SCHEDULE 14A
(RULE 14A-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
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 Rule14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
VISCOUNT SYSTEMS, INC.
(Name of Registrant as Specified In Its Charter)
___________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required | |
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11 | |
(1) | Title of each class of securities to which transaction applies: |
N/A | |
(2) | Aggregate number of securities to which transaction applies: |
N/A | |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
N/A | |
(4) | Proposed maximum aggregate value of transaction: |
N/A | |
(5) | Total fee paid: |
N/A | |
[ ] Fee paid previously with preliminary materials. |
[ ] 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: |
N/A | |
(2) | Form, Schedule or Registration Statement No.: |
N/A | |
(3) | Filing Party: |
N/A | |
(4) | Date Filed: |
N/A |
2
VISCOUNT SYSTEMS, INC.
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD AT 10:00 A.M. ON MAY 28, 2013
The 2013 Annual General Meeting of Shareholders (the “Meeting”) of Viscount Systems, Inc. will be held at 10:00 a.m. (Pacific Standard Time) on Tuesday, May 28, 2013, at 4585 Tillicum Street, Burnaby, British Columbia, V5J 5K9 for the following purposes:
1. | To receive the financial statements of the Company for its financial year ended December 31, 2012 together with the report of the independent auditors thereon; |
2. | To fix the number of Directors at five; |
3. | To elect Directors; |
4. | To ratify the appointment of Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants as the independent auditors for Viscount Systems, Inc. for the year ending December 31, 2013; |
5. | To consider an advisory vote on the executive compensation; |
6. | To consider an advisory vote on the frequency of holding future advisory votes on executive compensation; and |
7. | To transact such other business as may properly come before the Meeting and any adjournment or postponement thereof. |
The Board of Directors has fixed April 23, 2013 as the record date for determining shareholders entitled to receive notice of, and to vote at, the Meeting or any adjournment or postponement thereof. Only shareholders of record at the close of business on that date will be entitled to notice of and to vote at the Meeting.
All shareholders are invited to attend the Meeting in person, but even if you expect to be present at the meeting, you are requested to mark, sign, date and return the enclosed proxy card as promptly as possible to ensure your representation.All proxies must be received by our proxy tabulating agent not less than forty-eight (48) hours, excluding Saturdays, Sundays, and holidays,prior to the time of the meeting in order to be counted.The address of our proxy tabulating agent is as follows: Advantage Proxy, 24925 13thPlace South, Des Moines, WA 98198, fax number (206) 870-8492. Scanned copies of signed proxies can also be sent by email toksmith@advantageproxy.com. Shareholders of record attending the Meeting may vote in person even if they have previously voted by proxy.
Dated at Vancouver, British Columbia, this 23rdday of April, 2013.
BY ORDER OF THE BOARD OF DIRECTORS |
/s/ Stephen Pineau |
______________________________________ |
Stephen Pineau |
President, Chief Executive Officer, Secretary and Director |
Important Notice Regarding the Availability of Proxy Materials for |
the Company’s Annual Meeting of Shareholders on May 28, 2013. |
The Viscount Systems, Inc. Proxy Statement and 2012 Annual Report to Shareholders |
are available online at www.viscount.com |
VISCOUNT SYSTEMS, INC.
4585 TILLICUM STREET
BURNABY, BC V5J 5K9
PROXY STATEMENT AND INFORMATION CIRCULAR
ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 2013
In this Proxy Statement and Information Circular, all references to “$” are references to United States dollars and all references to “C$” are references to Canadian dollars.
The enclosed proxy is solicited by the Board of Directors of Viscount Systems, Inc. ("Viscount" or the “Company”), a Nevada corporation, for use at the Annual Meeting of Shareholders of Viscount (the “Meeting”) to be held at 10:00 a.m. (Pacific Standard Time) on Tuesday, May 28, 2013, at 4585 Tillicum Street, Burnaby, British Columbia, V5J 5K9, and at any adjournment or postponement thereof.
This Proxy Statement and the accompanying proxy card are being mailed to the stockholders of Viscount on or about April 30, 2013.
The cost of solicitation will be borne by the Company. The solicitation will be made primarily by mail. Proxies may also be solicited personally or by telephone by certain of the Company’s directors, officers and regular employees, who will not receive additional compensation therefore. In addition, the Company will reimburse brokerage firms, custodians, nominees and fiduciaries for their expenses in forwarding solicitation materials to beneficial owners.
Our principal executive offices are located at 4585 Tillicum Street, Vancouver, British Columbia, V5J 5K9.
PROXY VOTING
The manner in which your shares may be voted by proxy depends on how your shares are held. If you own shares of record, meaning that your shares of Common Stock are represented by certificates or book entries in your name so that you appear as a shareholder on the records of our stock transfer agent, Pacific Stock Transfer Company, a proxy card for voting those shares will be included with this proxy statement. You may vote those shares by completing, signing and returning the proxy card at the following address: Advantage Proxy, 24925 13thPlace South, Des Moines, WA 98198, fax number (206) 870-8492. Scanned copies of signed proxies can also be sent by email toksmith@advantageproxy.com.
If you own shares through a bank or brokerage firm account, you may instead receive a voting instruction form with this proxy statement, which you may use to instruct how your shares should be voted. Just as with a proxy, you may vote those shares by completing, signing and returning the voting instruction form. Many banks and brokerage firms have arranged for Internet or telephonic voting of shares and provide instructions for using those services on the voting instruction form. If your bank or brokerage firm uses Broadridge, you may vote your shares via the Internet atwww.proxyvote.comor by calling the toll-free number on your voting instruction form.
Shares for which proxy cards are properly executed and returned will be voted at the Meeting in accordance with the directions noted thereon or, in the absence of directions, will be voted "FOR" the fixing of the number of directors at five, "FOR" the election of each of the nominees to the Board of Directors, "FOR" the appointment of Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants, as the independent auditor for the current year, “FOR” the resolution approving the compensation awarded by the Company to the named executive officers, and “FOR” the resolution approving the frequency of holding votes to approve the compensation awarded by the Company to the named executive officers. It is not expected that any matters other than those referred to in this Proxy Statement will be brought before the Meeting. If, however, other matters are properly presented, the persons named as proxies will vote in accordance with their discretion with respect to such matters.
All proxy cards must be received by our proxy tabulating agent by no later than 48 hours prior to the time of the Meeting in order to be counted at the meeting.
Broker non-votes occur when a person holding shares through a bank or brokerage account does not provide instructions as to how his or her shares should be voted and the broker does not exercise discretion to vote those shares on a particular matter. Abstentions and broker non-votes will be included in determining the presence of a quorum at the Meeting. However, an abstention or broker non-vote will not have any effect on the outcome for the election of Directors.
ATTENDANCE AND VOTING AT THE MEETING
If you own shares of record, you may attend the Meeting and vote in person, regardless of whether you have previously voted on a proxy card. If you own shares through a bank or brokerage firm account, you may attend the Meeting, but in order to vote your shares at the meeting, you must obtain a "legal proxy" from the bank or brokerage firm that holds your shares. You should contact your account representative to learn how to obtain a "legal proxy." We encourage you to vote your shares in advance of the Meeting date by one of the methods described above, even if you plan on attending the Meeting. You may change or revoke your proxy at the Meeting as described below even if you have already voted.
To be effective, each matter which is to be submitted to a vote of shareholders, other than for the approval of auditors, must be approved by a majority of the votes cast by the shareholders voting in person or by proxy at the Meeting. Every motion put to a vote at the Meeting will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.
