SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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
MERCER INTERNATIONAL INC.
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(Names of Registrant as Specified in Its Charter)
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(Names of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (check appropriate box):
/X/ No filing fee.
/ / Fee computed on table below per Exchange Act rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computes pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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MERCER INTERNATIONAL INC.
Giesshubelstrasse 15
8045 Zurich
Switzerland
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
Mercer International Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of Mercer
International Inc., a Massachusetts trust organized under the laws of the State
of Washington (the "Company"), will be held at HauptstraBe 16, D 07365
Blankenstein, Germany at 9:00 a.m., Central Europe Time, July 10, 2001, for the
following purposes:
1. To elect two (2) Trustees of the Company.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Trustees have fixed the close of business on May 21, 2001, as the record
date for the determination of Shareholders entitled to notice of and to vote at
the Annual Meeting.
By Order of the Trustees
JIMMY S.H. LEE
President
June - , 2001
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO COMPLETE,
SIGN, DATE AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE. INSTRUCTIONS FOR THE
PROPER EXECUTION OF PROXIES ARE SET FORTH IN THE PROXY STATEMENT.
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MERCER INTERNATIONAL INC.
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the
management of Mercer International Inc. (the "Company") of proxies for use at
the Annual Meeting of Shareholders to be held at HauptstraBe 16, D 07365
Blankenstein, Germany on July 10, 2001, and any adjournments thereof. If the
Proxy is properly executed and received by the Company prior to the meeting or
any adjournment thereof, the Shares represented by your Proxy will be voted in
the manner directed. In the absence of voting instructions, the shares will be
voted for each of the proposals. The Proxy may be revoked at any time prior to
its use by filing a written notice of revocation of Proxy or a later dated Proxy
with the Secretary of the Company, Mr. Ian Rigg, c/o Suite 1620, 400 Burrard
Street, Vancouver, British Columbia, Canada V6C 3A6, bearing a date later than
the date of the Proxy or by giving oral notice of revocation at the meeting. You
may also revoke your Proxy in person at the meeting. If you attend the meeting
and have submitted a Proxy, you need not revoke your Proxy and vote in person
unless you elect to do so. The Proxy Statement and form of Proxy are being
mailed to Shareholders commencing on or about June - , 2001.
The affirmative vote of at least a majority of the shares of beneficial
interest ("Shares") cast in person or by proxy at the Annual Meeting is required
to approve the election of Trustees. The holders of one-third of the outstanding
Shares and entitled to vote at the Annual Meeting, present in person or
represented by proxy, constitute a quorum. Under applicable Washington law,
abstentions and broker non-votes will be counted for purposes of establishing a
quorum, but will have no effect on the vote on the election of the Trustee.
Proxies will be solicited primarily by mail and may also be solicited
personally and by telephone by Trustees and regular employees of the Company
without additional remuneration therefor. The Company may also reimburse banks,
brokers, custodians, nominees and fiduciaries for their reasonable charges and
expenses in forwarding Proxies and Proxy materials to the beneficial owners of
the Shares. All costs of solicitation of Proxies will be borne by the Company.
The Company does not presently intend to employ any other party to assist in the
solicitation process.
The close of business on May 21, 2001, has been fixed as the record date
(the "Record Date") for the determination of Shareholders entitled to notice of
and to vote at the Annual Meeting.
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VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The holders of record of 16,794,899 Shares of the Company issued and
outstanding on the Record Date will be entitled to one vote per Share at the
meeting. Under the Company's Declaration of Trust, cumulative voting in the
election of Trustees is not permitted. Trustees will be elected by the majority
of votes cast at the meeting.
The following table sets forth certain information regarding the beneficial
ownership of the Company's Shares as of April 23, 2000, by each shareholder who
is known by the Company to own more than five percent of the outstanding Shares.
The following is based solely on statements on filings with the Securities and
Exchange Commission or other information the Company believes to be reliable.
NUMBER PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES OUTSTANDING SHARES
------------------------------------ --------- ------------------
FMR Corp.(1)................................................ 1,142,513 6.8%
82 Devonshire Street
Boston, MA 02109
Schneider Capital Management Corporation.................... 1,337,900 8.0%
460 E. Swedesford Street
Suite 1080
Wayne, PA 19087
Merril Lynch & Co., Inc..................................... 1,423,885 8.6%
4 World Financial Center
New York, NY 10080
Greenlight Capital, L.L.C................................... 2,202,200 13.1%
420 Lexington Ave.
Suite 875
New York, NY 10170
Cramer Rosenthal McGlynn.................................... 1,912,282 11.4%
------------------------
(1) Filed jointly with Edward C. Johnson 3d and Abigail P. Johnson.
