INFORMATION CIRCULAR
This circular is
provided in connection with the solicitation by Management of New Island
Resources Inc. (the "Corporation") of proxies for the Annual and
Special Meeting of Shareholders of the Corporation (the "Meeting") to
be held Friday, the 17th day of December, 2004, at 2:30 p.m. (local
time) in the Columbus Room, The Fairmont Newfoundland, St. John's, NL.
Management does
not contemplate a solicitation of proxies otherwise than by mail. The cost thereof will be borne by the
Corporation.
The persons named in the enclosed form of proxy (“Proxy”) are directors
of the Corporation. A shareholder has
the right to designate a person (who need not be a shareholder) other than the
management designees to represent him or her at the Meeting. Such right may be exercised by striking out
the names of the management designees and inserting in the space provided for
that purpose the name of the person to be designated.
If this Proxy is
to be utilized, it must be dated and signed by the shareholder or the
shareholder's attorney authorized in writing or, if the shareholder is a
corporation, under its corporate seal by an officer or attorney thereof duly
authorized with proof of such authorization attached. If this Proxy is not dated in the space provided, it will be
deemed to bear the date on which it was mailed. A proxy is valid only at the Meeting in respect of
which it is given or any adjournment thereof if completed and delivered to CIBC
Mellon Trust Company in the envelope provided, or deposited at the office of
the Corporation, Suite 503 Scotia Centre, 235 Water Street, St. John's,
Newfoundland A1C 1B6 not less than 48 hours (excluding
Saturdays, Sundays, and holidays) before the time for the holding of the Meeting or any adjournment
thereof.
A shareholder has the power to revoke a Proxy at any time insofar as it
has not been exercised. In addition to
revocation in any other manner permitted by law, a Proxy may be revoked in
writing executed by the shareholder or the shareholder's attorney authorized in
writing, with proof of such authorization attached, and deposited either (a) at
the registered office of the Corporation at any time up to and including the
last business day preceding the day of the Meeting, or any adjournment thereof,
at which the Proxy is to be used, or (b) with the chairman of the Meeting on
the day of the Meeting, or any adjournment thereof.
Common shares
represented by proxy in favour of management nominees shall be voted on any
ballot at the Meeting, and where the shareholder specified a choice with
respect to any matter to be acted upon, the shares shall be voted on any ballot
in accordance with the specification so made.
IN THE ABSENCE OF
SUCH SPECIFICATION, SHARES WILL BE VOTED IN FAVOUR OF THE MATTERS TO BE ACTED
UPON. THE PERSONS APPOINTED UNDER THE
INSTRUMENT OF PROXY FURNISHED BY THE CORPORATION ARE CONFERRED WITH
DISCRETIONARY AUTHORITY WITH RESPECT TO AMENDMENTS OR VARIATIONS OF THOSE
MATTERS SPECIFIED IN THE PROXY AND NOTICE OF ANNUAL AND SPECIAL MEETING. AT THE TIME OF PRINTING THIS INFORMATION
CIRCULAR, MANAGEMENT OF THE CORPORATION KNOWS OF NO SUCH AMENDMENT, VARIATION
OR OTHER MATTER.
ADVICE TO BENEFICIAL SHAREHOLDERS
Shareholders who do not hold their Common Shares in their own name
(referred to herein as “Beneficial Shareholders”) are advised that only Proxies
from shareholders of record can be recognized and voted upon at the Meeting.
The Proxy supplied to Beneficial Shareholders is substantially similar to that
provided to registered shareholders.
However, its purpose is limited to instructing the registered
shareholder (usually a brokerage house) how to vote on behalf of the Beneficial
Shareholder. Every intermediary
(brokerage house) has its own mailing procedure and provides its own return
instructions, which should be carefully followed.
All references
to shareholders in this Management Information Circular and the accompanying
Proxy and Notice of Meeting are to shareholders of record unless specifically
stated otherwise.