REVOCATION OF PROXY
Any shareholder holding shares of record may revoke a previously granted proxy at any time before it is voted by delivering to the Secretary of Viscount a written notice of revocation or a duly executed proxy card bearing a later date or by attending the Meeting and voting in person. Any shareholder holding shares through a bank or brokerage firm may revoke a previously granted proxy or change previously given voting instructions by contacting the bank or brokerage firm, or by obtaining a legal proxy from the bank or brokerage firm and voting at the Meeting.
RECORD DATE AND QUORUM
The board of directors (the “Board”) of the Company have fixed the record date for the Meeting as the close of business on April 23, 2013 (the “Record Date”). Company shareholders of record as at the Record Date are entitled to receive notice of the Meeting and to vote their shares at the Meeting, except to the extent that any such shareholder transfers shares any shares after the Record Date and the transferee of those shares establishes that the transferee owns the shares and demands, not less than ten (10) days before the Meeting, that the transferee’s name be included in the list of shareholders entitled to vote at the Meeting, in which case only such transferee shall be entitled to vote such shares at the Meeting.
On the Record Date, there were 86,733,750 common shares of the Company (the “Common Shares”) issued and outstanding, each share carrying the right to one vote. Only shareholders of record at the close of business on the Record Date will be entitled to vote in person or by Proxy at the Meeting or any adjournment thereof.
Pursuant to a Certificate of Designation, Preferences and Rights of the Series A Convertible Redeemable Preferred Stock (the “Preferred Shares”), dated June 5, 2012, the holders of Preferred Shares will be entitled to vote on any matter submitted to shareholders of the Company and will be entitled to the number of votes for each Preferred Share owned at the Record Date equal to the number of Common Shares that such number of Preferred Shares are convertible into at such time; provided, however, the voting rights of each holder of Preferred Shares will be limited to the right to vote such number of Common Shares as, when aggregated with all other such Common Shares beneficially owned by such holder at such time, would result in such holder beneficially owning no more than 4.99% of all Common Shares then outstanding. The Preferred Shares will vote together with the Common Shares on all matters submitted to holders of Common Shares and not as a separate class. The holders of Preferred Shares will also be entitled to vote as a single class as and to the extent required by law, the Articles of Incorporation, the By-Laws or as otherwise provided in the Certificate of Designation on all matters submitted to holders of Preferred Shares.
2
On the Record Date, there were 1,171.102 Preferred Shares issued and outstanding. The Preferred Shares carry the right to vote the equivalent of 15,051,506 Common Shares. Only shareholders of record at the close of business on the Record Date will be entitled to vote in person or by Proxy at the Meeting or any adjournment thereof.
Under the Company’s articles, the quorum for the transaction of business at the Meeting consists of, subject to the special rights and restrictions attached to the share of any class or series of shares, one person who is a shareholder, or who is otherwise permitted to vote shares of the Company at a meeting of shareholders pursuant to the Company’s articles, represented in person or by proxy.
LEGAL PROCEEDINGS
There are no claims, actions, proceedings or investigations pending against the Company, any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Common Stock, or any associate of any such director, officer, affiliate of the Company, or security holder or, to the knowledge of the Company, threatened against the Company, any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Common Stock, or any associate of any such director, officer, affiliate of the Company, or security holder that, individually or in the aggregate, are material to the Company. Neither the Company nor its assets and properties is subject to any outstanding judgment, order, writ, injunction or decree that has had or would be reasonably expected to have a material adverse effect on the Company.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except as disclosed herein, no person has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in matters to be acted upon at the Meeting other than the election of directors and the appointment of auditors and as set out herein. For the purpose of this paragraph, “Person” shall include each person: (a) who has been a director, senior officer or insider of the Company at any time since the commencement of the Company’s last fiscal year; (b) who is a proposed nominee for election as a director of the Company; or (c) who is an associate or affiliate of a person included in subparagraphs (a) or (b).
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial ownership of the Common Stock as at the Record Date by:
(i) | each person or entity known by Viscount to beneficially own more than 5% of the Common Stock; |
(ii) | each Director of Viscount; |
(iii) | each of the named Executive Officers of Viscount; and |
(iv) | all Directors and executive officers as a group. |
Except as noted below, Viscount believes that the beneficial owners of the Common Stock listed below, based on information furnished by such owners, have sole voting and investment power with respect to such shares.
Title of Class | Name and Address Of Beneficial Owner | Amount of Beneficial Ownership | Percent of Class |
Common | Stephen Pineau British Columbia, Canada President, CEO, CFO, Secretary and Director | 10,256,700(1) | 11.3% |
Common | Robert Liscouski Leesburg, VA Director | 250,000(2) | 0.29% |
3
Common | Paul Goldenberg Cream Ridge, NJ Director | 250,000(2) | 0.29% |
Common | Dennis Raefield Alamo, CA Director | 369,000(2) | 0.42% |
Common | Paul Brisgone Alexandria, VA Director | 250,000(2) | 0.29% |
Common | All directors and officers as a group (5 persons) | 11,375,700 | 12.59% |
(1) | Includes 3,097,500 shares issuable upon exercise of options and 1,000,000 shares issuable upon exercise of share purchase warrants. | |
(2) | Includes 250,000 shares issuable upon exercise of share purchase warrants. |
PROPOSAL 1
ELECTION OF DIRECTORS
The Company proposes to fix the number of directors of the Company at five and to nominate the persons listed below for election as directors. Each director will hold office until the next annual general meeting of the Company or until his or her successor is elected or appointed, unless his or her office is earlier vacated. Management does not contemplate that any of the nominees will be unable to serve as a director. In the event that prior to the Meeting any vacancies occur in the slate of nominees herein listed, it is intended that discretionary authority shall be exercised by the person named in the Proxy as nominee to vote the shares represented by Proxy for the election of any other person or persons as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” FIXING THE NUMBER OF DIRECTORS AT FIVE AND “FOR” THE ELECTION OF EACH NOMINEE.
The following table sets out the names of the management nominees; their positions and offices in the Company; principal occupations; the period of time that they have been directors of the Company; and the number of shares of the Company which each beneficially owns or over which control or direction is exercised.
Name, Residence and Present Position within the Company | Director/Officer Since | Number of Shares Beneficially Owned, Directly or Indirectly, or Over Which Control or Discretion is Exercised | Principal Occupation |
Stephen Pineau Richmond, BC, Canada President, Chief Executive Officer, Chief Financial Officer, Corporate Secretary, Director | July 27, 2001 | 10,256,700(1) | Businessman |
Robert Liscouski Leesburg, VA, USA Director | September 14, 2011 | 250,000(1) | Businessman |
Paul Goldenberg Cream Ridge, NJ, USA Director | October 25, 2011 | 250,000(1) | Businessman |
Dennis Raefield Alamo, CA, USA Director | November 18, 2011 | 350,000(1) | Businessman |
4
Paul Brisgone Alexandria, VA, USA Director | December 2, 2011 | 250,000(1) | Businessman |
(1) | These amounts include beneficial ownership of securities not currently outstanding but which are reserved for immediate issuance on exercise of options and share purchase warrants, in particular, as follows: 4,097,500 shares issuable to Stephen Pineau, 250,000 shares issuable to Robert Liscouski, 250,000 shares issuable to Paul Goldenberg, 250,000 shares issuable to Dennis Raefield, and 250,000 shares issuable to Paul Brisgone. |
Stephen Pineauwas employed at Viscount Communication & Control Systems Inc., a subsidiary of BC Tel, as Marketing Director from 1992-1995. He left Viscount Communication & Control Systems Inc. to start Blue Mountain Technologies Inc., where he held office as President from 1995 to 1997. Blue Mountain Technology Inc. replaced B.C. Tel as the main Vancouver installation company of Viscount products. Since 1997 Mr. Pineau has held office as President of the current Viscount Communication & Control Systems Inc. The Board believes that Mr. Pineau’s expertise and experience, as described above in this paragraph, is valuable to the Board and to the Company. Viscount Communication & Control Systems Inc. is a manufacturer of intercom systems. Blue Mountain Technologies is a service provider of intercom systems.
