RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
NOVEMBER 12, 2001
MANAGEMENT INFORMATION CIRCULAR
SOLICITATION OF PROXIES
The information contained in this circular is furnished in connection with
the solicitation by management of Rtica Corporation (the "Corporation") of
proxies to be used at the Annual and Special Meeting of the Shareholders of the
Corporation (the "Meeting") to be held on MONDAY, THE 12TH DAY OF NOVEMBER, 2001
at 4:00 p.m. (Toronto Time) at the place and for the purposes set forth in the
accompanying Notice of Annual and Special Meeting ("Notice of Meeting") and at
any adjournment thereof.
THE SOLICITATION OF PROXIES IS MADE ON BEHALF OF THE MANAGEMENT OF THE
CORPORATION. The costs incurred in the preparation and mailing of the form of
proxy, Notice of Meeting and this Management Information Circular will be borne
by the Corporation. In addition to the use of mails, proxies may be solicited
personally or by telephone by directors, officers and employees of the
Corporation, who will not be remunerated therefor. The cost of the solicitation
will be borne by the Corporation.
APPOINTMENT AND REVOCATION OF PROXIES
A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON OR CORPORATION (WHO NEED
NOT BE A SHAREHOLDER) TO REPRESENT HIM AT THE MEETING OTHER THAN THE PERSONS
DESIGNATED IN THE ENCLOSED PROXY FORM and may do so either by inserting the name
of his chosen nominee in the space provided for that purpose on the form and
striking out the other names on the form, or by completing another proper form
of proxy. In any case, the form of proxy should be dated and executed by the
shareholder or his attorney authorized in writing, or if the shareholder is a
corporation, under its corporate seal or by an officer or attorney thereof duly
authorized.
A form of proxy will not be valid for the Meeting or any adjournment
thereof unless it is deposited with Equity Transfer Services Inc., 120 Adelaide
Street West, Suite 420, Toronto, Ontario M5H 4C3 not later than 48 hours
(excluding Saturdays and holidays) before the time for the holding of the
Meeting or any adjournment thereof.
Pursuant to Section 110(4) of the Ontario Business Corporations Act, a
shareholder who has given a proxy may revoke the proxy: (a) by completing and
signing a proxy bearing a later date and depositing it as aforesaid: or (b) by
depositing an instrument in writing executed by him or by his attorney
authorized in writing (i) at the registered office of the Corporation at any
time up to and including the last business day preceding the day of the
applicable meeting, or any adjournment thereof, at which the proxy is to be
used, or (ii) with the chairman of the applicable meeting prior to the
commencement of such meeting on the day of such meeting or any adjournment
thereof; or (c) in any other manner permitted by law.
VOTING OF PROXIES
All of the persons named in the enclosed form of proxy, who are officers
and directors of the Corporation, have indicated their willingness to represent
as proxy the shareholder who appoints them. Each shareholder may instruct his
proxy how to vote his shares by completing the blanks on the proxy form.
UNLESS OTHERWISE INSTRUCTED IN THE PROXY FORM, THE PROXY WILL BE VOTED IN
RESPECT OF THE ELECTION OF DIRECTORS, THE APPOINTMENT OF AUDITORS AND IN FAVOUR
OF THE RESOLUTION TO AMEND THE STOCK OPTION PLAN AND THE ADVANCE APPROVAL OF
PRIVATE PLACEMENTS AS SET FORTH UNDER "PARTICULARS OF MATTERS TO BE ACTED ON."
THE ENCLOSED FORM OF PROXY CONFERS DISCRETIONARY AUTHORITY UPON THE PERSONS
NAMED THEREIN WITH RESPECT TO AMENDMENTS AND VARIATIONS TO MATTERS IDENTIFIED IN
THE NOTICE OF MEETING AND WITH RESPECT TO ANY OTHER MATTERS WHICH MAY PROPERLY
COME BEFORE THE MEETING. At the date of this Circular, management of the
Corporation knows of no such amendments, variations or other matters to come
before the Meeting.