The Record Date
has been set for November 12, 2004. The date for determination of the
shareholders entitled to receive Notice of the Meeting or any adjournment thereof
shall be as of the Record Date. Any
shareholder of record as at the close of business of the transfer agent of the
Corporation in Calgary, Alberta, on the Record Date, who either personally
attends the Meeting or has completed and delivered a Form of Proxy in the
manner and subject to the provisions set out in the heading APPOINTMENT AND
REVOCATION OF PROXIES will be entitled to vote or to have his or her shares
voted at the Meeting, except to the extent that a shareholder has transferred
his or her shares after that day and the transferee of those shares produces
proof that he or she owns the shares and demands not later than ten days before
the Meeting that his or her name be included in the list before the Meeting, in
which case the transferee shall be entitled to vote these shares at the
Meeting.
As at the date
hereof, 23,752,038 common shares without nominal or par value of the
Corporation are issued and outstanding - each such share carrying the right to
one vote at the Meeting.
To the knowledge
of the Directors and Senior Officers of the Corporation, no person or company
beneficially owns, directly or indirectly, or exercises control or direction
over, voting shares carrying more than 10% of the voting rights attached to the
common shares except Newfoundland Goldbar Resources Inc., of St. John's,
Newfoundland, which beneficially owns 4,098,687 common shares, representing
17.3% of all issued and outstanding shares of the Corporation.
Atlantis
Corporation Limited of St. John's, Newfoundland, together with its wholly-owned
subsidiary, Atlantis Technologies Limited, holds 22.8% of the outstanding
shares of Newfoundland Goldbar Resources Inc.
Mr. Harold L. Wareham is a Director of Newfoundland Goldbar Resources
Inc., and is Chairman and C.E.O. of Atlantis Corporation Limited.
Since
the date of the last Annual Meeting of Shareholders of the Corporation, none of
the Directors or Senior Officers of the Corporation has been indebted to the
Corporation nor are any transactions contemplated pursuant to which such
indebtedness will arise.
STATEMENT OF
EXECUTIVE COMPENSATION
The following
table shows remuneration paid to the fiscal year ended June 30, 2004 to
Directors and Senior Officers of the Corporation.
Nature of Remuneration
|
||||
|
|
From Office
or
Employment (Aggregate) |
Cost of
Pension Benefits
(Aggregate) |
Other
(Aggregate) |
|
|
Directors
(Total 5) |
Nil |
Nil |
Nil |
|
|
Senior Officers (Total 1) |
$42,000 |
Nil |
Nil |
|
Mr. Harold Wareham is President and controlling
shareholder of Atlantis Corporation Limited. During the year, the Corporation
was charged $106,321 by Atlantis Corporation Limited for rent, accounting,
secretarial and administrative services.
Included in this amount is the remuneration of $42,000 as noted above.
The following
Option Agreements are in place with Officers and/or Directors of the
Corporation under the terms of the Corporation’s Stock Option Plan:
|
Officers
and/or Directors of the Corporation |
Number
of Common
Shares |
Exercise Price |
Expiry |
|
Harold L. Wareham |
150,000 |
$0.15 |
January 23, 2009 |
|
Ronald M. Jones |
150,000 |
$0.15 |
January 23, 2009 |
|
Eric K. Jerrett |
150,000 |
$0.15 |
January 23, 2009 |
|
Roger W. Pike |
150,000 |
$0.15 |
January 23,
2009 |
|
William E.
Warren |
150,000 |
$0.15 |
January 23,
2009 |
|
Richard R.