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PROPOSAL 1
ELECTION OF TRUSTEES
Pursuant to resolutions of the Trustees under authority granted by the
Company's Declaration of Trust, the number of Trustees of the Company is
established at five. The votes of a majority of the Shares cast in person or by
Proxy at the Annual Meeting are required to elect the Trustees.
The Board of Trustees is divided into three classes. Each class of Trustee
is elected for a three-year term. The nominees for Trustee, Mr. C.S. Moon and
Mr. Maarten Reidel, are members of Class I, and are to be elected to the Board
of Trustees for a three-year term to serve until the annual meeting of
shareholders in 2004, or until their successors are elected and qualified. Both
Mr. Moon and Mr. Reidel currently serve as a Trustee.
Mr. Moon and Mr. Reidel have indicated that they are willing and able to
serve as a Trustee. If either nominee is unable or unwilling to serve, the
accompanying proxy may be voted for the election of such other person as shall
be designated by the Trustees. Proxies received by the Trustees on which no
designation is made will be voted FOR the nominees.
TRUSTEES
The following table sets forth information regarding each nominee for
election as a Trustee and each Trustee whose term of office will continue after
the Annual Meeting.
EXPIRATION OF
NAME CURRENT POSITION WITH THE COMPANY AGE TERM AS A TRUSTEE
---- --------------------------------- -------- -----------------
Jimmy S.H. Lee............................... Chairman, President and Trustee 44 2002
C.S. Moon.................................... Trustee 54 2001
Maarten Reidel............................... Trustee 37 2001
Michel Arnulphy.............................. Trustee 67 2003
R. Ian Rigg.................................. Secretary and Chief Financial 57 2002
Officer and Trustee
JIMMY S.H. LEE has been a Trustee since May, 1985, and Chief Executive
Officer of the Company since 1992. Mr. Lee is a director of Med Net
International Ltd.
C.S. MOON has been a Trustee since June 1994. Mr. Moon is an independent
consultant. From 1990 until 1998, he was Executive Director of Shin Ho Group of
Korea, an international paper manufacturer headquartered in Korea. Prior to
joining Shin Ho in 1990, Mr. Moon previously served in managerial positions with
Moo Kim Paper Manufacturing Co., Ltd. and Sam Yung Pulp Co., Ltd., both
in Korea.
MAARTEN REIDEL has been a Trustee since December 1996, a Managing Director
of Spezialpapierfabrik Blankenstein GmbH ("SBG") from 1994 to 1999 and the
Chairman of the Management Board of Dresden Papier AG ("DPAG") from 1995 to
1998, a member of the German government agency responsible for the privatization
of government-owned companies from 1992 to 1994, and an accountant with Arthur
Andersen & Co. from 1987 to 1992. He has been the Chief Financial Officer of
Ision Internet AG since August 1999.
MICHEL ARNULPHY has been a Trustee since June 1995. From 1998 to the
present, Mr. Arnulphy has been the Managing Director of Electro Orient Ltd., a
merchandising trading company located in Hong Kong. From 1975 to 1998,
Mr. Arnulphy was Managing Director of J. Mortenson & Co., Ltd., a manufacturer
of water treatment equipment in Hong Kong.
R. IAN RIGG has been a Trustee since 1999 and was named Chief Financial
Officer in October 1999. He has been the chief financial officer and a director
of Advanced Project Ltd. since 1996 and of Terrawest Industries, Inc. since
1989. He is a nominee director and officer for Bank Gospodarki of Poland.
Mr. Rigg is a chartered accountant in Canada.
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During the fiscal year ended December 31, 2000, the Trustees held no board
meetings but acted on four occasions by resolution adopted by unanimous written
consent. Under the Declaration of Trust of the Company, resolutions may be
adopted by written consent signed by a majority of the Trustees.
COMMITTEES OF THE BOARD
The Company has established an Audit Committee. The Audit Committee
functions pursuant to a charter adopted by the Trustees. A copy of the charter
is attached as Appendix A. The function of the Audit Committee is to meet with
and review the results of the audit of the Company's financial statements
performed by the independent public accountants and to recommend the selection
of independent public accountants. The members of the Audit Committee are
Mr. Michel Arnulphy and Mr. C.S. Moon, each of whom are independent under the
standards of the Nasdaq Stock Market. The Audit Committee met once during 2000.