Proxies received by management will be voted at the meeting of the
Corporation or any adjournment thereof specified therein by the person giving
the Proxy. TO THE EXTENT NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR
MANAGEMENT'S PROPOSALS AS STATED UNDER THE HEADINGS RELATING TO THESE MATTERS IN
THIS INFORMATION CIRCULAR. ALL PROXIES SUBMITTED, REGARDLESS OF HOW VOTED, WILL
BE INCLUDED FOR PURPOSES OF DETERMINING WHETHER A QUORUM IS PRESENT FOR THE
MEETING. Management's proposals have been approved by the Board of Directors. A
quorum is required in order for the meeting to be properly constituted. The
presence in person or by proxy of the holders of 15% of the outstanding shares
of the Corporation is required to constitute a quorum at the meeting. All
matters being proposed at the meeting will require the affirmative vote of a
majority of votes cast at the meeting in order to be approved.
ADVICE TO BENEFICIAL SHAREHOLDERS
Shareholders who do not hold their Common Shares in their own name (the
"Beneficial Shareholders") are advised that only proxies from shareholders of
record can be recognized and voted upon at the Meeting. Beneficial Shareholders
who complete and return a proxy must indicate thereon the person (usually a
brokerage house) who hold their shares as registered shareholder. Every
intermediary (i.e. broker) has its own mailing procedures and provides its own
return instructions, which should be carefully followed. The form of proxy
supplied to Beneficial Shareholders is identical to that provided to registered
shareholders. However, its purpose is limited to instructing the registered
shareholders how to vote on behalf of the Beneficial Shareholders.
All references to shareholders in this Management Information Circular and
the accompanying form of proxy and Notice of Meeting are to shareholders of
record unless specifically stated otherwise. Where documents are stated to be
available for review or inspection, such items will be shown upon request to
registered shareholders who produce proof of their identity.
FINANCIAL STATEMENTS
The Annual Report, the Financial Statements of the Corporation for the year
ended May 31, 2001 and the
2
Auditors Report thereon accompanying this Management Information Circular will
be placed before the shareholders at the Meeting for their consideration.
3
Under National Policy 41, adopted by the Canadian Securities Administrators, a
person or Corporation who in the future wishes to receive interim financial
statements from the Corporation must deliver a written request for such material
to the Corporation, together with a signed statement that the person or
Corporation is the owner of securities (other than debt instruments) of the
Corporation. Shareholders who wish to receive interim financial statements are
encouraged to send the enclosed notice to the Corporation or its Transfer Agent.
VOTING SHARES
The authorized capital of the Corporation consists of an unlimited number
of Common Shares, of which 34,052,636 are issued and outstanding, and an
unlimited number of Preferred Shares, none of which are currently outstanding.
The directors have fixed the close of business on October 1, 2001 as the
record date for the Meeting. Only shareholders of record as at the close of
business on October 1, 2001 are entitled to receive notice of and to attend and
vote at the Meeting except that a transferee of shares acquired after that date
shall be entitled to vote at the Meeting if such transferee produces properly
endorsed certificates for such shares or otherwise establishes ownership of such
shares and has demanded not later than 10 days before the Meeting that the name
of such transferee be included in the list of shareholders entitled to vote at
the Meeting. Holders of Common Shares are entitled to one vote at the Meeting
for each Common Share held.
Shareholder proposals to be presented at next year's Annual Meeting in
November, 2002 must be presented at the Corporation's office, 999 Barton Street,
Stoney Creek, Ontario L8E 5H4, no later than August 15, 2002.
