hand of the
Shareholder or his attorney, or, if such Shareholder is a corporation, under its
corporate seal, and executed by a director, officer or attorney thereof duly
authorized.
A Shareholder who has submitted a proxy may revoke it by instrument in writing
executed by the Shareholder or his attorney authorized in writing, or, if the
Shareholder is a corporation, under its corporate seal and executed by a
director, officer or attorney thereof duly authorized, and deposited either with
the Corporation at its offices as aforesaid at any time prior to the close of
business on 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
the Meeting prior to the commencement of the Meeting on the day of the Meeting,
and upon such deposit the previous proxy is revoked.
EXERCISE OF DISCRETION BY PROXIES
All Common Shares represented at the Meeting by properly executed proxies will
be voted, and where a choice with respect to any matter to be acted upon has
been specified in the Form of Proxy the Common Shares represented by the proxy
will be voted in accordance with such specification.
IN THE ABSENCE OF SUCH SPECIFICATION, SUCH COMMON SHARES WILL BE VOTED IN FAVOUR
OF ALL MATTERS PROPOSED BY MANAGEMENT TO BE ACTED UPON.
THE ENCLOSED INSTRUMENT OF PROXY CONFERS DISCRETIONARY AUTHORITY UPON THE
MANAGEMENT DESIGNEES, OR OTHER PERSONS NAMED AS PROXY, WITH RESPECT TO
AMENDMENTS TO OR VARIATIONS OF MATTERS IDENTIFIED IN THE NOTICE OF ANNUAL AND
SPECIAL MEETING AND ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE
MEETING. AT THE DATE OF THIS INFORMATION CIRCULAR, THE CORPORATION IS NOT AWARE
OF ANY AMENDMENTS TO, OR VARIATIONS OF, OR OTHER MATTERS WHICH MAY COME BEFORE
THE MEETING. IN THE EVENT THAT OTHER MATTERS COME BEFORE THE MEETING, THEN THE
MANAGEMENT DESIGNEES INTEND TO VOTE IN ACCORDANCE WITH THE JUDGMENT OF THE
MANAGEMENT OF THE CORPORATION.
VOTING COMMON SHARES AND PRINCIPAL HOLDERS THEREOF
The Corporation is authorized to issue an unlimited number of Common Shares,
without nominal or par value. As of April 26, 2002 there were 9,150,622 Common
Shares issued and outstanding.
The Bylaws of the Corporation provide that two (2) persons present and
representing in person or by proxy not less than ten percent (10%) of the issued
Common Shares entitled to vote constitute a quorum for the purposes of
conducting a shareholders' meeting.
-3-
To the best of the knowledge of the directors and officers of the Corporation no
person beneficially owns directly or indirectly, or exercises control or
discretion over more than 10% of the voting rights attached to voting securities
of the Corporation.
ADVICE TO BENEFICIAL HOLDERS OF SECURITIES
THE INFORMATION SET FORTH IN THIS SECTION IS OF SIGNIFICANT IMPORTANCE TO MANY
PUBLIC SHAREHOLDERS OF THE CORPORATION, AS A SUBSTANTIAL NUMBER OF THE PUBLIC
SHAREHOLDERS OF THE CORPORATION DO NOT HOLD COMMON SHARES IN THEIR OWN NAME.
Shareholders who do not hold their Common Shares in their own name (referred to
in this Circular as "Beneficial Shareholders") should note that only proxies
deposited by Shareholders whose names appear on the records of the Corporation
as the registered holders of Common Shares can be recognized and acted upon 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 Shareholder's name on the records of the Corporation. Such
Common Shares will more likely be registered under the name of the Shareholder's
broker or an agent of that broker. In Canada, the vast majority of such shares
are registered under the name of CDS & Co. (the registration name for The
Canadian Depository for Securities, which acts as nominee for many Canadian
brokerage firms). 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 shares for their clients. The directors and officers of the Corporation
do not know for whose benefit the shares registered in the name of CDS & Co. are
held. THEREFORE, BENEFICIAL SHAREHOLDERS SHOULD ENSURE THAT INSTRUCTIONS
RESPECTING THE VOTING OF THEIR COMMON SHARES ARE COMMUNICATED TO THE APPROPRIATE
PERSON.