Flynn |
150,000 |
$0.15 |
January 23,
2009 |
|
Lorna Smith |
75,000 |
$0.15 |
January 23,
2009 |
|
Lisa Hodge |
50,000 |
$0.15 |
January 23,
2009 |
To the knowledge
of the Corporation's Directors, the only matters to be brought before the
Meeting are those set forth in the accompanying Notice of Meeting relating to
receiving the financial statements of the Corporation for the year ended June
30, 2004; the Auditor's report thereon; the election of the Board of Directors;
the appointment of the Auditors for the ensuing year and authorizing the
Directors to fix their remuneration; and the annual approval of the Corporation’s
Stock Option Plan. IT IS THE INTENTION OF THE MANAGEMENT DESIGNEES, IF NAMED
AS PROXY, TO VOTE FOR THE APPROVAL OF ALL OF THE FOREGOING.
Each Director of
the Corporation is elected and holds office until the next Annual General
Meeting of the shareholders unless that person ceases to be a Director prior to
that date. Management does not
contemplate that any of the nominees will be unable to serve as a director. In the absence of instructions to the
contrary, the shares represented by proxy will be voted for the nominees herein
listed.
The
Management nominees for the Board of Directors and information concerning them
as furnished by the individual nominees are as follows:
|
Name and Address |
Office |
Principal Occupation |
Date First
appointed as a Director |
Common Shares Beneficially Owned as of Record date |
|
Harold L. Wareham St. John’s, NL |
President, Chairman & CEO |
Chairman and C.E.O. of Atlantis Corporation Limited. |
11/11/91 |
1,328,039 |
|
Ronald M. Jones Vernon, B.C. |
-- |
Independent businessman since April 1987, prior to
Vice-President and Director of CEDA International Ltd. |
28/01/91 |
431,284 |
|
Eric K. Jerrett(1) P.Eng. Bay Roberts, NL |
-- |
Past President of E.K. Jerrett & Associates Ltd.
- retired |
07/03/94 |
12,500 |
|
Roger W. Pike St. John’s, NL |
-- |
President & CEO, Pike Group of Companies, St.
John's, NL |
15/12/00 |
100,000 |
|
William Warren(1) St. John’s, NL |
-- |
President, Island Industrial St. John’s, NL |
18/12/03 |
480,000 |
|
Richard R. Flynn(1) Dartmouth, NS |
-- |
Airline Executive Halifax, NS |
18/12/03 |
-- |
(1)Member of Audit
Committee
All of
the proposed nominees for Directors are ordinarily resident in Canada.
Shareholders
will be asked to approve the appointment of Deloitte & Touche LLP as
Auditors of the Corporation for the ensuing year at remuneration to be set by
the Directors.
Pursuant to Policy 4.4 of the TSX Venture
Exchange (the “Policy”), Corporations that have a rolling stock option plan
reserving a maximum of 10% of the issued and outstanding shares of the
Corporation must receive yearly shareholder approval of the Stock Option Plan
(the “Plan”). Accordingly, shareholders
are being requested to approve the Plan, attached as Appendix “A”, and
authorize the Board of Directors to grant options in the capital stock of the
Corporation pursuant to and in accordance with the provisions of the Plan.
PARTICULARS
OF OTHER MATTERS TO BE ACTED ON
Management
knows of no other matters to come before the meeting of shareholders other than
those referred to in the notice of meeting, however, should any other matters
properly come before the meeting, the shares represented by the proxy solicited
hereby will be voted on such matters in accordance with the best judgement of
the persons voting the shares presented by the proxy.
EFFECTIVE DATE
Unless
otherwise stated, information contained herein is given as of the 12th
day of November, 2004.
CERTIFICATE
The
contents of and the sending of this Information Circular have been approved by
the Directors of the Corporation.
The
foregoing contains no untrue statements 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.
Dated
as of the 12th day of November 2004.
Harold
L. Wareham Lorna
Smith
Appendix
“a”
NEW
ISLAND RESOURCES INC.
STOCK
OPTION PLAN
1.
Purpose
of Plan
The purpose of
this plan (the "Plan") is to develop the interest of bona fide
Officers, Directors, Employees, Management Company Employees, and Consultants
of New Island Resources Inc. and its subsidiaries (collectively, the
"Corporation") in the growth and development of the Corporation by
providing them with the opportunity through stock options to acquire an
increased proprietary interest in the Corporation.