PRINCIPAL SHAREHOLDERS
To the knowledge of the directors and senior officers of the Corporation,
the following are the only persons or companies who beneficially own, directly
or indirectly, or exercise control or direction over voting securities carrying
more than 10% of the voting rights attached to all outstanding voting securities
of the Corporation as at October 1, 2001:
---------------------- -------------------------- ---------------- -------------
Name of Shareholder Type of Ownership Number of Percentage of
Common Shares Common Shares
---------------------- -------------------------- ---------------- -------------
Warren Arseneau Direct 3,840,307 11.3
---------------------- -------------------------- ---------------- -------------
Martin H. Beck Direct and Indirect via 4,475,212 13.1
Greensulate LLC
---------------------- -------------------------- ---------------- -------------
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PARTICULARS OF MATTERS TO BE ACTED ON
AMENDMENT TO STOCK OPTION PLAN
The Board of Directors of Rtica have adopted a stock option plan (the "Plan") in
order to provide an incentive for key directors, officers, employees and key
consultants to the Corporation. The Plan provides that the Board of Directors of
Rtica may, from time to time in its discretion, grant to key directors, officers
and employees of Rtica or the registered retirement savings plan or holding
companies of them, the option to purchase common shares. The Board of Directors
will determine the market price per common share and the number of common shares
which may be allotted to each such person or plan and all other terms and
conditions of the option, in accordance with the applicable policies of any
relevant regulatory authority or the Canadian Venture Exchange. These options
will be exercisable for a period not exceeding 5 years from the date of grant.
The shareholders have authorized the issuance of up to 3,500,000 shares under
the Plan. Currently there are 3,240,250 outstanding options which have been
granted by the directors at exercise ranging between $0.20 per share and $0.75
per share, and to date 211,250 shares have been issued under the Plan.
Management therefore recommends increasing the number of shares issuable under
the Stock Option Plan by 750,000, to assist in recruiting new personnel as the
Corporation enters its commercial production phase.
Approval of the increase in the number of shares requires the vote of the
holders of a majority of shares represented at the meeting, other than those
held by the Corporation's directors and officers who are eligible under the
Plan, in the form set out in Schedule "A" attached hereto.
ELECTION OF DIRECTORS
It is proposed to elect six directors at the Meeting. Hereinafter set forth
are the names of the persons for whom it is intended that votes will be cast for
their election as directors pursuant to the proxy solicited hereby unless the
shareholder directs that his shares be withheld from voting in the election of
directors. Each director will hold office until the next annual meeting or until
his successor is elected or appointed.
In the following tables and notes thereto is stated the name of each person
proposed by management for election as a director, the positions and offices
with the Corporation held by him, if any, the period or periods of service as a
director of the Corporation and the approximate number of Common Shares of the
Corporation beneficially owned by him or over which he exercises control or
direction as of the date hereof:
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------------------------ --------------------- --------------------- --------------------- ---------------------
Name & Position with the Date Appointed as a Common Shares of Number of
Municipality of Corporation Director the Corporation Options Held as of
Residence beneficially owned, October 1, 2001
directly or
indirectly or
controlled or
directed as at
October 1, 2001
------------------------ --------------------- --------------------- --------------------- ---------------------
Warren Arseneau Director and Apr. 28-1998 3,840,307 410,000
Burlington, Ontario President
------------------------ --------------------- --------------------- --------------------- ---------------------
Roger J. Short Director May 30-1997 1,000,018 577,500
Kimberley, Ontario
------------------------ --------------------- --------------------- --------------------- ---------------------
Robert H. Stikeman(1) Director, Chief May 22-1998 268,026 100,000
Toronto, Ontario Financial Officer
and Secretary
------------------------ --------------------- --------------------- --------------------- ---------------------
Martin H. Beck(1) Director May 30-1997 4,475,212(2) 567,750
Amherst, New Hampshire
------------------------ --------------------- --------------------- --------------------- ---------------------
Michael Boyd(1) Director Apr. 28-1998 856,722(3) 235,000
Etobicoke, Ontario
------------------------ --------------------- --------------------- --------------------- ---------------------
Steven Letwin Director Nov. 9-2000 -- 100,000
Toronto, Ontario
------------------------ --------------------- --------------------- --------------------- ---------------------
(1) Denotes member of Audit Committee and Compensation Committee.
(2) Of the total 4,475,212 common shares, 4,083,212 shares are owned by
Greensulate L.L.C., a private U.S. Corporation controlled by Martin Beck.