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 procedures and provides its own
return instructions, which should be carefully followed by Beneficial
Shareholders in order to ensure that their Common Shares are voted at the
Meeting. Often, the form of proxy supplied to a Beneficial Shareholder by its
broker is identical to the form of proxy 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 the
Independent Investor Communications Corporation ("IICC"). IICC typically applies
a special sticker to the proxy forms, mails those forms to the Beneficial
Shareholders and asks Beneficial Shareholders to return the proxy forms to IICC.
IICC 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
IICC sticker on it cannot use that proxy to vote Common Shares directly at the
Meeting. The proxy must be returned to IICC well in advance of the Meeting in
order to have the Common Shares voted at the Meeting.
Although a Beneficial Shareholder may not be recognized directly at the Meeting
for the purposes of voting Common Shares registered in the name of his or her
broker (or an agent of the broker), a Beneficial Shareholder may attend the
Meeting as proxyholder for the registered shareholder and vote the Common Shares
in that capacity. Beneficial Shareholders who wish to attend the Meeting and
indirectly vote their Common Shares as proxyholder for the registered
shareholder, should enter their own names in the blank space on the form of
proxy provided to them and return the same to their broker (or the broker's
agent) in accordance with the instructions provided by such broker (or agent),
well in advance of the Meeting.
-4-
In addition, a proxy may be revoked by the shareholder executing another form of
proxy bearing a later date and depositing same at the offices of the Registrar
and Transfer Agent of the Corporation within the time period set out under the
heading "Appointment and Revocation of Proxies", or by the shareholder
personally attending the Meeting and voting his or her Common Shares.
SUMMARY OF MATTERS TO BE ACTED UPON
The Shareholders of the Corporation will be asked to consider and, if deemed
appropriate:
(a) by ordinary resolution, elect the directors of the Corporation; and
(b) by ordinary resolution, approve the appointment of KPMG LLP ("KPMG")
as the auditors of the Corporation; and
(c) by ordinary resolution, approve an increase in the number of common
shares of the Corporation available for issuance pursuant to the
Corporation's Stock Option Plan by 16,767 Common Shares.
Additional detail regarding each of the matters to be acted on at the Meeting is
contained below.
ELECTION OF DIRECTORS
Action is to be taken at the Meeting with respect to the election of directors.
As at the date hereof, the Board of Directors of the Corporation is comprised of
five (5) members. It is proposed that the Board consist of six (6) members. The
Shareholders will be asked to pass an ordinary resolution at the Meeting to
elect, as directors, the nominees whose names are set forth in the table below.
Each nominee elected will hold office until the next annual meeting of the
Shareholders, or until his successor is duly elected or appointed, unless his
office is vacated earlier in accordance with the Corporation's Bylaws. The
Corporation is required by applicable corporate legislation to have an Audit
Committee comprised of members of the Board of Directors. The Corporation does
not have an executive committee. The present members of the Audit Committee,
Compensation Committee, Corporate Governance Committee and Reserves Committee of
the Board of Directors are identified in the table below.
The following information relating to the nominees as directors is based partly
on the records of the Corporation and partly on information received by the
Corporation from said nominees, and sets forth the name and municipality of
residence of the persons proposed to be nominated for election as directors, all
other positions and offices within the Corporation now held by them, their
principal occupations or employments, the periods during which they have served
as directors of the Corporation and the approximate number of Common Shares
beneficially owned, directly or indirectly, or over which control or direction
is exercised by each of them as at April 26, 2002.
Common Shares Beneficially
Name and Municipality of Position(s) Presently Owned or Controlled as at
Residence Held Principal Occupation Director Since April 26, 2002
------------------------------- ---------------------- -------------------------- ---------------- --------------------------
Reginald J. Greenslade Director, President President and CEO of the August, 2001 178,703
Calgary, Alberta and CEO(1)(4) Corporation
Thomas J. Jacobsen Director and President of Wells Gray February, 1999 322,947
Calgary, Alberta COO(1)(3)(4) Resort and Resources
Walter A. Dawson Director(3)(4) Chairman and CEO of Simmons August, 2001 404,896
Calgary, Alberta Energy Services Inc.
H.S. (Scobey) Hartley Director(1)(2)(3) Chairman of Prism Petroleum May, 2000 1,000
Calgary, Alberta Ltd.