Robert Liscouskihas been a partner of Secure Strategy Group since July 2009 and was a partner of 3DRS Advisors Inc. Centurion Holdings from February 2005 to February 2010. Mr. Liscouski was also the Assistant Secretary for Infrastructure Protection at the US Department of Homeland Security from March 2003 to February 2005. Mr. Liscouski’s experience makes him a valuable member of the Board. Secure Strategy Group, 3DRS Advisors Inc, and Centurion Holdings provide business services to public and private clients on all facets of business strategy, planning, development, management, marketing, directorship, and obtaining access to capital markets.
Paul Goldenberghas been the Chief Executive Officer of Cardinal Point Strategies since 2001. Mr. Goldenberg’s experience makes him a valuable member of the Board. Cardinal Point Strategies is a consulting firm providing services to the private and public sectors navigating complex risks, identifying practical solutions and managing their implementation of strategies.
Dennis Raefieldwas the Chief Executive Officer of Mace Security International Inc. from August 2008 to August 2011. From April 2007 to August 2008, Mr. Raefield acted as the President of Reach Systems Inc. and from January 2005 to January 2006 acted as the President of Rosslare Security. Mr. Raefield was also the President of Honeywell International Inc. from October 1998 to January 2003. Mr. Raefield’s experience makes him a valuable member of the Board. Mace Security International Inc. manufactures and markets high quality security products including personal defense sprays, home and business electronic security products and central station monitoring. Reach Systems Inc. provides benefits of the convergence of physical and IT security for small and large organizations. Rosslare Security offers a complete range of state-of-the-art solutions for access control. These include access control products including; networked multi-door controllers and NVR integrated systems, standalone door controllers, many readers for various installation environments and technologies, PC monitoring and configuration software as well as a wide range of accessories. Honeywell International Inc. provides security solutions to commercial, industrial, residential and homeland security.
Paul Brisgonewas the President of The Madison Group LLC from December 2008 to December 2011. From February 1974 to December 2008, Mr. Brisgone was a Vice President and a Director of ADT Security Services. Mr. Brisgone’s experience makes him a valuable member of the Board. The Madison Group works with select clients and tailors the work to fit their specific needs, while generating significant ROI for companies in need of government relations strategies. ADT Security Services provide security solutions to commercial, industrial, and residential clients.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires Viscount's directors, executive officers and persons who own more than 10% of a registered class of Viscount's securities to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of Viscount. Directors, executive officers and greater than 10% shareholders are required by SEC regulation to furnish Viscount with copies of all Section 16(a) reports they file.
5
To Viscount's knowledge, based solely on a review of the copies of such reports furnished to Viscount, Viscount believes that during the year ended December 31, 2012, its directors, executive officers and greater than 10% shareholders filed insider reports required under Section 16(a).
DIRECTORS AND EXECUTIVE OFFICERS
The following table contains information regarding the members of the Board and the executive officers of Viscount as of the Record Date:
Name | Age | Position(s) |
Stephen Pineau | 51 | President, Chief Executive Officer, Chief Financial Officer, Secretary and Director |
Robert Liscouski | 58 | Director |
Paul Goldenberg | 58 | Director |
Dennis Raefield | 65 | Director |
Paul Brisgone | 65 | Director |
All of the officers identified above serve at the discretion of the Board and have consented to act as officers of Viscount.
OTHER DIRECTORSHIPS
None of the current directors of the Company serve as directors of other reporting issuers.
RELATIONSHIPS AMONG DIRECTORS OR EXECUTIVE OFFICERS
There are no family relationships among any of the directors or executive officers of Viscount.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The objective of the Company’s compensation program is to compensate the executive officers for their services to the Company at a level that is both in line with the Company’s fiscal resources and competitive with companies at a similar stage of development.
The Company compensates its executive officers based on their skill and experience levels and the existing stage of development of the Company. Executive officers are rewarded on the basis of the skill and level of responsibility involved in their position, the individual’s experience and qualifications, the Company’s resources, industry practice, and regulatory guidelines regarding executive compensation levels.
The Board has implemented three levels of compensation to align the interests of the executive officers with those of the shareholders. First, executive officers are paid a monthly consulting fee or salary. Second, the Board awards executive officers long term incentives in the form of stock options. Finally, and only in special circumstances, the Board may award cash or share bonuses for exceptional performance that results in a significant increase in shareholder value. The Company does not provide medical, dental, pension or other benefits to the executive officers.
The base compensation of the executive officers is reviewed and set annually by the Board. The CEO has substantial input in setting annual compensation levels. The CEO is directly responsible for the financial resources and operations of the Company. In addition, the CEO and Board from time to time determine the stock option grants to be made pursuant to the Company’s Stock Option Plan. Previous grants of stock options are taken into account when considering new grants. The Board awards bonuses at its sole discretion. The Board does not have pre-existing performance criteria or objectives.
6
Compensation for the most recently completed financial year should not be considered an indicator of expected compensation levels in future periods. All compensation is subject to and dependent on the Company’s financial resources and prospects.
Summary Compensation Table
The following table sets forth all information concerning the total compensation of Viscount’s president, chief executive officer, chief financial officer, and the two most highly compensated officer during the last fiscal year (the “Named Executive Officers”) during the last three completed fiscal years for services rendered to Viscount in all capacities:
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) / (#) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
Stephen Pineau President, CEO, CFO | 2012 | $117,000 | Nil | Nil | Nil | Nil | Nil | $10,000(1) | $127,000 |
2011 | $117,000 | Nil | Nil | Nil | Nil | Nil | Nil | $117,000 | |
2010 | $117,000 | Nil | Nil | $210,000/ 3,000,000 warrants(3) | Nil | Nil | $4,000(1) | $331,000 | |
Dennis Raefield(2) COO | 2012 | $32,855 | Nil | Nil | $25,000/ 250,000 warrants(3) | Nil | Nil | Nil | $57,855 |
(1) | These amounts were paid as Director’s Fees. |
(2) | Dennis Raefield was appointed the Chief Operating Officer of the Company on December 12, 2012. |
(3) | Dennis Raefield was granted 250,000 compensation warrants with each warrant exercisable into a common share of the Company at a price of CAD$0.10 per share for a period of 3 years, expiring December 5, 2014. Stephen Pineau was granted 3,000,000 compensation warrants with each warrant exercisable into a common share of the Company at a price of CAD$0.08 per share for a period of 5 years, expiring December 22, 2015. |
Incentive Plan Awards
The Company has no Incentive Plan in place and therefore there were no awards made under any incentive plan to the NEO’s during the Company’s most recently completed financial year. An “Incentive Plan” is a plan providing compensation that depends on achieving certain performance goals or similar conditions within a specified period.