(3) Of the total 856,722 common shares, 352,631 are owned directly by Michael
Boyd; 141,937 are owned indirectly by Investor Services In Trust for
Michael Boyd's RRSP; and 362,154 are owned indirectly by Junior Industrial
Finance Corp., a private Corporation wholly owned by Michael Boyd.
The information as to shares beneficially owned, directly or indirectly, or over
which control or direction is exercised, not being within the knowledge of the
Corporation, has been furnished by the respective nominee.
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ADVANCE APPROVAL OF PRIVATE PLACEMENTS
The board of directors wish to obtain the approval of the shareholders to
authorize private placements, prior to the next annual meeting of the
shareholders, of up to a maximum of 100% of the outstanding Common Shares of the
Corporation, at such prices discounted from market at the time that the shares
are proposed to be issued as may be allowed pursuant to the policies of the
Canadian Venture Exchange (the "Exchange"). Pursuant to the policies of the
Exchange, the Corporation is not entitled, during any six-month period to issue
a number of Common Shares in excess of 25% of the total issued and outstanding
Common Shares of the Corporation, except with the approval of the shareholders.
The Exchange will consider a proposed private placement in excess of the 25%
limit in cases where the shareholders have given prior blanket approval to the
directors to issue a number of shares not exceeding 100% of the total issued
shares where the details as to the number of shares to be issued and the issue
price have not been determined at the time that the approval of the shareholders
is given. Pursuant to the policies of the Exchange, the price at which the
shares may be issued pursuant to the private placements must not be lower than
the closing price of the shares on the Exchange on the earlier of the trading
day prior to the date that an application and notice of the proposed private
placement is given to the Exchange in the prescribed form and the date on which
a press release announcing the proposed private placement is issued, less the
applicable discount as follows:
Maximum Discount
Market Price Therefrom
$0.50 or less 25%
$0.51 to $2.00 20%
Over $2.00 15%
Set forth below is the resolution to be submitted to the shareholders in
relation to authorizing the directors to complete private placements of Common
Shares. The resolution must be passed by a majority of the votes cast by holders
of Common Shares who vote in respect of the resolution. If the resolution is not
passed, the directors will then only complete private placements as otherwise
allowed by the policies of the Exchange. If the resolution is passed each
private placement will be subject to all required regulatory approvals,
including that of the Exchange. The resolution is as follows:
"BE IT RESOLVED THAT:
1. THE DIRECTORS OF THE CORPORATION BE AND THEY ARE HEREBY AUTHORIZED TO
COMPLETE PRIVATE PLACEMENTS OF COMMON SHARES OF THE CORPORATION, PRIOR TO
THE NEXT MEETING OF THE SHAREHOLDERS, OF UP TO A MAXIMUM OF 100% OF THE
OUTSTANDING COMMON SHARES OF THE CORPORATION, AT SUCH PRICES DISCOUNTED
FROM MARKET AT THE TIME THE COMMON SHARES ARE PROPOSED TO BE ISSUED AS MAY
BE ALLOWED PURSUANT TO THE POLICIES OF THE CANADIAN VENTURE EXCHANGE; AND,
2. ANY DIRECTOR OR OFFICER OF THE CORPORATION BE AND IS HEREBY AUTHORIZED TO
TAKE ALL NECESSARY STEPS AND PROCEEDINGS, AND TO EXECUTE AND DELIVER AND
FILE ANY AND ALL DECLARATIONS, AGREEMENTS, DOCUMENTS AND OTHER INSTRUMENTS
AND TO DO ALL SUCH OTHER ACTS AND THINGS (WHETHER UNDER CORPORATE SEAL OF
THE CORPORATION OR OTHERWISE) THAT MAY BE NECESSARY OR DESIRABLE TO GIVE
EFFECT TO THE PROVISIONS OF THIS RESOLUTION."
7
APPOINTMENT AND REMUNERATION OF AUDITORS
It is proposed that KPMG LLP of Toronto be re-appointed as the Corporation's
auditors and that their remuneration be fixed by the directors.