-5-
Common Shares Beneficially
Name and Municipality of Position(s) Presently Owned or Controlled as at
Residence Held Principal Occupation Director Since April 26, 2002
------------------------------- ---------------------- -------------------------- ---------------- --------------------------
G.W. Douglas Paul None Vice President, Canada West Proposed nil
Calgary, Alberta Corporate Finance Inc.
Norman K. Wallace None Founder and owner, Wallace Proposed 5,000
Calgary, Alberta Construction Specialties
Ltd.
Notes:
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Corporate Governance Committee.
(4) Member of the Reserves Committee.
THE PERSONS IN THE ENCLOSED FORM OF PROXY, UNLESS INSTRUCTED OTHERWISE, INTEND
TO VOTE FOR THE ELECTION, AS DIRECTORS, OF THE NOMINEES WHOSE NAMES ARE SET
FORTH IN THE TABLE ABOVE.
APPOINTMENT OF AUDITORS
The Shareholders will be asked to pass an ordinary resolution at the Meeting to
reappoint KPMG as auditors of the Corporation, to hold office until the next
annual meeting of the Shareholders, at a remuneration to be determined by the
Board of Directors. KPMG has acted as auditors of the Corporation since February
16, 2001. THE PERSONS IN THE ENCLOSED FORM OF PROXY, UNLESS INSTRUCTED
OTHERWISE, INTEND TO VOTE FOR THE REAPPOINTMENT OF KPMG AS AUDITORS OF THE
CORPORATION.
The Corporation has employed the firm of KPMG to audit its financial statements
and to provide audit-related and other services. KPMG representatives meet with
the Audit Committee of the Board of Directors prior to the release of annual
financial statements. The Corporation paid a total of Cdn. $193,460 in fees to
KPMG during 2001. These fees were for the annual audit ($60,500), review of
securities documents ($33,700), other audit-related services ($50,500) and
tax-related services ($48,760).
AMENDMENT TO STOCK OPTION PLAN
At the Meeting, the Shareholders will be asked to consider and, if deemed
advisable, approve an amendment to the Corporation's stock option plan (the
"STOCK OPTION PLAN") which authorizes the Board of Directors to issue stock
options to directors, officers and key employees of, and consultants to, the
Corporation who are in a position to contribute to the future success and growth
of the Corporation. The Stock Option Plan was approved by the Shareholders on
December 10, 2001. At the Special Meeting of the Corporation held on December
10, 2001, the Shareholders of the Corporation approved the number of Common
Shares reserved for issuance under the Stock Option Plan at 916,062 Common
Shares.
Since December 10, 2001, an aggregate of 17,767 Common Shares have been issued
upon the exercise of stock options, leaving 898,295 Common Shares currently
available for issue under the Stock Option Plan. As at the date of this
Circular, there are stock options outstanding to purchase an aggregate of
673,447 Common Shares. As a result, the Stock Option Plan currently has a
balance of 224,848 Common Shares available for new option grants.
- 6 -
As a result of the cancellation of previously issued stock options, the proposed
addition of new directors and the potential hiring of new employees, the Board
wishes to increase the number of Common Shares reserved for issuance under the
Stock Option Plan by 16,767 Common Shares. This increase, if approved by the
Shareholders, will result in a total of 915,062 Common Shares being available
for grant under the Stock Option Plan. The following table summarizes the
transactions in the Stock Option Plan since May 10, 2001.
STOCK OPTIONS STOCK OPTION AVAILABLE FOR
OUTSTANDING PLAN MAXIMUM FUTURE GRANT
------------ ------------ -------------
December 10, 2001 800,000 916,062 116,062
Options cancelled (108,786) 108,786
Options granted nil
Options exercised (17,767) (17,767)
-------- ------- -------
April 26, 2002 673,447 898,295 224,848
Proposed Additions 16,767 16,767
-------- ------- -------
Reconstituted Plan as at May 15, 2002 673,447 915,062 241,615
-------- ------- -------
THE BOARD CONFIRMS THAT IN ACCORDANCE WITH THE PROVISIONS OF THE STOCK OPTION
PLAN PREVIOUSLY APPROVED BY THE SHAREHOLDERS, AT NO TIME WILL THE NUMBER OF
COMMON SHARES RESERVED FOR ISSUANCE PURSUANT TO OUTSTANDING STOCK OPTIONS EXCEED
10% OF THE TOTAL ISSUED AND OUTSTANDING COMMON SHARES OF THE CORPORATION.
