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 Meeting
of Shareholders of the Corporation (the "Meeting") to be held on the
14th day of December, 2006, at 2:30 p.m. (local time) in the
Columbus Suite, The Fairmont Hotel,
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 602 TD Place,
140 Water Street, St. John's, Newfoundland A1C 6H6 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 10, 2006. 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, 40,511,675 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 3,748,687 common shares, representing 9.28% of all issued and
outstanding shares of the Corporation. Atlantis
Corporation Limited of
CORPORATE GOVERNANCE
The following is
the disclosure required by Form 58-101F2 of National Instrument 58-101 Disclosure
of Corporate Governance Practices.
Board of
Directors
The Board of
Directors presently has seven directors, six of whom are independent. The definition of independence used by the
Company is that used by the Canadian Securities Administrators as set out in
section 1.4 of Multilateral Instrument 52-110 Audit Committees (“MI 52-110”). A director is “independent” if he has no
direct or indirect material relationship with the Company. A “material relationship” is a relationship
which could, in the view of the Board of Directors, be reasonably expected to
interfere with the exercise of the directors independent judgement. Criteria for determining material
relationships are outlined in section 1.4 of MI 52-110.
James O’Reilly,
William Warren, Ronald Jones, Roger Pike, Eric Jerrett and Tarik Elsaghir are
considered to be independent directors.
The Board
believes that the principal objective of the Company is to generate economic
returns with the goal of maximizing shareholder value, and that this is to be
accomplished by the Board through the stewardship of the Company. In fulfilling
its stewardship function, the Board’s responsibilities will include strategic
planning, appointing and overseeing management, risk identification and
management, environmental oversight, overseeing financial and corporate
issues. Directors are involved in the
supervision of management.
The Chair is not
independent. Pursuant to the Business
Corporations Act (
Other
Directorships
The following
directors of the Company are also directors of other reporting issuers:
|
Current
Director/Nominee |
Directorships
of Other Reporting Issuers |
|
Eric Jerrett |
Newfoundland
Goldbar Resources Inc. |
|
|
Newfoundland
Goldbar Resources Inc. |
Orientation and
Continuing Education
New Directors of
the Company are provided with pertinent information about the Company including
written information about the duties and obligations of directors, the business
and operations of the Company and documents from recent Board meetings. Specific details of the orientation of each
new director are tailored to that individual’s needs and areas of interest.
The Company also
provides continuing education to directors by way of management presentations
to ensure that their knowledge and understanding of the Company’s business
remains current. The Company’s financial
and legal advisers are also available to the Company’s directors.
Ethical Business
Conduct
The Company has
adopted a Corporate Code of Conduct (the “Code”), which is intended to document
the principles of conduct and ethics to be followed by the Company’s directors,
officers and employees. The purpose of
the Code is to:
§
Promote integrity and deter wrongdoing
§
Promote honest and ethical conduct, including the
ethical handling of actual or apparent conflicts of interest.
§
Promote avoidance of absence of conflicts of interest.
§
Promote full, fair, accurate, timely and
understandable disclosure in public communications made by the Company.
§
Promote compliance with applicable governmental laws,
rules and regulations.
§
Promote a safe and healthy work environment
§
Promote equal opportunity employment and deter
discrimination
§
Promote and provide a mechanism for the prompt,
internal reporting of departures from the Code
§
Promote accountability for adherence to the Code
§
Provide guidance to the Company’s directors, officers
and employees to help them recognize and deal with ethical issues
§
To help foster a culture of integrity, honesty and
accountability throughout the Company.
A copy of the
Code of Conduct is available from the Company’s offices. In the Board’s regular meetings, the Board
considers the Company’s operations and business activities in light of the Code
of Conduct. The Board expects management
to operate the business of the Company in a manner that enhances shareholder
value and is consistent with the highest level of integrity.
Nomination of
Directors
The Company does
not have a formal process or committee for proposing new nominees for election
to the Board of Directors. The nominees
are generally the result of recruitment efforts by the Board members, including
both formal and informal discussions among Board members.
Compensation
The Company does
not have a compensation committee. At
this time, the directors and officers of the Company are compensated by the
issuance of stock options. The stock
options are granted according the Company’s stock option plan, which is
approved by the shareholders of the company and reviewed on an annual basis.
Other Board
Committees
Standing
committees of the Board are the Corporate Governance Committee and the Audit
Committee.
