EXHIBIT 11.1
SOIL BIOGENICS LIMITED
CORPORATE GOVERNANCE PRINCIPLES
The Board of Directors of SOIL BIOGENICS LIMITED ("Soil Biogenics" or the
"Company," including any subsidiaries) recognizes the importance of good
corporate governance as a means of addressing the needs of the Company's
stockholders, employees and customers. These Principles are intended to serve as
flexible guidelines and are to be interpreted within the context of the
Company's Bylaws, other governing legal documents and all applicable laws, all
of which necessarily take precedence. The Board of Directors recognizes that
corporate governance is a developing and dynamic area warranting periodic
review. Accordingly, these Principles are reviewed periodically and revised as
appropriate to ensure the effective functioning of the Board of Directors and
high quality corporate governance.
1. Responsibilities and Functions of Board of Directors
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The Board of Directors, elected each year by the Company's stockholders at an
annual meeting of stockholders, fosters and encourages an environment of strong
disclosure controls and procedures, including internal controls, financial
accountability, high ethical standards and compliance with applicable policies,
laws and regulations.
The primary responsibility of members of the Company's Board of Directors is to
uphold the best interests of the Company and its stockholders as a whole by
overseeing the management of the Company's business and affairs.
While the Board may call special meetings in order to address specific needs of
the Company from time to time, it is generally expected that the Board of
Directors will meet at regular intervals and are expected to hold approximately
four meetings or more per fiscal year during which the Board will perform a
number of specific functions, including but not limited to:
a. Reviewing and discussing the performance of the Company, as well as
any immediate issues facing the company;
b. Reviewing, approving and monitoring fundamental financial and business
strategies and major corporate actions;
c. Ensuring processes are in place for maintaining the integrity of its
financial statements, the integrity of compliance with law and ethics
and
d. Assessing and reviewing major risks facing the Company and planning
options, if any, for their mitigation.
For each Board meeting, Board members are encouraged to suggest the inclusion of
item(s) for the agenda in consultation with each other and senior management of
the Company.
It is expected that each Director will make every effort to attend each Board
meeting. While attendance in person is preferred, attendance by teleconference
is permitted if necessary under the circumstances.
The proceedings and deliberations of the Board are confidential. Each Director
will maintain the confidentiality of information received in connection with his
or her service as a Director.
2. Board Access to Management
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At all times, Board members shall be able to freely access Company management
without hindrance or undue delay while ensuring that such contact is not
distracting to the business operations of the Company and that such contact, if
in writing, is copied to the Chairman and Chief Executive Officer.
In addition, management may be invited to attend Board meetings, during which
time management may brief the Board on items of particular interest and/or
concern. Senior management is encouraged to offer presentations at such meetings
by individuals who can provide additional insight into items being considered or
who may have potential for greater responsibility and should be given exposure
to the Board.
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3. Board Access to Independent/Outside Advisors
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The Board of Directors has the authority, when it should be deemed necessary to
carry out duties, to retain independent legal, financial or other advisors and
to approve each such advisor's fees and other retention terms at the expense of
the Company.
4. Size of Board
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The Company's Bylaws provides that the number of Directors shall be fixed from
time to time by the Board of Directors, but in no event shall be less than the
minimum required by law. The Board should be large enough to maintain the
Company's required expertise but not too large to function efficiently.
At this time, the Board of Directors believes that the optimal number of Board
members is three, while recognizing and allowing however, for changing
circumstances that may warrant a higher or lower number from time to time.
5. Ethics and Conflicts of Interest of the Board
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The Board expects all Directors, as well as officers and employees, to act
ethically at all times and to acknowledge their adherence to the policies
comprising the Company's Code of Ethics. At any time that a Board member
develops an actual or potential conflict of interest with the Company, the
conflict should be reported without delay to the Chairman of the Board and Chief
Executive Officer. In the event that a conflict of interest cannot be
effectively resolved, the Board member shall resign.
Should a member of the Board or any member of his or her immediate family have a
matter before the Board in which they have a personal interest, then this
interest and the material facts and relationships relating thereto must be
disclosed immediately.
Furthermore, if a Board member becomes aware of a business opportunity that
could be of potential benefit to the Company, then he or she must first
introduce this opportunity to the Board of Directors for consideration and not
endeavor to profit personally from the opportunity unless the Company declines
to pursue it.
6. Criteria and Selection of Board Membership
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The Board of Directors is responsible to the Company's stockholders for
identifying and recommending the most qualified Director candidates to fill
newly created directorship positions and vacancies and further recommend these
candidates for election by stockholders.