At the Meeting, the Shareholders will be asked to consider and, if deemed
advisable, to approve the following resolution to amend the Stock Option Plan:
"BE IT RESOLVED, as an ordinary resolution of the Shareholders of
Enterra Energy Corp. (the "Corporation"), that an amendment of the
Stock Option Plan of the Corporation to increase the maximum number of
Common Shares which may be issued thereunder by 16,767 Common Shares be
and the same is hereby approved and authorized."
In order for the foregoing resolution to be passed, it must be approved by a
simple majority of the votes cast by Shareholders who vote in person or by proxy
at the Meeting. A copy of the Stock Option Plan (as amended) will be made
available to any Shareholder upon request. The persons named in the enclosed
proxy form, if named as proxy, intend to vote for the approval of the amendment
to the Stock Option Plan.
OTHER MATTERS COMING BEFORE THE MEETING
Management knows of no other matters to come before the Meeting other than
referred to in the Notice of Meeting. Should any other matters properly come
before the Meeting, the Common Shares represented by proxy solicited hereby will
be voted on such matters in accordance with the best judgement of the person
voting such proxy.
- 7 -
EXECUTIVE COMPENSATION
SUMMARY OF EXECUTIVE COMPENSATION
The following table provides a summary of compensation earned during the last
fiscal year ended December 31, 2001 by the Corporation's Chief Executive Officer
and for the next most highly compensated executive officer of the Corporation
other than the Chief Executive Officer (the "NAMED EXECUTIVE OFFICERS"). Except
as disclosed below, no executive officer or employee of the Corporation received
in excess of Cdn. $100,000 per annum by way of salary and bonuses during any of
the three fiscal year periods ended December 31, 2001.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------- ----------------------------------
AWARDS PAYOUTS
------------------------ -------
RESTRICTED
SECURITIES SHARES OR
UNDER RESTRICTED
OTHER ANNUAL OPTIONS/ SHARE LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION SARS GRANTED UNITS PAYOUTS COMPENSATION
POSITION YEAR CDN. ($) CDN. ($) CDN. ($) (#) CDN. ($) CDN. ($) CDN. ($)
---------------------- ---- -------- --------- ------------ ------------ ---------- -------- ------------
Reginald J. Greenslade 2001 157,500 - 12,279 144,000 - - -
President and Chief
Executive Officer
Trevor R. Spagrud 2001 131,250 - 10,195 100,000 - - -
Vice-President,
Operations
Notes:
(1) Reginald Greenslade and Trevor Spagrud were appointed to their
positions as President and Chief Executive Officer and Vice-President,
Operations of the Corporation, respectively, in August, 2001.
STOCK OPTIONS
Pursuant to the Corporation's stock option plan (the "PLAN"), options to
purchase Common Shares are granted by the Board to directors, officers,
employees and consultants of the Corporation at an exercise price fixed by the
directors, subject to the limitations of any stock exchange on which the Common
Shares are listed. Stock options must be exercised within a period of ten years
from the date of the granting of the stock options and vest as determined by the
Board. The Options are non-assignable and non-transferable.
The maximum number of stock options that may be reserved for any one optionee
under the Plan must be no greater than 5% of the issued and outstanding Common
Shares (on a non-diluted basis). Furthermore, the aggregate number of Common
Shares reserved for issuance pursuant to stock options granted to "insiders" (as
defined by the TSE Company Manual) may not exceed 10% of the outstanding Common
Shares (on a non-diluted basis), the issuance of Common Shares to "insiders"
pursuant to the Plan and other share compensation arrangements within a one year
period may not exceed 10% of the outstanding Common Shares (on a non-diluted
basis) and the issuance of Common Shares to any one "insider" and such insider's
associates pursuant to the Plan and other share compensation arrangements within
a one year period may not exceed 5% of the outstanding Common Shares (on a
non-diluted basis). The aforementioned limits of Common Shares reserved for
issuance may be formulated on a diluted basis with the consent of the TSE.