2.
Administration
The Plan shall
be administered by the Board of Directors of the Corporation, or if appointed,
by a special committee of Directors appointed from time to time by the Board of
Directors of the Corporation (such committee, or if no such committee is
appointed, the Board of Directors of the Corporation, is hereinafter referred
to as the "Committee") pursuant to rules of procedure fixed by the
Board of Directors.
3.
Granting
of Options
The Committee
may from time to time designate bona fide Directors, Officers, Employees,
Management Company Employees and Consultants of the Corporation (or in each
case their personal holding companies) (collectively, the
"Optionees"), to whom options ("Options") to purchase
common shares ("Common Shares") of the Corporation may be granted,
and the number of Common Shares to be optioned to each, provided that:
(a)
the
total number of Common Shares issuable pursuant to the Plan shall not exceed
10% of the issued and outstanding Common Shares, subject to adjustment as set
forth herein, and further subject to the applicable rules and regulations of
all regulatory authorities to which the Corporation is subject, including the
TSX Venture Exchange (the "Exchange");
(b)
the
number of Common Shares reserved for issuance, within a one-year period, to any
one Optionee shall not exceed 5% of the Outstanding Common Shares;
(c)
the
number of Common Shares reserved for issuance, within a one-year period, to any
one Consultant of the Corporation may not exceed 2% of the Outstanding Common
Shares;
(d)
the
aggregate number of Common Shares reserved for issuance, within a one-year
period, to Employees or Consultants conducting Investor Relations Activities
may not exceed 2% of the Outstanding Common Shares; and
(e)
unless
the Plan has been approved by the shareholders of the Corporation at a meeting
thereof by a majority of the votes cast at the meeting, other than votes
attaching to securities beneficially owned by Insiders of the Corporation to
whom Common Shares may be issued pursuant to the Plan, and Associates of any
such Insiders:
(i)the maximum number of Common Shares reserved
for issuance pursuant to Options granted to Insiders at any time may not exceed
10% of the number of Outstanding Common Shares;
(ii)the maximum number of Common Shares which may
be issued to Insiders, within a one-year period, may not exceed 10% of the
number of Outstanding Common Shares; and
(iii)the maximum number of Common Shares which may
be issued to any one Insider and the Associates of such Insider, within a
one-year period, may not exceed 5% of the number of Outstanding Common Shares;
provided that for the purposes of paragraphs (i), (ii), and (iii) above, an entitlement granted prior to the grantee becoming an Insider may be excluded in determining the number of Common Shares issuable to Insiders.
4.
Vesting
The Committee
may, in its sole discretion, determine the time during which Options shall vest
and the method of vesting.
5.
Exercise
Price
The exercise
price of any Option shall be fixed by the Committee when such Option is
granted, provided that such price shall not be less than the Discounted Market
Price of the Common Shares, or such other price as may be determined under the
applicable rules and regulations of all regulatory authorities to which the
Corporation is subject, including the Exchange.
In the event
that the Corporation proposes to reduce the exercise price of Options granted
to an Optionee who is an Insider of the Corporation at the time of the proposed
amendment, said amendment shall not be effective until disinterested
shareholder approval has been obtained in respect of the exercise price
reduction.
6.