The Trustees intend to add an additional independent member to the Audit
Committee prior to the end of the second quarter of 2001.
The Company has also established a Compensation Committee. The members of
the Compensation Committee are Mr. C.S. Moon and Mr. Michel Arnulphy. The
primary duty of the Compensation Committee is to grant stock options under the
Company's 1992 Non-Qualified Stock Option Plan and to award bonuses to employees
and consultants under the Company's Incentive Bonus Plan. The Compensation
Committee did not meet during 2000.
The Company does not have a Nominating Committee.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding ownership of the
Company's Shares on the April 30, 2001, by (i) each Trustee, nominee for Trustee
and Named Executive Officer (as defined below); and (ii) all Trustees and
executive officers of the Company as a group. Unless otherwise indicated, each
Named Executive Officer and Trustee has sole voting and disposition power with
respect to the Shares set forth opposite his name. Each such person has
indicated that he will vote all Shares owned by him in favor of the nominees for
Trustee and in favor of each of the other proposals.
SHARES BENEFICIALLY PERCENT OF
NAME OF OWNER OWNED OWNERSHIP
------------- ------------------- ----------
Jimmy S.H. Lee(1)........................................... 1,245,667 6.9%
C.S. Moon(2)................................................ 22,000 *
Michel Arnulphy(2).......................................... 16,000 *
Maarten Reidel.............................................. 120,000 *
Ron Aurell(3)............................................... 87,600 *
Ian Rigg(2)................................................. 40,000 *
Trustees and Officers as a Group (6 persons)(4)............. 1,531,267 8.5%
------------------------
* Less than 1%.
(1) Includes presently exercisable stock options to acquire 1,231,667 shares.
(2) Represents presently exercisable stock options.
(3) Includes presently exercisable stock options to acquire 10,000 shares.
(4) Includes presently exercisable stock options to acquire 1,319,667 shares.
EXECUTIVE COMPENSATION
The following table sets forth information on the annual compensation for
each of the Company's last three fiscal years of the chief executive officer
(the "CEO") and each of the Company's other most highly compensated executive
officers other than the CEO who received aggregate annual remuneration from the
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Company in excess of $100,000 during the fiscal year ended December 31, 2000
(collectively, with the CEO, the "Named Executive Officers").
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------
--------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
------------------ -------- -------- -------- ------------ ------------ ------------
Jimmy S.H. Lee..................... 2000 220,112 0 0 1,360,000 0
Chief Executive Officer 1999 213,227 118,141 0 0 0
1998 221,326 151,200 0 90,000 0
Dr. Ron Aurell..................... 2000 84,738 47,077 0 0 0
Managing Director 1999 98,045 136,173 0 0 0
of Pulp Operations 1998 68,224 13,617 0 0 0
EMPLOYMENT AGREEMENT
Mr. Lee and the Company are parties to an amended and restated employment
agreement dated November 20, 2000. The agreement generally provides, subject to
certain termination provisions, for continued employment of Mr. Lee for a period
of 36 months with automatic one month renewals, so that the contract at all
times has a remaining term of 36 months. The agreement provides for a base
salary and other compensation as determined by the board of directors. The
agreement contains change in control provisions pursuant to which, if a change
in control (as defined in the agreement) occurs, Mr. Lee may only be discharged
for cause. In the event Mr. Lee is terminated without cause or resigns for good
reason (as defined in the agreement) within eighteen months of the change in
control, he shall be entitled to a severance payment of three times his annual
salary under the agreement and all unvested rights in any stock option or other
benefit plans shall vest in full. If Mr. Lee is terminated without cause or
resigns for good reason within three years of the change in control, he shall be
entitled to a severance payment of three times the sum of his then annual salary
under the agreement plus the higher of his last annual bonus and the highest
bonus received during the preceding five years. In addition, all unvested rights
in any stock option or other benefit plans will vest in full. In addition,
Mr. Lee will continue to receive equivalent benefits as were provided at the
date of termination for the remaining term of the agreement.
The agreement provides that the Company will permit Mr. Lee to exercise any
of his stock options by delivery to the Company of a non-recourse promissory
note secured solely by the shares acquired. In addition, the Company has agreed
to lend Mr. Lee up to $10,000,000 to purchase shares of Common Stock in the open
market or otherwise. Any such loan will be on a non-recourse basis secured
solely by the shares acquired.