Assessments
There is no
formal committee with the responsibility for assessing the effectiveness of the
Board, its committees or individual directors. Board members are subject to the
terms disclosed in the Corporate Code of Conduct and the Charter of
the Board of Directors.
AUDIT COMMITTEE
The following is
disclosure required by Form 52-110F2 of MI 52-110.
General
The Audit
Committee is a committee of the Board, the primary function of which is to
assist the Board in fulfilling its financial oversight responsibilities, which
will include monitoring the quality and integrity of the Company’s financial
statements and the independence and performance of the Company’s external
auditor, acting as liaison between the Board and the Company’s external
auditor, reviewing the financial information that will be publicly disclosed
and reviewing all audit processes and the systems of internal controls management
and the Board have established.
Audit Committee
Charter
The Board has
adopted an Audit Committee Charter, which sets out the Audit Committee’s
mandate and responsibilities. The Audit Committee’s Charter is attached to this
Information Circular as Appendix “A”.
Composition
The Audit
Committee consists of the following directors:
|
Name of Member |
Independent (1) |
Financially
Literate (2) |
|
Eric Jerrett |
Yes |
Yes |
|
James O’Reilly |
Yes |
Yes |
|
William Warren |
Yes |
Yes |
Notes
(1)
As per MI 52-110, “Independent” means that the member
has no direct or indirect material relationship with the issuer.
(2)
As per MI 52-110, “Financially Literate” means that
the member is able to read and understand financial statements and the
associated accounting issues relevant to the issuer.
Audit Committee
Oversight
Since the
commencement of the Company’s most recently completed financial year, there
have been no recommendations of the Audit Committee to nominate or compensate
an external auditor which was not adopted by the Board.
Reliance on
Certain Exemptions
Since the
commencement of the Company’s most recently completed financial year, the
Company has not relied on the exemption in section 2.4 (De Minimis Non-audit
Services) of MI 52-110 or an exemption from MI 52-110, in whole or in part,
granted under Part 8 (Exemptions) of MI 52-110.
Pre-Approval
Policies and Procedures
The Audit
Committee has not adopted specific policies and procedures for the engagement
of non-audit services, however, as provided for in MI 52-110 the Audit Committee
must pre-approve all non-audit services to be provided to the Company or its
subsidiaries, unless otherwise permitted by MI 52-110.
External
Auditor Service Fees (By Category)
|
Financial Year Ending |
Audit Fees (1) |
Audit Related Fees (2) |
Tax Fees (3) |
All Other Fees (4) |
|
June 30, 2006 |
16,500 |
9,900 |
-- |
3,300 |
|
June 30, 2005 |
15,000 |
-- |
-- |
-- |
Notes:
(1)
The aggregate fees billed by the Company’s auditor for
audit fees
(2)
The aggregate fees billed for assurance and related
services by the Company’s auditor that are reasonably related to the
performance of the audit or review of the Company’s financial statements and
are not disclosed in the ‘Audit Fees’ column.
(3)
The aggregate fee billed for professional services
rendered by the Company’s auditor for tax compliance, tax advice and tax
planning.
(4)
The aggregate fees billed for professional services
other that those listed in the other three columns.
Exemption
Pursuant to
section 6.1 of MI 52-110, the Company is exempt from the requirements of Part 3
Composition of the Audit Committee and Part 5 Reporting Obligations
of MI 52-110 because it is a venture issuer.
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, 2006 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.
The following
Option Agreements are in place with Officers, Directors and Consultants of the
Corporation under the terms of the Corporation’s Stock Option Plan:
|
|
Number of Options |
Exercise Price |
Expiry Date |
Number of Options |
Exercise Price |
Expiry Date |
Total Outstanding |
|
|
150,000 |
0.15 |
23-Jan-09 |
500,000 |
0.22 |
31-Jan-11 |
650,000 |
|
Ronald Jones |
150,000 |
0.15 |
23-Jan-09 |
50,000 |
0.22 |
31-Jan-11 |
200,000 |
|
Erik Jerrett |
-- |
0.15 |
23-Jan-09 |
50,000 |
0.22 |
31-Jan-11 |
50,000 |
|
William Warren |
150,000 |
0.15 |
23-Jan-09 |
50,000 |
0.22 |
31-Jan-11 |
200,000 |
|
Lorna Smith |
75,000 |
0.15 |
23-Jan-09 |
25,000 |
0.22 |
31-Jan-11 |
100,000 |
|
|
50,000 |
0.15 |