Directors’ Compensation
The following table sets forth the compensation of Viscount’s directors during the last completed fiscal year:
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
Stephen Pineau | $10,000 | Nil | Nil | Nil | Nil | Nil | $10,000 |
Robert Liscouski | $10,000 | Nil | $25,000 | Nil | Nil | Nil | $35,000 |
7
Paul Goldenberg | $14,802 | Nil | $25,000 | Nil | Nil | Nil | $39,802 |
Dennis Raefield | $32,855 | Nil | $25,000 | Nil | Nil | Nil | $57,855 |
Paul Brisgone | $11,160 | Nil | $25,000 | Nil | Nil | Nil | $36,160 |
Directors of Viscount are compensated $10,000 per year and all related travel expenses for services provided as a director or members of committees of the Board. Viscount’s subsidiary paid Stephen Pineau C$$10,000, Dennis Raefield $32,855, Paul Brisgone $11,160 and Paul Goldenberg $14,802 during the year ended December 31, 2012.
GRANTS OF PLAN-BASED AWARDS
DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
During the most recently completed financial year, no incentive stock options were granted to Named Executive Officers and no stock appreciation rights were granted during this period. A stock appreciation right (“SAR”) is a right to receive a payment of cash or an issue or transfer of shares based wholly or in part on changes in the trading price of the Company’s shares.
OUTSTANDING EQUITY AWARDS AT THE MOST RECENTLY COMPLETED FINANCIAL
YEAR
The following table sets forth the outstanding equity awards of Viscount’s Named Executive Officers as at the last completed fiscal year:
Name and Principal Position | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date |
Stephen Pineau President, CEO, CFO, Secretary | 3,000,000 - 2,970,000 | - 127,500 - | Nil Nil Nil | 0.08 0.2166 0.04 | December 23, 2015 December 21, 2013 December 21, 2013 |
8
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table sets out information as of the end of the fiscal year ended December 31, 2012 with respect to compensation plans under which equity securities of the Company are authorized for issuance:
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-Average Exercise Price of Outstanding Options. Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuances Under Equity Compensation Plan [Excluding Securities Reflected in Column (a)] (c) |
Equity Compensation Plans Approved by Security Holders | 8,206,875 | $0.08 | 5,099,655 |
Equity Compensation Plans Not Approved by Security Holders | 9,500,000 | $0.10 | Nil |
Total: | 17,706,875 | 5,099,655 |
The Company issued a total of 6,000,000 compensation warrants to a director and an employee exercisable at a price of $0.08 per share until December 23, 2015, 2,500,000 compensation warrants to an advisor exercisable at a price of $0.15 per share until June 22, 2014, and a total of 1,000,000 compensation warrants to directors exercisable at a price of $0.10 per share until December 5, 2014.
AGGREGATED OPTION/SAR EXERCISES DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION/SAR VALUES
During the fiscal year ended December 31, 2012, no stock options were exercised by the Company’s Named Executive Officers. During this period, no outstanding SARs were held by the Named Executive Officers.
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
None of the directors, executive officers, employees, proposed nominees for election as directors or their associates have been indebted to the Company since the beginning of the last completed financial year.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Except as disclosed herein or above, since the commencement of the Company’s most recent financial year, no informed person (a director, officer or holder of 10% or more common shares) or nominee for election as a director of the Company or any associate or affiliate of any informed person or proposed director had any interest in any transaction which has materially affected or would materially affect the Company or any of its subsidiaries. See “Executive Compensation”.
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
Stephen Pineau – President, Chief Executive Officer, Chief Financial Officer, Secretary and Director: On March 31, 2002, Viscount’s wholly owned subsidiary, Viscount Communication & Control Systems Inc. (“Viscount Communication”), entered into an employment agreement with Mr. Stephen Pineau, pursuant to which Mr. Pineau serves as President and Chief Executive Officer of Viscount Communication. The agreement provides for a current annual base salary of C$117,000. The initial term for Mr. Pineau’s agreement is one year with automatic renewal unless a minimum 30 days notice is given by Viscount Communication. On December 23, 2010, the Company issued Mr. Pineau 1,000,000 compensation warrants with each warrant exercisable into a common share of the Company at a price of $0.24 per share for a period of 5 years from the date of issuance (3,000,000 warrants on a post 3:1 forward-stock-split basis with an exercise price of $0.08 per share).
9
The Company’s policies and procedures for the review, approval, or ratification of any transaction required to be reported are consented to in writing by all the Directors.
STATEMENT OF CORPORATE GOVERNANCE PRACTICE
Corporate governance relates to the activities of the Board, the members of which are elected by and are accountable to the shareholders, and takes into account the role of the individual members of management who are appointed by the Board and charged with the day to day management of the Company. The Canadian Securities Administrators have implemented National Instrument 58-101Disclosure of Corporate Governance Practices, which prescribes certain disclosure by the Corporation of its corporate governance practices. This disclosure is set out in the attached Schedule “A”.
BOARD OF DIRECTORS
The Board is responsible for overseeing management of the Company and determining the Company’s strategy and for determining whether or not a director is independent. In making this determination, the Board has adopted the definition of “independence” as set forth in NI 58-101 and NP 58-201, which recommends that a majority of the board of directors be considered “independent”. In applying this definition, the Board considers all relationships of the directors of the Company, including business, family and other relationships. As at the date of this Proxy Statement and Information Circular, there are five directors on the Board: Stephen Pineau, Robert Liscouski, Paul Goldenberg, Dennis Raefield and Paul Brisgone. Of the five directors, all are considered independent except for Stephen Pineau. Subject to the approval of the proposed slate for election, there will be five directors on the Board, four of whom will be considered independent and one of whom will be considered non-independent.
The Board does not have a written mandate. All roles and responsibilities of the Board are set forth by Stephen Pineau. Stephen Pineau is the President and CEO. Dennis Raefield is the Chief Operating Officer and Chairman of the Audit Committee. We have a 5 member board of directors, of which 3 members are independent directors.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the financial year ended December 31, 2012, there were 12 meetings of the Board. All matters which required approval of the Board were consented to in writing by all Directors.
No director attended fewer than 75% of the aggregate of the total number of meetings of the Board and the total number of meetings held by all committees of the board on which he served. The Company’s has no policies with regard to Board members’ attendance at AGMs. The number of Board members who attended the prior year’s AGM was two, as we only had two Directors.
The Board has established an Audit Committee, a Compensation and Risk Committee, a Nominating Committee, and a Corporate Governance Committee. Each of the Audit Committee, Compensation and Risk Committee, Nominating Committee, and Corporate Governance Committee is responsible to the full Board. The functions performed by these committees are summarized below:
Audit Committee. The Audit Committee considers the selection and retention of independent auditors and reviews the scope and results of the audit. In addition, it reviews the adequacy of internal accounting, financial and operating controls and reviews Viscount's financial reporting compliance procedures. The members of the Audit Committee are Dennis Raefield, Paul Goldenberg, Paul Brisgone, and Robert Liscouski. Dennis Raefield (independent director) is the Chair and the “financial expert” of the Audit Committee. The Audit Committee held one meeting during the most recently completed financial year.
In the course of its oversight of our financial reporting process, the directors have: (1) reviewed and discussed with management our audited financial statements for the year ended December 31, 2012; (2) received a report from Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants, our independent auditors, on the matters required to be discussed by Statement on Auditing Standards No. 61, “Communications with Audit Committees”; (3) received the written disclosures and the letter from the auditors required by Independence Standards Board Statement No. 1, “Independence Discussions with Audit Committee; and (4) considered whether the provision of non-audit services by the auditors is compatible with maintaining their independence and has concluded that it is compatible at this time.