- 8 -
Option Grants During the Year Ended December 31, 2001
The following table sets forth individual grants of stock options made to the
named executive officers during the fiscal period ended December 31, 2001. The
Corporation has no plan for any of its employees involving stock appreciation
rights.
EXERCISE OR MARKET VALUE OF
SECURITIES UNDER % OF TOTAL OPTIONS BASE PRICE SECURITIES UNDERLYING
OPTIONS GRANTED GRANTED IN (CDN. OPTIONS ON THE DATE OF
NAME (#) FINANCIAL YEAR $/SHARE) GRANT (CDN. $/SHARE) EXPIRATION DATE
---------------------- ---------------- ------------------ ----------- ---------------------- ----------------
Reginald J. Greenslade 144,000(1) 18% $4.00 $2.70 November 1, 2006
Trevor Spagrud 100,000(1) 12.5% $4.00 $2.70 November 1, 2006
Notes:
(1) As at November 5, 2001 the Corporation had issued options to acquire an
aggregate of 630,491 Common Shares. At a Special Meeting of the
Shareholders of the Corporation held on December 10, 2001, the
Shareholders approved the cancellation of options to acquire 630,491
Common Shares and approved the issuance of new options to acquire an
aggregate of 800,000 Common Shares of the Corporation, granted to such
individuals, and for such amounts and exercise prices as described in
Appendix D to the Information Circular of the Corporation dated
November 5, 2001.
Option Exercises and Year-End Option Values
The following table provides information concerning (i) options exercised by any
named executive officer during the financial year ended December 31, 2001; and
(ii) the number and the value at December 31, 2001 of unexercised options held
by the named executive officers. In the table, "exercisable" options are those
for which the vesting period or conditions, if any, have been met, and "in the
money" options are those where the exercise price was less than the market price
of the Common Shares of the Corporation at the close of business on December 31,
2001.
VALUE OF UNEXERCISED
OPTIONS EXERCISED UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS(1)
---------------------------- --------------------------- ----------------------------
SECURITIES AGGREGATE NOT CDN. ($) CDN. ($) NOT
NAME ACQUIRED VALUE (CDN. $) EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
---------------------- ---------- -------------- ----------- ----------- ----------- ------------
Reginald J. Greenslade Nil $Nil 144,000 Nil $Nil $Nil
Trevor R. Spagrud Nil $Nil 100,000 Nil $Nil $Nil
Notes:
(1) The closing price for the Corporation's Common Shares on the CDNX on
the last trading day in December, 2001 was Cdn. $3.00.
RETIREMENT PLANS
The Corporation has no retirement plans, pension plans or other forms of
retirement compensation for its employees.
STOCK SAVINGS PLAN
On August 31, 2001, the board of directors approved the adoption of a stock
savings plan for the Corporation. The purpose of the stock savings plan is to
provide employees of the Corporation with the opportunity to participate in the
ownership and growth of the Corporation through the purchase of Common Shares on
the CDNX. A participant's contributions are based on a percentage of their
annual salary up to a maximum of 7%. The Corporation matches any participant's
contributions equally. As at November 5, 2001, approximately 83% of the
Corporation's employees had participated in the stock savings plan.
- 9 -
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
The Corporation has employment contracts with Reginald Greenslade and Trevor
Spagrud which provide that the named executive officer will be paid a severance
payment if: (a) the named executive officer's employment is terminated; or (b) a
change of control occurs in the Corporation and the named executive officer does
not continue to be employed by the Corporation at a level of responsibility or a
level of base salary and compensation at least commensurate with the named
executive officer's level of responsibility, base salary and compensation
immediately prior to the change of control and the named executive officer
elects to terminate his employment within twelve (12) months of the change of
control. The severance payment is based upon the named executive officer's
monthly salary. Mr. Greenslade and Mr. Spagrud are entitled up to a maximum of
30 months and 24 months severance payment, respectively. Additionally, both Mr.
Greenslade and Mr. Spagrud are entitled to additional allocation of benefits for
past bonus amounts paid to each of them.