INFORMATION CONCERNING THE CORPORATION
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The Directors have adopted the recommendations of the Toronto Stock Exchange
Committee on Corporate Governance in Canada (the "TSE Committee") to require the
annual disclosure by each listed corporation of its approach to corporate
governance with reference to the proposed guidelines of the TSE Committee. These
proposed guidelines are set out in section 474 of its Corporation Manual. While
the Corporation's shares are not listed on the TSE, it wishes to comply
voluntarily with the disclosure provisions of that policy.
Mandate of the Board of Directors
The Board of Directors is responsible for the stewardship of the Corporation
through consultation with the management of the Corporation. In addition, the
Board meets more often when non-routine matters requiring its approval are
raised. The Board met more than once during fiscal 2001.
The Board of Directors is responsible for managing and supervising the
management of the Corporation on behalf of the shareholders.
Specifically, the Board is responsible for the following:
a) Regular review and approval of general business strategy and direction
b) Annual review of and approval of business plans
c) Quarterly review and approval of financial statements
d) Regular review of senior management performance
e) Regular review of corporate governance practices
f) Regular review of compensation plans and their application
g) Specific approval changes to corporate by-laws
h) Approval of the issuance of securities
i) Declaration of dividends
j) Purchase or redemption of the shares
k) Review of stock option plan and allocation of same
The Board is further responsible to ensure that the following are in place and
operating effectively:
a) A strategic and operational planning process
b) A risk identification and management process
c) A management development and successor planning process
d) A corporate communication policy and full disclosure practices
e) Annual review of internal and systems contracts, management organization
and management information systems
8
It is expected that members of the Board of Directors of Rtica will:
a) Act in the best interests of the Corporation to maximize shareholder value
b) Actively promote business opportunities and business relationships to the
benefit of the Corporation
c) Carry out their duties proactively as directors to assist management with
corporate governance and management concerns
d) Devote sufficient time to stay current on the Corporation's plans and
activities in order to knowledgeably contribute to its development
e) Avoid conflicts of interest and personal or business dealings with the
Corporation for their own account or any business with which they are
associated
COMPOSITION OF THE BOARD
Four of the six proposed directors are unrelated directors. An unrelated
director is defined as one who is independent of management and is free from any
interests or any business or other relationship which could, or could reasonably
be perceived to, materially interfere with the director's ability to act with a
view to the best interests of the Corporation, other than interests and
relationships arising from shareholdings. A related director is one who is not
an unrelated director.
Warren Arseneau and Robert Stikeman are related directors, by virtue of their
holding management positions with the Corporation. While these directors may by
definition be related directors, they, like all directors, continue to be
legally obligated to act in good faith with a view to the best interests of the
Corporation and its shareholders. The remainder of the directors are unrelated
in that they have not worked for the Corporation nor do they have material
contracts with the Corporation.
The Corporation has no "significant shareholders", which is defined by the
guidelines as a shareholder with the ability to exercise a majority of votes for
the election of directors.
BOARD APPROVALS AND STRUCTURE
The Board responds to and if it considers appropriate approves, with such
revisions as it may require, corporate objectives and recommended courses of
action which have been brought forward by management. The Board retains plenary
power for those functions not specifically delegated by it to management. In
addition to maintaining the powers it must retain by statute, significant
business activities, actions and communications proposed to be taken or
submitted by the Corporation are subject to Board approval.
Annual capital and operating budgets and significant changes, the Annual
Information Form, annual and quarterly financial statements, Shareholder's
Information Circular, major changes in the organizational structure of the
Corporation, major acquisition and disposition transactions, major financing
transactions involving the issuance of shares, debt securities and the like,
major banking relationships, dividends, appointment of officers, stock option
plans, and the issuance of stock options, are all subject to Board approval.
BOARD COMMITTEES - SIZE AND COMPENSATION
There are two Board Committees, the Audit Committee, comprised of three members,
two of whom are unrelated directors and the Compensation Committee, comprised of
three members, two of whom are unrelated directors.