10
Based on the foregoing review and discussions, the Board has concluded that the audited financial statements should be included in our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC.
Submitted by the Audit Committee: |
Dennis Raefield, Chair |
Robert Liscouski, Member |
Paul Goldenberg, Member |
Paul Brisgone, Member |
Compensation and Risk Committee. The Compensation and Risk Committee reviews and approves the compensation of Viscount's officers and reviews and administers Viscount's stock option plans for employees. The Compensation and Risk Committee does not have a charter. The members of the Compensation and Risk Committee are Dennis Raefield, Paul Goldenberg, Paul Brisgone, and Robert Liscouski. Robert Liscouski is the Chair of the Compensation and Risk Committee.
The Compensation and Risk Committee held one meeting during the most recently completed financial year.
Nominating Committee. The Nominating Committee does not have a charter. The members of the Nominating Committee are Dennis Raefield, Paul Goldenberg, Paul Brisgone, and Robert Liscouski.
The Nominating Committee held one meeting during the most recently completed financial year.
Corporate Governance Committee. The Corporate Governance Committee does not have a charter. The members of the Corporate Governance Committee are Dennis Raefield, Paul Goldenberg, Paul Brisgone, and Robert Liscouski.
The Corporate Governance Committee held one meeting during the most recently completed financial year.
COMPENSATION AND RISK COMMITTEE
Composition of the Compensation Committee
The members of the Compensation and Risk Committee during the year ended December 31, 2012 were Dennis Raefield, Paul Goldenberg, Paul Brisgone, and Robert Liscouski. Robert Liscouski acted as the Chair of the Compensation and Risk Committee. All decisions regarding compensation are written and subject to approval by all directors.
Compensation and Risk Committee Interlocks and Insider Participation
None of the members of the Compensation and Risk Committee served as an employee of the Company during the fiscal year ended December 31, 2012 (or subsequently). Other than Dennis Raefield, who is the Chief Operating Officer of the Company, no current member of the Compensation and Risk Committee formerly served as an officer of the Company, and none of the current members of the Compensation and Risk Committee have entered into a transaction with the Company in which they had a direct or indirect interest that is required to be disclosed pursuant to Item 404 of Regulation S-K.
Compensation Committee Report
The Board has not prepared a report on executive compensation at this time.
The Compensation and Risk Committee hereby reports to the Board that, in connection with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and this Proxy Statement, we have:
- reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of SEC Regulation S-K; and
- based on such review and discussion, we recommend to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement on Schedule 14A.
11
Submitted by the Compensation Committee: |
Robert Liscouski, Chair |
Dennis Raefield, Member |
Paul Goldenberg, Member |
Paul Brisgone, Member |
AUDIT COMMITTEE
Pursuant to the British Columbia Instrument 51-509Issuers Quoted in the U.S. Over-the Counter Marketsand National Instrument 52-110Audit Committeesof the Canadian Securities Administrators, the Company is required to disclose annually in its Information Circular certain information concerning the constitution of its audit committee and its relationship with its independent auditor, as set forth in the following:
The primary function of the audit committee (the “Committee”) is to assist the Board in fulfilling its financial oversight responsibilities by reviewing (a) the financial reports and other financial information provided by the Company to regulatory authorities and shareholders; (b) the systems for internal corporate controls which have been established by the Board and management; and (c) overseeing the Company’s financial reporting processes generally. In meeting these responsibilities the Committee monitors the financial reporting process and internal control system; reviews and appraises the work of external auditors and provides an avenue of communication between the external auditors, senior management and the Board. The Committee is also mandated to review and approve all material related party transactions.
The Audit Committee’s Charter
The Company has adopted a Charter of the Audit Committee of the Board of Directors, a copy of which is annexed hereto as Schedule “B”.
Composition of the Audit Committee
The Committee is comprised of Dennis Raefield, Paul Goldenberg, Paul Brisgone, and Robert Liscouski. All of the Committee members are considered to be financially literate in that each committee member has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company’s financial statements.
Relevant Education and Experience
Robert Liscouski has an understanding of the accounting principles used by the Company to prepare its financial statements.
Paul Goldenberg has an understanding of the accounting principles used by the Company to prepare its financial statements.
Dennis Raefield has an understanding of the accounting principles used by the Company to prepare its financial statements.
Paul Brisgone has an understanding of the accounting principles used by the Company to prepare its financial statements.
Audit Committee Financial Expert
Dennis Raefield is the Chair and the “financial expert” of the Audit Committee.
Audit Committee Oversight
Since the commencement of the Company’s most recently completed financial year, the Board has not failed to adopt a recommendation of the Committee to nominate or compensate an external auditor.
12
Reliance on Certain Exemptions
The Company has not relied on the exemptions contained in sections 2.4 or 8 of NI 52-110. Section 2.4 provides an exemption from the requirement that the audit committee must pre-approve all non-audit services to be provided by the auditor, where the total amount of fees related to the non-audit services are not expected to exceed 5% of the total fees payable to the auditor in the fiscal year in which the non-audit services were provided. Section 8 permits a company to apply to a securities regulatory authority for an exemption from the requirements of NI 52-110, in whole or in part.
Pre-Approval Policies and Procedures
The Committee has not adopted specific policies and procedures for the engagement of non-audit services. Subject to the requirements of NI 52-110, the engagement of non-audit services is considered by the Board, and where applicable the Committee, on a case-by-case basis.
External Auditor Service Fees
In the following table, “audit fees” are fees billed by the Company’s external auditor for services provided in auditing the Company’s annual financial statements for the subject year. “Audit-related fees” are fees not included in audit fees that are billed by the auditor for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements. “Tax fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.
The fees paid by the Company to its auditor in each of the last two fiscal years, by category, are as follows:
Fees | 2011 | 2012 |
Audit fees | C$60,000 | C$65,000 |
Audit related fees | Nil | Nil |
Tax fees | C$6,500 | C$6,500 |
All other fees | Nil | Nil |
These audit fees were for the audit of the fiscal year ended December 31, 2012. The tax fees were for the preparation of U.S. and Canadian tax filing period ending December 31, 2012.
Exemption
The Company is relying on the exemption provided by section 6.1 of NI 52-110 which provides that the Company is not required to comply with Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110, in accordance with BCI 51-509.
INDEPENDENT PUBLIC ACCOUNTANTS
Dale Matheson Carr-Hilton LaBonte LLP (“DMCL”) was appointed as Viscount's independent auditors on August 12, 2009, and have been appointed by the Board to continue as Viscount's independent auditor for Viscount's fiscal year ending December 31, 2013.
The principal accountant at DMCL is Reginald LaBonte. He is expected to be present at the Meeting and has the opportunity to make statements and is expected to be available to respond to questions.
13
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Although the appointment of DMCL is not required to be submitted to a vote of the stockholders, the Board believes it appropriate as a matter of policy to request that the stockholders ratify the appointment of the independent public accountant for the fiscal year ending December 31, 2013. In the event a majority of the votes cast at the meeting are not voted in favor of ratification, the adverse vote will be considered as a direction to the Board to select other auditors for the fiscal year ending December 31, 2014.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE APPOINTMENT OF DALE MATHESON CARR-HILTON LABONTE LLP, CHARTERED ACCOUNTANTS, AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2013.
PROPOSAL 3
ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires that the Company seek a non-binding advisory vote from its shareholders to approve the compensation of our Named Executive Officers as disclosed in this proxy statement.
The Company seeks to provide our executives with appropriate incentives to drive the success of our business. We strive to design programs that are performance-based and that encourage executives to further the overall business strategy of the company. We provide compensation that is competitive to retain high-quality executives to produce successful results for shareholders.