STOCK OPTIONS
POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL RATES
NUMBER OF TOTAL OF STOCK PRICE APPRECIATION
SECURITIES OPTIONS FOR TEN YEAR OPTION TERM
UNDERLYING GRANTED TO EXERCISE ----------------------------
OPTIONS EMPLOYEES IN PRICE EXPIRATION 5% 10%
NAME GRANTED FISCAL YEAR ($/SHARE) DATE ($) ($)
---- ---------- ------------ --------- ---------- ------------ -------------
Jimmy S.H. Lee.................... 1,360,000 86.6% 6.375 01/2011 5,452,563 13,817,747
The table below provides information on exercises of options during 2000 by
the Named Executive Officers and information with respect to unexercised options
held by the Named Executive Officers at December 31, 2000.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES ACQUIRED FISCAL YEAR-END (#) FISCAL YEAR-END ($)
ON EXERCISE VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- -------------- -------------------- --------------------
Jimmy S.H. Lee..................... 0 0 778,333/906,667 882,708/1,416,667
Dr. R. Aurell...................... 0 0 10,000/0 0/0
COMPENSATION OF TRUSTEES
The Trustees do not receive cash compensation for service as a Trustee. The
Company reimburses the Trustees and officers for their expenses incurred in
connection with their duties as Trustees and officers of the Company.
Non-employee Trustees who are in office at the end of a fiscal year receive
options to acquire 6,000 shares of common stock at an exercise price equal to
the closing price of the Company's shares on The Nasdaq Stock Market's National
Market on the last trading day of the fiscal year.
REPORT OF THE TRUSTEES ON EXECUTIVE COMPENSATION
Compensation of the Company's executive officers is determined on an annual
basis by either the Trustees as a whole or the Compensation Committee in
consultation with management. For 2000, compensation of executive officers was
determined by the Trustees as a whole. The Company's goal is to compensate the
Company's executive officers in a manner which is consistent with the Company's
strategic plan and which rewards executive officers in a fair manner for
performance which forwards the strategic plan. To this end, the Company's basic
compensation philosophy is to maintain annual base salaries for executive
officers at relatively low amounts and to award bonuses and long-term incentives
in the form of stock options based on annual performance of the Company and of
the executive.
The financial results from operating the Company's businesses are the major
factor in determining levels of executive compensation.
The Company adopted an Employee Incentive Plan ("EIP") in 1994 in which the
Company's executive officers and other employees may participate. Under the EIP,
5% of the Company's Net Income for each fiscal year is set aside as a bonus
pool. During the course of the fiscal year, the Trustees may grant interests in
the bonus pool to employees, officers and trustees of the Company and its
subsidiaries. Bonuses are to be paid within 120 days of the end of the
fiscal year.
In evaluating the performance of the Company's executive officers in
awarding grants under the EIP, the Trustees considered factors such as the
growth in earnings of the Company, the effectiveness of cost reduction and
productivity-enhancement measures in the operating subsidiaries, the growth in
assets, and the performance of the Company's Common Stock. The Trustees also
considered the contribution of the Company's executive officers toward the
accomplishment of those goals.
In determining the compensation of the Company's Chief Executive Officer,
Mr. Lee, for 2000, the Trustees evaluated Mr. Lee based on the criteria set
forth above. In determining Mr. Lee's salary and his bonus award under the EIP,
the Trustees considered the operating performance of the Company in a difficult
economic environment for pulp and paper companies and the progress made by the
Company in transitioning its pulp production from sulphite pulp to kraft pulp.
/s/ Michel Arnulphy /s/ Jimmy S.H. Lee /s/ C.S. Moon /s/ Maarten Reidel
/s/ Ian Rigg
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REPORT OF THE AUDIT COMMITTEE
To the Trustees of Mercer International, Inc.:
We have reviewed and discussed with management the Company's audited
consolidated financial statements as of and for the fiscal year ended
December 31, 2000. We have discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, by the Auditing Standards Board
of the American Institute of Certified Public Accountants. We have received and
reviewed the written disclosures and the letter from the independent auditors
required by Independence Standard No. 1, Independence Discussions with Audit
Committees, as amended, by the Independence Standards Board, and have discussed
with the auditors the auditors' independence. The Audit Committee has considered
whether the provision of services by the independent auditing firm other than
audit-related is compatible with maintaining the principal
auditor's independence.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the consolidated financial statements referred to above
be included in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000.