COMPENSATION OF DIRECTORS
Directors receive an annual retainer of Cdn. $7,500. In addition, directors
receive fees in the amount of Cdn. $750 for each directors' meeting which they
personally attend and Cdn. $250 for each conference call which they participate
in which exceeds 1 hour in duration. Directors are also entitled to be
compensated for their out-of-pocket costs, including travel and accommodation,
relating to their attendance at any directors' meeting. Finally, the directors
are entitled to participate in the Corporation's stock option plan. During the
year ended December 31, 2001, options to acquire a total of 240,000 common
shares were granted to the current directors of the Corporation (not including
options granted to a director who is also a named executive officer). Except as
described herein, no compensation by way of annual retainer or meeting fees was
paid to directors for acting in such capacity in the year ended December 31,
2001.
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
Effective October 25, 2001, the Corporation has put in place a corporate
liability insurance policy for its directors and officers through London
Guarantee Insurance Company. The coverage is for Cdn. $1,000,000 and provides
coverage to October 1, 2002. The annual premium for the policy was Cdn. $5,390.
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS
As at the date of this Information Circular, there exists no indebtedness of any
of the directors or executive officers to the Corporation.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
None of the Corporation's directors or executive officers, nor any person who
beneficially owns directly or indirectly or exercises control or direction over
securities carrying more than 10% of the voting rights attaching to the Common
Shares, nor any known associate or affiliate of these persons had any material
interest, direct or indirect in any transaction since the commencement of the
Corporation's last completed financial year which has materially affected the
Corporation, or in any proposed transaction which has materially affected or
would materially affect the Corporation or any of its subsidiaries.
- 10 -
INTERESTS OF CERTAIN PERSONS AND COMPANIES IN MATTERS TO BE ACTED UPON
Management of the Corporation is not aware of any material interest of any
director or nominee for director, or senior officer or any one who has held
office as such since the beginning of the Corporation's last financial year or
of any associate or affiliate of any of the foregoing in any matter to be acted
on at the Meeting.
AVAILABILITY OF CERTAIN DOCUMENTS
Under National Policy 41, adopted by the Canadian Securities Administrators, a
person or company who wishes to receive interim financial statements from the
Corporation must deliver a written request for such material to the Corporation,
together with a signed statement that the person or company is the owner of
securities (other than debt instruments) of the Corporation. Shareholders who
wish to receive interim financial statements are encouraged to send the enclosed
return card, together with the completed Form of Proxy, in the addressed
envelope provided to the Corporation's agent, Olympia Trust Company, Suite 2600,
700 - 9th Avenue S.W., Calgary, Alberta T2P 3V4. The Corporation will maintain a
supplemental mailing list of persons and companies wishing to receive interim
financial statements.
DIRECTORS' APPROVAL
The contents and the sending of this Circular have been approved by the Board.
CERTIFICATE
The foregoing contains no untrue statement of a material fact and does not omit
to state a material fact that is required to be stated or that is necessary to
make a statement not misleading in the light of the circumstances in which it
was made.
signed "Reginald Greenslade" signed "Luc Chartrand"
Reginald Greenslade Luc Chartrand
President and Chief Executive Officer Chief Financial Officer
Calgary, Alberta
April 26, 2002
ENTERRA ENERGY CORP.
FORM OF PROXY
THIS FORM OF PROXY IS SOLICITED BY MANAGEMENT
AND WILL BE USED AT THE ANNUAL AND SPECIAL MEETING OF THE SHAREHOLDERS
TO BE HELD ON JUNE 7, 2002.
The undersigned holder of Common Shares in the capital of Enterra Energy Corp.
(the "Corporation"), hereby appoints Reginald Greenslade, President and Chief
Executive Officer of the Corporation, of Calgary, Alberta, or failing him, Luc
Chartrand, Chief Financial Officer of the Corporation, of Calgary, Alberta, or
instead of either of them, ______________________________________________ , as
proxyholder of the undersigned, with full power of substitution, to attend, vote
and act for and on behalf of the undersigned at the Annual and Special Meeting
(the "Meeting") of holders of common shares of the Corporation to be held at The
400 Club, 710 - 4th Avenue S.W., Calgary Alberta, on Friday, June 7, 2002 at
10:00 a.m. local time, and at any adjournments thereof, and on every ballot that
may take place in consequence thereof to the same extent and with the same
powers as if the undersigned were personally present at the Meeting, with
authority to vote at the proxyholder's discretion except as otherwise specified
below.