The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our Named Executive Officers, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC. We believe that the Company’s Named Executive Officer compensation programs have been effective at appropriately aligning pay and performance and in enabling the Company to attract and retain very talented executives within our industry.
The vote on this resolution is advisory and therefore not binding on the Company, the Compensation and Risk Committee or the Board. Although the vote is non-binding, the Compensation and Risk Committee will review the voting results in connection with the on-going evaluation of the Company’s compensation programs.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE COMPENSATION AWARDED BY THE COMPANY TO THE NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THE DISCLOSURES IN THIS PROXY STATEMENT AS REQUIRED BY THE RULES OF THE SECURITIES AND EXCHANGE COMMISSION.
PROPOSAL 4
FREQUENCY OF ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Act also states that the shareholders of the Company may cast an advisory vote on how frequently they would like an advisory vote on the compensation of our Named Executive Officers to be held. This non-binding, advisory vote provides shareholders the opportunity to indicate whether they prefer an advisory vote on Named Executive Officers compensation once every one (1), two (2), or three years (3) (or to abstain from voting). We are required under the Dodd-Frank Act to solicit shareholder preferences regarding the frequency of future advisory votes on executive compensation at least once every six (6) years.
The Board believes that shareholders should consider our executive compensation, together with our corresponding long-term results, once every three (3) years, as that will promote stability and is consistent with the long-term approach the Board takes in overseeing the business and management of our Company and prevents long-term objectives from being undermined by short term issues in the marketplace. In addition, a three-year cycle will allow the Board and the Compensation Committee sufficient time to thoughtfully evaluate and respond to shareholder input and effectively implement any changes to the Company’s executive compensation program.
14
Because the vote is advisory and not binding on the Board, it may decide that it is in the best interests of our Company and its shareholders to hold an advisory vote on executive compensation more or less frequently than the option approved by the shareholders.
If a quorum is present at the meeting, the frequency of vote option (one (1), two (2), or three years (3)) receiving the highest number of votes will be adopted. Each common share is entitled to one vote on this proposal. For the purposes of the vote on this proposal, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL OF THREE YEARS.AS THE FREQUENCY OF FUTURE SHAREHOLDER ADVISORY VOTES ON EXECUTIVE COMPENSATION.
SHAREHOLDER COMMUNICATIONS
Shareholders can send communications to the Board by email atinvestors@viscount.comor through our website atwww.viscount.com.
OTHER MATTERS
As of the date of this circular, management knows of no other matters to be acted upon at the 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 judgment of the persons voting the shares represented by the Proxy.
PROPOSALS OF SHAREHOLDERS
Proposals which shareholders wish to be considered for inclusion in the Proxy Statement and proxy card for the 2014 Annual Meeting of Shareholders must be received by the Secretary of Viscount by December 1, 2013 and must comply with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended.
In addition, Viscount's Bylaws include advance notice provisions that require shareholders desiring to bring nominations or other business before an annual shareholders meeting to do so in accordance with the terms of the advance notice provisions. These advance notice provisions require that, among other things, shareholders give timely written notice to the Secretary of Viscount regarding such nominations or other business. To be timely, a notice must be delivered to the Secretary at the principal executive offices of Viscount not more than 90, but not less than 60, days prior to the date of the Annual Meeting.
Accordingly, a shareholder who intends to present a nomination or proposal at the 2014 Annual Meeting of Shareholders without inclusion of the proposal in Viscount's proxy materials must provide written notice of the nominations or other business they wish to propose to the Secretary no later than December 1, 2013. Viscount reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.
ANNUAL REPORT ON FORM 10-K
A COPY OF VISCOUNT'S COMBINED ANNUAL REPORT TO SHAREHOLDERS AND ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2012 ACCOMPANIES THIS PROXY STATEMENT AND IS IN THE FORM ANNEXED TO THE PROXY STATEMENT. AN ADDITIONAL COPY WILL BE FURNISHED WITHOUT CHARGE TO BENEFICIAL SHAREHOLDERS OR SHAREHOLDERS OF RECORD UPON REQUEST TO INVESTOR RELATIONS, VISCOUNT SYSTEMS, INC. SUITE 4585 TILLICUM STREET, BURNABY, BRITISH COLUMBIA, CANADA, V5J 5K9 OR BY CALLING (604) 327-9446.
15
ADDITIONAL INFORMATION
Additional information relating to the Company is available on the SEDAR website atwww.sedar.com.
Dated at Vancouver, British Columbia, this 23rdday of April, 2013.
BY ORDER OF THE BOARD OF DIRECTORS |
/s/ Stephen Pineau |
Stephen Pineau |
President, Chief Executive Officer, Chief Financial Officer, |
Secretary and Director |
16
Schedule “A”
Statement of Corporate Governance Disclosure
The following description of the governance practices of the Company is provided in accordance with the guidelines of applicable securities laws (the “Guidelines”). The Guidelines address matters relating to independence of directors, the functions to be performed by the directors of a company and their committees and effectiveness and evaluation of proposed corporate governance guidelines and best practices specified by the Canadian securities regulators. The directors of the Company will continue to monitor the developments and the various changes to the proposed corporate governance guidelines and best practices and where applicable will amend its corporate governance guidelines accordingly.
Guideline | The Governance Disclosure of the Company | ||
1. | Board of Directors | ||
Disclose how the Board of Directors (the “Board”) facilitates its exercise of independent supervision over management, including | The Board consists of five directors, of whom four are independent. Stephen Pineau is the President, Chief Executive Officer, Chief Financial Officer, and Corporate Secretary of the Company, and as such, not independent. | ||
(i) | the identity of directors that are independent, and | ||
(ii) | the identity of directors who are not independent, and the basis for that determination. | The Board facilitates its exercise of independent supervision over management by meeting or having discussions without management present whenever it is deemed necessary and by requiring all significant operational decisions to be approved by the Board. | |
2. | Directorships | ||
If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer. | The directors of the Company are directors of the following reporting issuers set opposite their names: | ||
Stephen Pineau – None | |||
Robert Liscouski - None | |||
Paul Goldenberg - None | |||
Dennis Raefield - None | |||
Paul Brisgone - None | |||
3. | Orientation and Continuing Education | ||
Describe what steps, if any, the Board takes to orient new Board members, and describe any measures the Board takes to provide continuing education for directors. | Orientation of new members of the Board is conducted informally by management and members of the Board. The Corporation has not adopted formal policies respecting continuing education for Board members. | ||
4. | Ethical Business Conduct | ||
Describe what steps, if any, the Board takes to encourage and promote a culture of ethical business conduct. | The Board has not adopted a formal code of business conduct and ethics. The Board is of the view that the fiduciary duties placed on individual directors by the Corporation’s governing legislation and common law together with corporate statutory restrictions on an individual director’s participation in Board decisions in which the director has an interest are sufficient to ensure that the Board operates independently of management and in the best interests of the Corporation. |
17
5. | Nomination of Directors | ||
Disclose what steps, if any, are taken to identify new candidates for Board nomination, including: | The Board considers its size each year when it considers the number of directors to recommend to the shareholders for election at the annual general meting. The Board takes in to account the number of directors required to carry out the Board’s duties effectively and to maintain diversity of views and experience. | ||
(i) | who identifies new candidates, and | ||
(ii) | the process of identifying new candidates. | ||
The Board has not established a nominating committee and this function is currently performed by the Board as a whole. | |||
6. | Compensation | ||
Disclose what steps, if any, are taken to determine compensation for the directors and CEO, including: | Members of the Board are not compensated for acting as directors. The Board as a whole determines the stock option grants for each director. Board members review the compensation of the senior officers on an annual basis to ensure that it is competitive. | ||
(i) | who determines compensation, and | ||
(ii) | the process of determining compensation. | ||
7. | Other Board Committees | ||
If the Board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe their function. | The Board is satisfied that, in view of the size and composition of the Board, it is more efficient and cost effective for the full board to perform the duties that would be required by standing committees, other than the audit and compensation committees. | ||
8. | Assessments | ||
Disclose what steps, if any, that the Board takes to satisfy itself that the Board, its committees, and its individual directors are performing effectively. | The Board annually, and at such other times as it deems appropriate, reviews the performance and effectiveness of the Board, the directors and its committees to determine whether changes in size, personnel or responsibilities are warranted. To assist in its review, the Board conducts informal surveys of its directors and receives reports from each committee respecting its own effectiveness. As part of the assessments, the Board or the individual committee may review their respective mandate or charter and conduct reviews of applicable corporate policies. |
18
Schedule “B”
Charter of the Audit Committee of the Board of Directors
of Viscount Systems, Inc. (the “Company”)
Mandate
The primary function of the Audit Committee (“Committee”) is to assist the Board of Directors in fulfilling its financial oversight responsibilities by reviewing the following: (a) the financial reports and other financial information provided by the Company to regulatory authorities and shareholders; (b) the Company’s systems of internal controls regarding finance and accounting and the Company’s auditing, accounting; and (c) financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Company’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to (i) serve as an independent and objective party to monitor the Company’s financial reporting and internal control system and review the Company’s financial statements; (ii) review and appraise the performance of the Company’s external auditors; (iii) provide an open avenue of communication among the Company’s auditors, financial and senior management and the board of directors; and (iv) to ensure the highest standards of business conduct and ethics.