C.S. Moon
Michel Arnulphy
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return (stock
price appreciation plus dividends) on the Company's Common Stock with the
cumulative total return of NASDAQ Market Index and an additional group of peer
companies which comprise Standard Industrial Classification Code 262 -- Paper
Mills for comparison over the five years ending December 31, 1999. The companies
which comprise SIC Code 262 are Abitibi-Consolidated Inc.; American Israeli
Paper; Badger Paper Mills Inc.; Boise Cascade Corporation; Bowater Inc.;
Bunzl PLC ADS; Chesapeake Corporation; Crown Vantage, Inc.; Domtar Inc.;
Fibermark Inc.; Fletcher Challenger Forests; Fletcher Challenger Building; Fort
James Corp.; Kimberly-Clark Corporation; Mercer International Inc.;
P.H. Glatelter Co.; Pope & Talbot Inc.; Potlatch Corporation; Sappi Ltd. ADS;
Schweitzer Mauduit International; Stora Enso, UPM Kymmene Corp. ADS; Votorantim
Cellulose; Wausau-Mosinee Paper Corporation; Westvaco Corporation; Weyerhauser
Company; and Willamette Industries.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY INDUSTRY INDEX AND BROAD MARKET
COMPANY 1996 1997 1998 1999 2000
------- -------- -------- -------- -------- --------
Mercer International Inc. SBI............................ 75.23 64.85 50.34 34.44 39.29
Industry Index........................................... 147.48 152.54 159.14 193.17 145.09
Broad Market............................................. 161.18 197.16 278.08 490.46 237.66
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act") requires that the Company's officers and directors, and persons
who own more than 10% of a registered class of the Company's equity securities,
file reports of ownership and changes of ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish the Company with copies
of all such reports they file.
Based solely on the review of the copies of such reports received by the
Company, and on written representations by the Company's officers and Trustees
regarding their compliance with the applicable reporting requirements under
Section 16(a), the Company believes that all of its officers and Trustees filed
all required reports under Section 16(a) in a timely manner for the year ended
December 31, 2000.
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INDEPENDENT ACCOUNTANTS AND AUDITORS
Peterson Sullivan P.L.L.C., Certified Public Accountants, has been selected
by the Trustees to examine the consolidated financial statements of the Company
and its subsidiaries for the fiscal year ending December 31, 2001. Peterson
Sullivan P.L.L.C. have examined the consolidated financial statements of the
Company and its subsidiaries each year since 1989. Representatives of Peterson
Sullivan P.L.L.C. are not expected to be present at the Annual Meeting.
Fees paid to Peterson Sullivan P.L.L.C. by the Company during 2000 included:
AUDIT FEES. The Company paid Peterson Sullivan $171,341 in fees related to
the audit of the annual financial statements and the reviews of the quarterly
financial statements.
FINANCIAL INFORMATION SYSTEMS. The Company made no payments to Peterson
Sullivan related to the operation, supervision, design, or implementation of the
Company's financial information systems.
ALL OTHER FEES. All other fees paid to Peterson Sullivan in 2000 totaled
$170,824. These services were comprised mainly of accounting and tax services.
CHANGE OF RIGHTS AGENT
In July 1999, the Company retained a new rights agent for its Shareholder
Rights Agreement. The name, address and telephone number of the new rights agent
is:
CIBC Mellon Trust Company
2001 University Street
Montreal, Quebec, Canada H3A 2A6
(514) 285-3609
FUTURE SHAREHOLDER PROPOSALS
Any proposal which a Shareholder intends to present at the next Annual
Meeting of Shareholders must be received by the Company on or before
February 1, 2002. A shareholder must notify the Company on or before April 16,
2002 that he or she intends to introduce a proposal at the 2002 shareholder
meeting or management will have discretionary authority to vote its proxies with
respect to any such proposal.
OTHER MATTERS
The Trustees know of no matter other than those mentioned in the Proxy
Statement to be brought before the meeting. If other matters properly come
before the meeting, it is the intention of the Proxy holders to vote the Proxies
in accordance with their judgment. If there are insufficient votes to approve
any of the proposals contained herein, the Trustees may adjourn the meeting to a
later date and solicit additional Proxies. If a vote is required to approve such
adjournment, the Proxies will be voted in favor of such adjournment.
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION WILL BE PROVIDED TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST
DIRECTED TO MERCER INTERNATIONAL INC., SHAREHOLDERS INFORMATION,
GIESSHUBELSTRASSE 15, 8045 ZURICH, SWITZERLAND.
By Order of the Trustees,
Date: June - , 2001.