9
The TSE guidelines suggest that Boards establish other committees, however, the
Corporation has not done so nor does it currently intend to. The Board has not
constituted a committee comprised exclusively of unrelated directors, to assess
the effectiveness of the Board as a whole, the committees of the Board, and the
contribution of individual directors.
The Corporation has a formal process of orientation and education for new
members of the Board. When relevant, this process is supplemented informally by
members of the Board.
The Board has not yet developed position descriptions for the Board and the
Chief Executive Officer. As the Board has plenary power, any responsibility
which is not delegated to management or a Board committee remains with the
Board.
The Board has not adopted a formal system which would enable an individual
director to engage an outside advisor at the expense of the Corporation in
appropriate circumstances, however, the Chairman of the Audit Committee has been
authorized to retain advice in matters relating to the affairs of the Audit
Committee. If such an engagement were appropriate it would be subject to the
approval of the Board.
AUDIT COMMITTEE
The Audit Committee of the Board of Directors (the "Committee") is composed of
three directors, two of whom are non-management directors. The current members
of the Committee are Robert Stikeman, Martin Beck and Michael Boyd. The Audit
Committee has direct communications channels with internal personnel responsible
for financial statement preparation and with the Corporation's external
auditors. The Committee monitors audit functions and the preparation of
financial statements and meets with outside auditors independent of management.
Additional responsibilities include the review of any auditors' reports to
management and review of internal controls and transactions between officers and
the Corporation. The Audit Committee met more than once between May 31, 2000 and
May 31, 2001.
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Committee") is
composed of three directors, two of whom are non-management directors. The
current members of the Committee are Robert Stikeman, Martin Beck and Michael
Boyd. The Compensation Committee reviews the executive officers' compensation
and management's recommendations on stock option grants to employees. The
Committee meets as required to make recommendations to the Board of Directors
with respect to senior executive compensation.
The compensation of the Corporation's executive officers including those named
in the Summary Compensation Table below (the "Named Executive Officers") is
determined by the Board of Directors based on recommendations made by the
Committee.
Compensation for executive officers, including each of the Named Executive
Officers, consists of a base salary and long-term share-based incentives, all of
which are administered by the Committee.
The Committee establishes salary ranges for the positions held by executive
officers following an annual review of the responsibilities of the officer, the
officer's performance, experience and years of service and the salary levels for
comparable positions in other comparable companies. The Compensation Committee
met more than once between May 31, 2000 and May 31, 2001.
10
SHAREHOLDER COMMUNICATIONS
The Board has generally delegated the communications policy to the senior
management of the Corporation. Shareholder communications are generally handled
by the President or the Chief Financial Officer.
EXPECTATIONS OF SENIOR MANAGEMENT
The Board is involved in monitoring and assessing senior management through its
regular contact with the senior management team, most of whom participate in
presentations to the Board at its meetings.
EXECUTIVE COMPENSATION
The Corporation has one executive officer. During the most recently
completed financial year of the Corporation the executive officer received an
aggregate cash compensation by the Corporation and RTICA Inc. (formerly E2
Development Corporation), its wholly owned operating subsidiary, in the amount
of $153,500.
The following table presented in accordance with the regulations of the
Securities Act (Ontario) sets forth all compensation paid in respect of the
Chief Executive Officer and those individuals who received compensation in
excess of $100,000 per year (Named Executive Officers).
SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------------------------- ----------------------------------------
AWARDS PAYOUTS
-------------------------- -----------
SECURITIES RESTRICTED
NAME AND SALARY ALL UNDER SHARES ALL
PRINCIPAL (CDN.$) BONUS OTHER OPTIONS (#) OR RESTRICTED SHARE LTIP OTHER
POSITION YEAR (1) (CDN.$) ($) OTHER UNITS ($) PAYOUTS ($) ($)
-------------------------------------------------------------------------------------------------------
Warren 2001 153,500 Nil Nil 200,000 Nil Nil Nil
Arseneau, 2000 120,000 Nil 75,000 Nil Nil Nil Nil
President 1999 120,000 Nil Nil Nil Nil Nil Nil
1998 120,000 Nil Nil Nil Nil Nil Nil
1997 118,700 Nil Nil 225,000 Nil Nil Nil
-------------------------------------------------------------------------------------------------------
(1) The salary was paid under a consulting contract pursuant to which local
travel, office and administrative expenses of approximately $40,000
incurred by Mr. Arseneau were to be paid by Mr. Arseneau.
