Attention Business Editors:
New SouthernEra Board Revises Compensation Policies
TORONTO, Aug. 14 /CNW/ - The Board of Directors of SouthernEra Resources
Limited announced today that it has revised the Company's compensation
policies for Directors and officers to align them more with the interests of
shareholders.
The Company has discontinued the practice of providing senior officers
with termination agreements paying up to 300% of annual salary in the event of
a change of control. "We believe that the effect of such arrangements is to
penalize shareholders for exercising their ownership rights," said Rudi Fronk,
a SouthernEra Director. "We are currently investigating whether a number of
such existing arrangements were properly authorized and intend to contest
their validity vigorously." Chris Jennings, the Company's Chairman, has
voluntarily agreed to surrender his termination agreement without
compensation.
In the Company's new policy, employment contracts will limit termination
pay to a maximum of one year. To receive the maximum, employees will need to
have at least one full year of service.
The practice of paying Directors to attend Board and Board Committee
meetings in addition to stock options has been discontinued. Directors will
receive only stock options as compensation for performance of their duties as
Directors. Directors who perform management-related duties may receive cash
compensation.
The terms of stock options granted to senior officers and Directors has
also been revised. No options will be granted with an exercise price below C$
1.50. One third of options will vest immediately; the remainder will vest upon
share price performance. "We believe that SouthernEra's key people should not
have options vest with time but rather with success in achieving enhanced
value for shareholders", said Mr. Fronk. Options will be limited to a five
year term, down from ten years previously.
Shareholders will not be asked to approve an additional allotment of
options beyond those previously approved. "With the cancellation and
expiration of existing options, no additional dilution should be necessary,"
said Mr. Fronk. At the annual meeting of shareholders held on June 6, 2000, a
motion to create additional options was opposed by new members of the Board of
Directors and defeated by shareholders.
Searches for a new CEO and COO are nearing completion and announcements
are expected shortly.
SouthernEra Resources Limited is a diamond mining and exploration company
and an emerging platinum group metals producer. The common shares of
SouthernEra are traded under the symbol SUF on the Toronto Stock Exchange.
%SEDAR: 00004535E
-0- 08/14/2000
For further information: PLEASE CONTACT: SouthernEra Resources Limited, Rudi P. Fronk, Director, Telephone: (416) 359-9282, Fax: (416) 359-9141, e-mail: inbox@southernera.com
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