Larry:
I believe some share holders like to address the issues contained in the Proxy Management Circular because they literally jump in your face. Not discussing those issues does not make them go away. I don't agree that openly addressing questionable transactions harms the company's reputation. The opposite may be the case, at least long term. After all, if loyal share holders don't ask hard questions, you can be sure somebody else will.
You may be correct that other major companies, like GM or Intel may reprice incentive stock options. I have no problem if the CEO of successful, profitable company makes a ton of money through sock options. However, there is a huge difference between Naxos and the companies you mentioned. While those companies actually earn a profit and even pay dividends, Naxos is a mining exploration company with share holder's money being the sole source of funds. In this respect, you are comparing apples and oranges, Larry.
You also suggested that all we can do about JJ's dealings if we disagree is vote against him at the ballot. Great, but here comes the catch: According to the ballot, in its present form, you can not vote against any candidate for director. The choices you have are: IN FAVOUR or ABSTAIN. Is that a typo?
SK suggested that we put together some ethics guidelines for the "new and better management". Here are my first random thoughts on this.
1. Clearly list all voting shares, warrants, stock options, etc. currently held by insiders and their family members.
2. Revoke all stock options held by those officers and directors who have exhibited a self-serving and manipulative behavior in the past.
3. Cancel the $733,107 director loan by July 24, 1998.
4. Undo the stock option repricing on the 380,000 shares.
5. Keep the trading halt for insiders in effect until all numbers from the current drill program are publicly known. Thereafter, limit the number of shares an insider can trade per year to a reasonable amount, e.g., 25% of his total holdings.
6. Limit the total annual number incentive stock options issued to anyone, including outside consultants, to no more than 0.75% of the total shares outstanding (which is still generous). This curb should be in effect at least until the company generates a profit. At the time the company does generate a per share profit, this percentage could be raised, but a reasonable upper limit should remain in effect as a general guideline for the number of incentive stock options to be disbursed.
7. Openly address conflicts of interest where company insiders, or their affiliated businesses, provide goods or services to the company for payment.
8. Limit the number of shares - all insiders combined - can purchase in private placement to no more than 10% of the total number of shares issued at any placement.
Anyone, feel free to comment and/or add to this list. Management should at least know how share holders feel about ethics. Maybe this will help them to not only build a profitable gold mine but also to establish an impeccable reputation. That is my expectation of the new management.
Kurt |