Board of Directors as Initial Audit Committee
The Committee will be initially comprised of the full Board of Directors. Where the Committee comprises the full Board of Directors, the provisions of this Charter concerning composition, meetings outside the presence of management, pre-approvals, and reporting of the Committee to the Board of Directors will not be applicable.
Composition
When required under applicable Canadian or United States securities policies or at the discretion of the Board of Directors, presuming the Board of Directors has sufficient membership, the Committee will be comprised of three directors, all of whom shall be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.
All members of the Committee shall have accounting or related financial management expertise. Notwithstanding the foregoing, a member of the Committee who is not financially literate may be appointed to the Committee provided that such member becomes financially literate within a reasonable period of time following his or her appointment. For the purposes of the Company’s Charter, the definition of “financially literate” is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company’s financial statements.
The members of the Committee shall be elected by the board of directors at its first meeting following the annual shareholders’ meeting. Unless a Chair is elected by the full board of directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.
Meetings
The Committee shall meet at least twice annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Executive Officer and/or the Chief Financial Officer and the external auditors in separate sessions.
19
Responsibilities and Duties
To fulfill its responsibilities and duties, the Committee shall:
Documents/Reports Review
(a) | Review and update this Charter annually. | |
(b) | Review the Company’s financial statements, MD&A, any annual and interim earnings statements and press releases before the Company publicly discloses this information and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion or review rendered by the external auditors. |
External Auditors
(a) | Review annually the performance of the external auditors who shall be ultimately accountable to the board of directors and the Committee as representatives of the shareholders of the Company. | ||
(b) | Obtain annually a formal written statement of external auditors setting forth all relationships between the external auditors and the Company. | ||
(c) | Review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors. | ||
(d) | Take or recommend that the full board of directors take appropriate action to oversee the independence of the external auditors. | ||
(e) | Recommend to the board of directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval. | ||
(f) | At each meeting, consult with the external auditors, without the presence of management, about the quality of the Company’s accounting principles, internal controls and the completeness and accuracy of the Company’s financial statements. | ||
(g) | Review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Company. | ||
(h) | Review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements. | ||
(i) | Review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Company’s external auditors. The pre-approval requirement is waived with respect to the provision of non-audit services if: | ||
i. | the aggregate amount of all such non-audit services provided to the Company constitutes not more than 5% of the total amount of fees paid by the Company to its external auditors during the fiscal year in which the non-audit services are provided; | ||
ii. | such services were not recognized by the Company at the time of the engagement to be non-audit services; and | ||
iii. | such services are promptly brought to the attention of the Committee by the Company and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Committee. |
Provided the pre-approval of the non-audit services is presented to the Committee’s first scheduled meeting following such approval such authority may be delegated by the Committee to one or more independent members of the Committee.
20
Financial Reporting Processes
(a) | In consultation with the external auditors, review with management the integrity of the Company’s financial reporting process, both internal and external. | |
(b) | Consider the external auditor’s judgments about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting. | |
(c) | Consider and approve, if appropriate, changes to the Company’s auditing and accounting principles and practices as suggested by the external auditors and management. | |
(d) | Review significant judgments made by management in the preparation of the financial statements and the view of the external auditors as to appropriateness of such judgments. | |
(e) | Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information. | |
(f) | Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements. | |
(g) | Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented. | |
(h) | Review certification process for certificates required under National Instrument 52-109 and Section 302(a) of the Sarbanes-Oxley Act. | |
(i) | Establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. |
Other
a) | Review any related party transactions. | ||
b) | Review reports from persons regarding any questionable accounting, internal accounting controls or auditing matters (“Concerns”) relating to the Company such that: | ||
i. | an individual may confidentially and anonymously submit their Concerns to the Chairman of the Committee in writing, by telephone, or by e-mail; | ||
ii. | the Committee reviews as soon as possible all Concerns and addresses same as they deem necessary; and | ||
iii. | the Committee retains all records relating to any Concern reported by an individual for a period the Committee judges to be appropriate. |
All of the foregoing in a manner that the individual submitting such Concerns shall have no fear of adverse consequences.
21
VISCOUNT SYSTEMS, INC.
(the “Company”)
This form of proxy is solicited by management of the Companyand will be used at the Annual General Meeting of the holders of Common Stock and Series A Convertible Redeemable Preferred Stock of the Company to be held on May 28, 2013 at 10:00 a.m. (Pacific Standard Time).
The undersigned shareholder of Common Stock of Viscount Systems, Inc., hereby appoints Stephen Pineau, President of the Company, or in the place of the foregoing the following person ___________________________(insert name), with full power of substitution in each, as proxyholder to cast all votes which the undersigned shareholder is entitled to cast at the Annual General Meeting of Shareholders to be held at 10:00 a.m. (Pacific Standard Time) on Tuesday, May 28, 2013, at 4585 Tillicum Street, Burnaby, British Columbia, V5J 5K9, or any adjournment or postponement thereof, with authority to vote upon the matters set forth on this Proxy Card.
BY SIGNING AND DATING THIS PROXY CARD, YOU AUTHORIZE THE PROXYHOLDER TO VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED, TO VOTE “FOR” EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Company’s Proxy Statement and hereby revokes any proxy or proxies previously given.
IMPORTANT – PLEASE SIGN AND RETURN YOUR COMPLETED
PROXY CARD PROMPTLY. YOUR VOTE IS IMPORTANT!
Please mark your votes as indicated in this example: [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE BELOW ITEMS.
Item 1– The number of Directors be fixed at five.