Directors should possess the highest personal and professional ethics,
responsibility, fairness, integrity and values and be committed to representing
the long-term interests of the Company's stockholders. They must also have an
inquisitive and objective perspective, practical wisdom and mature judgment.
The Company's general counsel or its Chief Financial Officer shall be
responsible for providing an orientation for all new Directors and for
periodically providing materials or briefing sessions on subjects that would
assist Directors in discharging their duties. Each new Director shall, within
six weeks of election to the Board, spend a reasonable amount of time at
corporate headquarters for an in-depth overview of the Company's strategic
plans, its financial statements and key policies and practices.
Directors must be willing to devote sufficient time to carrying out their duties
and responsibilities effectively and should be committed to serve on the Board
for an extended period of time. Directors should offer their resignation in the
event of any significant change in their personal circumstances, including a
change in their principal job responsibilities or in the event that a conflict
of interest cannot be effectively resolved.
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7. Mandatory Retirement Requirement for Board Members
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Board members cannot serve on the Board of Directors after the age of 72.
Accordingly, such Directors must tender their resignation immediately prior to
the Company's annual general meeting during the calendar year in which he or she
becomes 72 years of age.
Board members cannot be nominated for a new term if the nominee will turn 72
years of age or older during the calendar year in which the election is held.
8. Term Limits for Board Members
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There is no time term-limit for service to the Board, nor does the Board believe
that a term limit should be established. By abstaining from term limits, the
Company believes it can successfully retain Board members who, over time, have
been able to garner industry knowledge and are intimate with the Company's
operations.
Such Directors are able to significantly contribute to the Board's function
since they have helped to foster the Company's corporate vision and better
understand industry trends.
9. Outside Board Directorships
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Directors must be willing to devote sufficient time to carrying out their duties
and responsibilities effectively. Since service to the Company's Board of
Directors may require significant time and responsibility commitments, Board
members are encouraged to limit the number of public company boards that they
may concurrently serve on to three.
Board members shall notify the Chairman and Chief Executive Officer of any
and/or all other public company boards on which they may serve or to which they
have received an invitation to serve prior to accepting such positions.
10. Board Performance Assessment and Review
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Meaningful Board evaluation may require a self-assessment of the effectiveness
of the full Board and individual Directors. Accordingly, the Board shall perform
an annual self-evaluation through its Directors.
This review may require establishing protocols and procedures for evaluation of
individual Board members in order to ensure that each sitting member brings
expertise that is relevant to the Company's needs at that time and that the
skills and contributions of the Directors are conducive to the Board's function
as a group.
While individual Board member review may be of value, the purpose of this
evaluation is to increase the effectiveness of the Board, not to focus on the
performance of individual Board members.
11. Director's Compensation
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During the normal course of business, members of the Board of Directors are not
eligible for compensation unless compensation is agreed to as a condition of the
Board member's service to the Company or in the event of extraordinary
circumstances.
Board members who are also employees of the Company receive no additional
compensation for serving on the Board of Directors.
While all Board members may be eligible to receive reimbursement for travel and
related meeting attendance expenses, only non-employee Directors may be eligible
to receive payment for serving on the Board of Directors.
12. Stock Option Grants
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Directors, Officers, employees of and consultants to the Company, selected by
the Board of Directors may be eligible to receive grants. The grant may be in
the form of a stock award, restricted stock purchase offer, incentive
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stock option or a non-statutory option. The Board of Directors designates the
times at which the grant will be made, the type and number of options (and the
number of shares subject to those options) or stock awards to be granted.
13. Prohibition on Personal Loans
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The Company and the Board of Directors will not engage in offering or making
available credit or loan arrangements to any member of the Board or the
Company's executive management.
14. Confidential Voting
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Each stockholder eligible to vote on any matter submitted to a stockholder vote
is entitled to one vote, in person or by proxy, for each share of common stock
eligible to be voted and held by such stockholder.
Each stockholder who votes by proxy shall have confidential treatment of its
votes for the election of Directors and all other matters submitted to a
stockholder vote.
15. Code of Ethics
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The Company has adopted a comprehensive "Code of Ethics" which includes policies
calling for strict observance of all laws applicable to the Company, describes
conflict of interest guidelines, standards of business conduct, and other
principles and policies. Each Director, Officer and Employee of the Company is
expected to be familiar with and to follow these policies to the extent
applicable to them.
Adopted September 16, 2003.
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