LONG TERM INCENTIVE PLANS
There were no such plans awarded in the last completed fiscal year.
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OPTIONS/SAR GRANTED DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
ENDED MAY 31, 2001 TO NAMED EXECUTIVE OFFICERS
------------------------------------------------------------------------------------------------------------------
NAME SECURITIES % OF TOTAL EXERCISE PRICE MARKET VALUE OF EXPIRATION
UNDER OPTIONS GRANTED (CDN.$/SECURITY) SECURITIES DATE
OPTIONS TO EMPLOYEES IN UNDERLYING
GRANTED (#) FINANCIAL YEAR OPTIONS ON
THE DATE OF
GRANT
(CDN.$/SECURITY)
------------------------------------------------------------------------------------------------------------------
Warren Arseneau 100,000 9.0% $0.70 Nil Dec 1 - 03
100,000 9.0% $0.57 Nil Jan 15 - 04
------------------------------------------------------------------------------------------------------------------
The options granted to the Named Executive Officer in the fiscal year ended May
31, 2001 were granted pursuant to the terms of the Arseneau Consulting Contract
as hereinafter defined under "Management Contracts".
STOCK OPTIONS EXERCISED AND HELD
The following information concerns each exercise of options during the most
recently completed financial year ended May 31, 2001 by the Corporation's Named
Executive Officers and the financial year end value of unexercised options held,
on an aggregate basis.
AGGREGATED/SAR OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL
YEAR AND FINANCIAL YEAR-END OPTION VALUES
-----------------------------------------------------------------------------------------------------------------------
SECURITIES AGGREGATE VALUE OF UNEXERCISED IN THE
ACQUIRED ON VALUE MONEY OPTIONS AT YEAR END(1)
EXERCISE REALIZED UNEXERCISED OPTIONS AT YEAR END EXERCISABLE/NON-EXERCISABLE
NAME (#) ($) (#) CDN. $
-----------------------------------------------------------------------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-----------------------------------------------------------------------------------------------------------------------
Warren Arseneau 15,000 $6,000 410,000 -- $97,000 --
-----------------------------------------------------------------------------------------------------------------------
Note:
(1) Based on the closing price of the common shares on the Canadian Venture
Exchange on May 31, 2001 of Cdn$0.60
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS
Since the beginning of the Corporation's last completed fiscal year, none of the
directors or senior officers of the Corporation nor any of their respective
associates or affiliates, has been indebted to the Corporation or to its wholly
owned subsidiary.
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INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
There are no material interests, direct or indirect, of directors, senior
officers, and shareholders who beneficially owns, directly or indirectly, more
than 10% of the outstanding common shares or any known associate or affiliates
of such persons, in any transaction within the last three years or in any
proposed transaction, which has materially affected or would materially affect
the Corporation or RTICA Inc. except (i) the directors and officers of the
Corporation received common shares in the Corporation pursuant to the Major
Transaction in exchange for their shares in RTICA Inc. in 1998; (ii) over the
past two fiscal years Martin Beck, through DevTech Labs Inc. provides product
and process development services for certain fees; and (iii) Robert Stikeman,
through Stikeman, Graham, Keeley & Spiegel LLP provides legal services to the
Corporation.