Option
Terms
The period
during which an Option is exercisable shall, subject to the provisions of the
Plan requiring acceleration of rights of exercise, be such period as may be
determined by the Committee at the time of grant, but subject to the rules of
any stock exchange or other regulatory body having jurisdiction. Each Option shall, among other things,
contain provisions to the effect that the Option shall be personal to the
Optionee and shall not be assignable or transferable. In addition, each Option
shall provide that:
(a)
upon
the death of the Optionee, the Option shall terminate on the date determined by
the Committee, which date shall not be later than the earlier of the expiry
date of the Option and one year from the date of death (the "Termination
Date");
(b)
if
the Optionee shall no longer be a Director or Officer of, be in the employ of,
or be providing ongoing management or consulting services to the Corporation,
the Option shall terminate on the earlier of the expiry date of the Option and
the expiry of the period (the "Termination Date"), not in excess of
90 days prescribed by the Committee at the time of grant, following the date
that the Optionee ceases to be a Director, Officer or Employee of the
Corporation, or ceases to provide ongoing management or consulting services to
the Corporation, as the case may be; and
(c)
if
the Option is granted to an Optionee who is engaged in Investor Relations
Activities on behalf of the Corporation, the Option shall terminate on the
earlier of the expiry date of the Option and the expiry of the period (the
"Termination Date"), not in excess of 30 days prescribed by the
Committee at the time of grant, following the date that the Optionee ceases to
provide ongoing Investor Relations Activities;
provided that the number of Common Shares that the Optionee (or his heirs or successors) shall be entitled to purchase until the Termination Date shall be the number of Common Shares which the Optionee was entitled to purchase on the date of death or the date the Optionee ceased to be an Officer, Director or Employee of, or ceased providing ongoing management or consulting services to, the Corporation, as the case may be.
7.
Exercise
of Option
Subject to the
provisions of the Plan, an Option may be exercised from time to time by
delivery to the Corporation at its head office, or such other place as may be
specified by the Corporation, of a written notice of exercise specifying the
number of Common Shares with respect to which the Option is being exercised and
accompanied by payment in full of the purchase price of the Common Shares then
being purchased.
8.
Mergers,
Amalgamation and Sale
If the
Corporation shall become merged (whether by plan of arrangement or otherwise)
or amalgamated within or with another corporation or shall sell the whole or
substantially the whole of its assets and undertakings for shares or securities
of another corporation, the Corporation shall, subject to this Section 8, make
provision that, upon exercise of an Option during its unexpired period after
the effective date of such merger, amalgamation or sale, the Optionee shall
receive such number of shares of the continuing successor corporation in such
merger or amalgamation or the securities or shares of the purchasing
corporation as the Optionee would have received as a result of such merger,
amalgamation or sale if the Optionee had purchased the shares of the
Corporation immediately prior thereto for the same consideration paid on the
exercise of the Option and had held such shares on the effective date of such
merger, amalgamation or sale and, upon such provision being made, the
obligation of the Corporation to the Optionee in respect of the Common Shares
subject to the Option shall terminate and be at an end and the Optionee shall
cease to have any further rights in respect thereof.
9.
Termination
of Option in the Event of Take-Over Bid
In the event a
take-over bid (as defined in the Securities Act (Alberta), which is not
exempt from the take-over bid requirements of Part 13 (132(1) of the Securities
Act (Alberta) (or its replacement or successor provisions) shall be made
for the Common Shares of the Corporation, the Corporation may in the agreement
providing for the grant of Options herein provide that the Corporation may
require the disposition by the Optionee and the termination of any obligations
of the Corporation to the Optionee in respect of any Options granted by paying
to the Optionee in cash the difference between the exercise price of
unexercised Options and the fair market value of the securities to which the
Optionee would have been entitled upon exercise of the unexercised Options on
such date, which determination of fair market value shall be conclusively made
by the Committee, subject to approval by the stock exchanges upon which the Common
Shares are then listed, if required by such exchanges. Upon payment as aforesaid, the Options shall
terminate and be at an end and the Optionee shall cease to have any further
rights in respect thereof.
10.
Alterations
in Shares
Appropriate
adjustments in the number of Common Shares optioned and in the Exercise Price,
as regards Options granted or to be granted, may be made by the Committee in
its discretion to give effect to adjustments in the number of Common Shares of
the Corporation resulting subsequent to the approval of the Plan by the
Committee from subdivisions, consolidations or reclassifications of the Common
Shares of the Corporation, the payment of stock dividends by the Corporation,
or other relevant changes in the capital of the Corporation.
11.