FOR | AGAINST |
[ ] | [ ] |
Item 2– The election of Directors to serve until the next Annual Meeting of Shareholders as provided in the Articles of Incorporation, or until his or her successor is duly elected and qualified.
NOMINEE: | Stephen Pineau |
FOR | WITHHOLD |
[ ] | [ ] |
NOMINEE: | Robert Liscouski |
FOR | WITHHOLD |
[ ] | [ ] |
NOMINEE: | Paul Goldenberg |
FOR | WITHHOLD |
[ ] | [ ] |
NOMINEE: | Dennis Raefield |
FOR | WITHHOLD |
[ ] | [ ] |
NOMINEE: | Paul Brisgone |
FOR | WITHHOLD |
[ ] | [ ] |
Item 3– The ratification of the appointment of Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants as the independent auditor for the year ending December 31, 2013.
FOR | WITHHOLD |
[ ] | [ ] |
Item 4– The approval, on an advisory basis, of the compensation of the Company’s Named Executive Officers as disclosed in the Company’s proxy statement dated April 30, 2013.
FOR | AGAINST |
[ ] | [ ] |
Item 5– The approval, on an advisory basis, of the frequency of holding future advisory votes on the compensation of the Company’s Named Executive Officers.
FOR | AGAINST |
[ ] | [ ] |
Item 6- The proxyholder be granted authority to vote at his/her discretion on any amendment or variation to the previous resolutions or any other matter that may be properly brought before the said Meeting or any adjournment thereof.
FOR | AGAINST |
[ ] | [ ] |
All of the proposals set forth above are proposals of the Company. None of the proposals are related to or conditioned upon approval of any other proposal.
THIS PROXY MUST BE SIGNED AND DATED BELOW:
REGISTERED HOLDER SIGN HERE: _________________________________________
PRINT NAME HERE: ______________________________________________________
DATE SIGNED: __________________________________________________________
NUMBER OF SHARES VOTED:______________________________________________
Please sign above exactly as your name appears on this Proxy Card. If shares are registered in more than one name, the signatures of all such persons are required. A corporation should sign in its full corporate name by a duly authorized officer, stating his/her title. A corporation must attach a copy of the corporate resolution authorizing the duly authorized officer to sign this Proxy Card. Trustees, guardians, executors and administrators should sign in their official capacity, giving their full title as such and attaching documentation supporting their authority to sign. If a partnership, please sign in the partnership name by authorized person(s) and attach a partnership resolution.
2
All proxies must be received by the tabulating agent not less than forty-eight (48) hours, excluding Saturdays, Sundays, and holidays,prior to the time of the meeting in order to be counted.The address for the tabulating agent is as follows: Advantage Proxy, 24925 13thPlace South, Des Moines, Washington, 98198, or fax number (206) 870-8492. Scanned copies of signed proxies can also be sent by email to ksmith@advantageproxy.com.
THANK YOU FOR VOTING.
3
VISCOUNT SYSTEMS, INC.
(the “Company”)
This form of proxy is solicited by management of the Companyand will be used at the Annual General Meeting of the holders of Common Stock and Series A Convertible Redeemable Preferred Stock (“Series A Shares”) of the Company to be held on May 28, 2013 at 10:00 a.m. (Pacific Standard Time).
The undersigned holder of Series A Shares of the Company, hereby appoints Stephen Pineau, President of the Company, or in the place of the foregoing the following person ___________________________(insert name), with full power of substitution in each, as proxyholder to cast all votes which the undersigned shareholder is entitled to cast at the Annual General Meeting of Shareholders to be held at 10:00 a.m. (Pacific Standard Time) on Tuesday, May 28, 2013, at 4585 Tillicum Street, Burnaby, British Columbia, V5J 5K9, or any adjournment or postponement thereof, with authority to vote upon the matters set forth on this Proxy Card.
The undersigned acknowledges that it is entitled to the number of votes for each Series A Share owned as at April 23, 2013 equal to the number of Common Stock that such number of Series A Shares are convertible into at such time; provided, however, the voting rights of each holder of Series A Shares will be limited to the right to vote such number of Common Stock as, when aggregated with all other such Common Stock beneficially owned by such holder at such time, would result in such holder beneficially owning no more than 4.99% of all Common Stock then outstanding.
BY SIGNING AND DATING THIS PROXY CARD, YOU AUTHORIZE THE PROXYHOLDER TO VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED, TO VOTE “FOR” EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Company’s Proxy Statement and hereby revokes any proxy or proxies previously given.
IMPORTANT – PLEASE SIGN AND RETURN YOUR COMPLETED
PROXY CARD PROMPTLY. YOUR VOTE IS IMPORTANT!
Please mark your votes as indicated in this example: [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE BELOW ITEMS.
Item 1– The number of Directors be fixed at five.
FOR | AGAINST |
[ ] | [ ] |
Item 2– The election of Directors to serve until the next Annual Meeting of Shareholders as provided in the Articles of Incorporation, or until his or her successor is duly elected and qualified.
NOMINEE: | Stephen Pineau |
FOR | WITHHOLD |
[ ] | [ ] |
NOMINEE: | Robert Liscouski |
FOR | WITHHOLD |
[ ] | [ ] |
NOMINEE: | Paul Goldenberg |
FOR | WITHHOLD |
[ ] | [ ] |
NOMINEE: | Dennis Raefield |
FOR | WITHHOLD |
[ ] | [ ] |
NOMINEE: | Paul Brisgone |
FOR | WITHHOLD |
[ ] | [ ] |
Item 3– The ratification of the appointment of Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants as the independent auditor for the year ending December 31, 2013.
FOR | WITHHOLD |
[ ] | [ ] |
Item 4– The approval, on an advisory basis, of the compensation of the Company’s Named Executive Officers as disclosed in the Company’s proxy statement dated April 30, 2013.
FOR | AGAINST |
[ ] | [ ] |
Item 5– The approval, on an advisory basis, of the frequency of holding future advisory votes on the compensation of the Company’s Named Executive Officers.
FOR | AGAINST |
[ ] | [ ] |
Item 6- The proxyholder be granted authority to vote at his/her discretion on any amendment or variation to the previous resolutions or any other matter that may be properly brought before the said Meeting or any adjournment thereof.
FOR | AGAINST |
[ ] | [ ] |
All of the proposals set forth above are proposals of the Company. None of the proposals are related to or conditioned upon approval of any other proposal.
THIS PROXY MUST BE SIGNED AND DATED BELOW:
REGISTERED HOLDER SIGN HERE: _____________________________________
PRINT NAME HERE: __________________________________________________
DATE SIGNED: ______________________________________________________
NUMBER OF SHARES VOTED:__________________________________________
Please sign above exactly as your name appears on this Proxy Card. If shares are registered in more than one name, the signatures of all such persons are required. A corporation should sign in its full corporate name by a duly authorized officer, stating his/her title. A corporation must attach a copy of the corporate resolution authorizing the duly authorized officer to sign this Proxy Card. Trustees, guardians, executors and administrators should sign in their official capacity, giving their full title as such and attaching documentation supporting their authority to sign. If a partnership, please sign in the partnership name by authorized person(s) and attach a partnership resolution.
All proxies must be received by the tabulating agent not less than forty-eight (48) hours, excluding Saturdays, Sundays, and holidays,prior to the time of the meeting in order to be counted.The address for the tabulating agent is as follows: Morton Law LLP #1200 – 750 West Pender Street, Vancouver, British Columbia, V6C 2T8. Scanned copies of signed proxies can also be sent by email to elm@mortonlaw.ca.
THANK YOU FOR VOTING.