MANAGEMENT CONTRACTS
On May 15, 2000 RTICA Inc. entered into a management consulting agreement (the
"Arseneau Consulting Agreement") pursuant to which Mr. Arseneau is required to
provide consulting services consisting of managerial services, advising on
development, production, distribution, sales and promotion, labour negotiations,
contract negotiations, financial services, and such other consulting services as
RTICA Inc. and Mr. Arseneau may from time to time agree upon. In consideration
for the services to be provided by Mr. Arseneau, the Corporation shall pay
consulting fees of $12,500 per month to Mr. Arseneau escalating annually at a
rate of 4% per annum. Under the Arseneau Consulting Agreement, RTICA Inc. has
agreed to grant 425,000 options over 5 years, 100,000 options in each of the
first 4 years and the balance in 2004 at then prevailing market price of the
shares, provided the Arseneau Consulting Agreement is in effect and Mr. Arseneau
provides the services required thereunder.
Mr. Arseneau is retained by RTICA Inc. as an independent contractor and is
expected to provide the majority of his time to RTICA Inc. and pay for local
travel, home office and administrative expenses without reimbursement. The
Arseneau Consulting Agreement expires on December 31, 2004 unless earlier
terminated by either the Corporation or Mr. Arseneau. If terminated by the
Corporation, the Corporation shall provide Mr. Arseneau with six (6) months
written notice of such termination or by paying the equivalent consulting fee in
lieu of such notice. If terminated by Mr. Arseneau, Mr. Arseneau shall provide
the Corporation with six (6) months written notice of his intention to terminate
the Arseneau Consulting Agreement. The Arseneau Consulting Agreement may be
extended by agreement between Mr. Arseneau and the Corporation.
RTICA Inc. has also signed a confidentiality, non-competition and intellectual
property agreement with Warren Arseneau dated May 15, 2000. The term of the
agreement is for 3 years after termination of the consulting agreement with Mr.
Arseneau.
AUDITORS, REGISTRARS AND TRANSFER AGENTS
KPMG LLP of Toronto are the Corporation's auditors.
Equity Transfer Services Inc. of Toronto is the Corporation's transfer agent,
escrow agent and registrar.
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LEGAL PROCEEDINGS
There are no legal proceedings involving Rtica or its property outstanding as at
the date of this circular.
MARKET FOR TRADING
The Company currently trades on CDNX under the symbol RTN.
OTHER MATTERS
Management is not aware of any matters to come before the Meeting other than
those set forth in the Notice of Meeting. If other matters come before the
Meeting it is the intention of the individuals named in the form of proxy to
vote the same in accordance with their best judgement in such matters.
EFFECTIVE DATE
Unless otherwise stated, the information contained in this Management
Information Circular is given as of October 1, 2001.
The contents of this Management Information Circular and the sending thereof
have been approved by the directors of the Corporation.
The foregoing contains no untrue statement of a material fact and does not omit
to state a material fact that is required to be stated or that is necessary to
make a statement not misleading in the light of the circumstances in which it
was made.
DATED: October 2, 2001.
RTICA CORPORATION
Per: "Robert Stikeman", signed
-----------------------------------
Robert Stikeman
Chief Financial Officer & Secretary
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SCHEDULE "A"
RESOLUTION OF THE SHAREHOLDERS
OF RTICA CORPORATION
AMENDMENT TO THE STOCK OPTION PLAN
BE IT RESOLVED THAT:
1. The Corporation's Stock Option Plan, be amended (the "Plan") to
increase the maximum number of common shares of the Corporation
(the "Common Shares") which may be issued under options granted
under the Plan from 3,500,000 Common Shares to 4,250,000 Common
Shares, as more particularly described under the heading
"Amendment to Stock Option Plan" in the Management Information
Circular dated October 2, 2001, be and is hereby approved.
2. Any one officer or director of the Corporation be and is hereby
authorized for and on behalf of and in the name of the
Corporation, to do all such acts and things and to execute and
deliver, whether under corporate seal of the Corporation
otherwise, all such documents, instruments and writings as in his
sole discretion are necessary or desirable to give effect to this
resolution.
This resolution requires a majority vote of the shareholders other than those
who are directors or officers of the Corporation, defined as "Disinterested
Shareholder Approval" under the Plan.
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