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APPENDIX A
AUDIT COMMITTEE CHARTER
ADOPTED BY THE BOARD OF DIRECTORS OF
MERCER INTERNATIONAL INC.
COMPOSITION
The audit committee shall be composed of three or more directors, as
determined by the board of directors. Each of the committee members shall meet
the independence and financial literacy requirements of NASDAQ unless the Board
determines that no more than one individual who does not meet the independence
requirements would bring valuable financial or accounting experience to the
committee. In addition, at least one of the members shall have past employment
experience in finance or accounting, requisite professional certification in
accounting, or any other comparable experience or background which results in
the individual's financial sophistication, including being or having been a
chief executive officer, chief financial officer or other senior officer with
financial oversight responsibilities.
Unless a chair is designated by the board of directors, the committee
members may appoint their own chair by majority vote.
RESPONSIBILITIES
1. Recommend to the board of directors the selection of the independent
auditor, evaluate the performance of the independent auditor and, if so
determined by the audit committee, recommend to the board of directors
replacement of the independent auditor; it being acknowledged that the
independent auditor is ultimately accountable to the board of directors and
the audit committee, as representatives of the stockholders.
2. Ensure the receipt of, and evaluate, the written disclosures and the letter
that the independent auditor submits to the audit committee regarding the
auditor's independence in accordance with Independence Standards Board
Standard No. 1, discuss such reports with the auditor and, if so determined
by the audit committee in response to such reports, recommend that the board
of directors take appropriate action to address issues raised by such
evaluation.
3. Discuss with the independent auditor the matters required to be discussed by
SAS 61, as it may be modified or supplemented.
4. Instruct management and the independent auditor that the committee expects
to be informed if there are any subjects that require special attention of
if they perceive any significant weaknesses in the company's information and
reporting systems.
5. Meet with management and the independent auditor to discuss the annual
financial statements and the report of the independent auditor thereon, and
to discuss significant issues encountered in the course of the auditor work,
including restrictions on the scope of activities, access to required
information and the adequacy of internal financial control.
6. Review the management letter delivered by the independent auditor in
connection with the audit.
7. Meet quarterly with management and, if required, the independent auditor to
discuss the quarterly financial statements prior to the filing of the
Form 10Q; provided that this responsibility may be delegated to a member of
the audit committee.
8. Meet at least once each year in separate executive sessions with management
and the independent auditor to discuss matters that any of them or the
committee believes could significantly affect the financial statements and
should be discussed privately.
9. Have such meetings with management and the independent auditor as the
committee deems appropriate to discuss significant financial risk exposures
facing the company and management's plans for monitoring and controlling
such exposures.
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10. Review significant changes to the company's accounting principles and
practices proposed by the independent auditor or management.
11. Conduct or authorize such inquiries into matters within the committee's
scope of responsibility as the committee deems appropriate. The committee
shall be empowered to retain independent counsel and other professionals to
assist in the conduct of any such inquiries.
12. Provide minutes of audit committee meetings to the board of directors, and
report to the board of directors on any significant matters arising from
the committee's work.
13. At least annually, review and reassess this charter and, if appropriate,
recommend proposed changes to the board of directors.
14. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the company's annual proxy statement.
15. In the performance of its responsibilities, the audit committee is the
representative of the shareholders. However, it is not the responsibility
of the audit committee to plan or conduct audits, or to determine whether
the company's financial statements are complete and accurate or in
accordance with generally accepted accounting principles.
13
PROXY
MERCER INTERNATIONAL INC.
Giesshubelstrasse 15
8045 Zurich
Switzerland
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MERCER
INTERNATIONAL INC.
The undersigned hereby appoints Jimmy S.H. Lee as proxy, with the power of
substitution to represent and to vote as designated below, all the shares of
beneficial interest of Mercer International Inc. held of record by the
undersigned on May 21, 2001, at the Annual Meeting of Shareholders to be held on
July 10, 2001, or any adjournment thereof.
1. ELECTION OF TRUSTEES
FOR the nominees listed WITHHOLD AUTHORITY
below (except as marked to vote for the nominees
to the contrary below) / / listed below / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
C.S. Moon Maarten Reidel
2. In his discretion, the Proxy holder is authorized to vote upon such
other business as may properly come before the meeting.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSAL 1.
Please sign exactly as name appears on your share certificates. When shares
are held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
DATED: ------------ , 2001
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Signature
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Print Name
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Signature, if jointly held
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Print Name
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Number of shares held
Please mark, sign, date and return this Proxy promptly using the enclosed
envelope.
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