Without limiting the general powers hereby conferred, the undersigned hereby
directs the proxyholder to vote the common shares represented by this Form of
Proxy in the following manner:
1. To fix the number of directors to be elected ) [ ] FOR
at the Meeting at six. )
) [ ] AGAINST
)
)
2. Electing the nominees specified in the ) [ ] FOR
management information circular of the )
Corporation as directors for the ensuing ) [ ] WITHHOLD FROM VOTING
year. )
)
)
3. Appointing KPMG LLP as the auditor of the ) [ ] FOR
Corporation for the ensuing year at a )
remuneration to be fixed by the directors. ) [ ] WITHHOLD FROM VOTING
)
)
4. Passing an ordinary resolution approving an ) [ ] FOR
increase in the number of common shares of )
the Corporation available for issuance ) [ ] WITHHOLD FROM VOTING
pursuant to the Corporation's Stock Option )
Plan by 16,767 common shares. )
5. On any business which may properly come before the Annual Meeting, or any
adjournment(s) thereof, the proxy is authorized to act or vote as he or she
in his or her discretion may advise.
THIS PROXY IS SOLICITED ON BEHALF OF THE MANAGEMENT OF THE CORPORATION. THE
COMMON SHARES REPRESENTED BY THIS FORM OF PROXY WILL BE VOTED, WHERE THE
SHAREHOLDER HAS INDICATED HIS OR HER CHOICE ABOVE, AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, FOR THE ABOVE PROPOSAL. THE PERSON OR PERSONS APPOINTED
UNDER THIS FORM OF PROXY ARE CONFERRED WITH DISCRETIONARY AUTHORITY WITH RESPECT
TO AMENDMENTS OR VARIATIONS OF THOSE MATTERS SPECIFIED IN THIS FORM OF PROXY AND
THE NOTICE OF MEETING AND WITH RESPECT TO ANY OTHER MATTERS WHICH MAY BE
PROPERLY BROUGHT BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. THIS FORM OF
PROXY SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTICE OF MEETING AND
INFORMATION CIRCULAR.
THE UNDERSIGNED HEREBY REVOKES ANY PRIOR PROXIES.
DATED , 2002
------------------------------------------
(IF UNDATED, THIS PROXY WILL BE CONSIDERED TO BEAR THE
DATE ON WHICH IT WAS MAILED TO THE SHAREHOLDER)
SIGNATURE
------------------------------------------------------
(PLEASE SIGN, DATE AND MAIL PROMPTLY IN THE ENCLOSED
ENVELOPE - THE SIGNATURE ON THIS LINE SHOULD CORRESPOND
EXACTLY WITH THE NAME IN WHICH THE COMMON SHARES WHICH
ARE THE SUBJECT OF THIS PROXY ARE REGISTERED. SEE THE
NOTES HERETO.)
-2-
NOTES:
1. THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY ARE DIRECTORS AND OFFICERS
OF THE CORPORATION. A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON (WHO
NEED NOT BE A SHAREHOLDER OF THE CORPORATION) OTHER THAN THE PERSONS
DESIGNATED IN THE FORM OF PROXY TO REPRESENT THE SHAREHOLDER AT THE
MEETING. TO EXERCISE THIS RIGHT, THE SHAREHOLDER SHOULD INSERT THE NAME OF
THE DESIRED REPRESENTATIVE IN THE BLANK SPACE PROVIDED IN THIS FORM OF
PROXY OR SUBMIT ANOTHER PROPER FORM OF PROXY.
2. In order to be effective, this Form of Proxy must be signed and forwarded
so as to reach, or be deposited with, the Corporation's agent, Olympia
Trust Company, Suite 2600, 700 - 9th Avenue S.W., Calgary, Alberta T2P 3V4,
not later than 4:00 p.m. (Calgary time) on the last business day prior to
the Meeting or any adjournment thereof.
3. The proxy shall be in writing and executed by the shareholder (using
exactly the same name in which the common shares are registered) or such
shareholder's attorney authorized in writing, or if such shareholder is a
corporation, under its corporate seal or by a duly authorized officer or
attorney. A COPY OF ANY SUCH AUTHORIZATION SHOULD ACCOMPANY THIS FORM OF
PROXY. PERSONS SIGNING AS EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD
SO INDICATE.