ImagicTV Inc.
[LOGO]
iMagicTV
Notice of Annual Meeting of Shareholders
and
Management Information Circular
June 20, 2001
ImagicTV Inc.
(Incorporated under the laws of Canada)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the shareholders of ImagicTV Inc. ("Shareholders"):
NOTICE IS HEREBY GIVEN that the annual meeting (the "Meeting") of holders of
common shares ("Common Shares") of ImagicTV Inc. (the "Corporation") will be
held at the Saint John Trade & Convention Centre, One Market Square, Saint John,
New Brunswick E2L 4Z6 on Tuesday, July 31, 2001 at 10:00 a.m., Atlantic time,
for the following purposes:
1. to receive the audited consolidated financial statements of the Corporation
for the fiscal year ended February 28, 2001, together with the report of
the auditors thereon (the "Financial Statements");
2. to elect directors;
3. to appoint auditors and authorize the directors to fix their remuneration;
and
4. to transact such further and other business as may properly come before the
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on Monday, June 25, 2001
as the record date for the determination of the Shareholders entitled to receive
notice of, and to vote at, the Meeting.
This notice is accompanied by a form of proxy (the "Proxy Form"), the management
information circular of the Corporation dated the date hereof (the "Circular")
and the Corporation's 2001 Annual Report which includes the Financial
Statements. A copy of each such document has been sent to each director, each
Shareholder entitled to notice of the Meeting and to the Corporation's auditors
and has been filed with the securities regulatory authorities in each of the
provinces and territories of Canada, as well as with the Director under the
Canada Business Corporations Act, the Securities and Exchange Commission in the
United States, The Toronto Stock Exchange and the Nasdaq National Market.
Shareholders unable to be present at the Meeting in person are invited to (i)
execute and return the paper Proxy Form in the envelope provided for that
purpose or (ii) submit a proxy using the Internet. Procedures for submitting a
proxy by use of the Internet are described in the Circular. Paper Proxy Forms
to be used at the Meeting must be mailed in the enclosed envelope or hand
delivered to CIBC Mellon Trust Company, Attention: Proxy Department, PO Box
12005 STN BRM B, Toronto, Ontario M7Y 2K5 or received by the Secretary of the
Corporation at One Brunswick Square, Saint John, New Brunswick E2L 3Y2, before
the close of business (5:00 p.m., Atlantic time) on July 30, 2001 or the last
business day preceding the date of any adjournment of the Meeting, if
applicable, or deposited with the Chairman of the Meeting before the
commencement of the Meeting or any adjournment thereof. If a Shareholder elects
to submit a proxy by use of the Internet, such proxy must be delivered not later
than 10:00 a.m. Atlantic time on July 29, 2001.
By Order of the Board
/s/ Sue MacQuarrie
Sue MacQuarrie
Corporate Secretary
June 20, 2001
[LOGO]
iMagicTV
ImagicTV Inc.
MANAGEMENT INFORMATION CIRCULAR
SOLICITATION OF PROXIES
This Management Information Circular (the "Circular") is furnished in connection
with the solicitation by management of ImagicTV Inc. (the "Corporation" or
"ImagicTV") of proxies to be used at the annual meeting of shareholders of the
Corporation (the "Meeting") referred to in the accompanying notice of meeting
("Notice") to be held at the time and place and for the purposes set forth in
the Notice. The solicitation will be made primarily by mail, but proxies may
also be solicited personally or by telephone by the Corporation at nominal cost.
The cost of the solicitation will be borne by the Corporation. The information
contained herein is given as of June 20, 2001 unless indicated otherwise.
Copies of the Corporation's 2001 Annual Report which includes the audited
consolidated financial statements of the Corporation for the fiscal year ended
February 28, 2001, together with the report of the auditors thereon have been
provided to holders of common shares ("Shares" or "Common Shares") of the
Corporation on the Record Date (as defined below) fixed for the Meeting
("Shareholders") together with this Circular, the Notice, and the form of proxy
(the "Proxy Form"). The Corporation's 2001 Annual Report also includes
management's discussion and analysis of the Corporation's financial condition
and results of operations for the fiscal year ended February 28, 2001.
APPOINTMENT OF PROXYHOLDERS AND REVOCATION OF PROXIES
Shareholders who are unable to attend the Meeting and vote in person may still
vote by appointing a proxyholder.
A Shareholder may convey voting instructions in one of the two voting methods:
(i) use of the paper Proxy Form to be returned by mail or hand delivery or (ii)
use of the Internet proxy procedure. By conveying voting instructions in one of
the two ways, Shareholders can participate in the Meeting through the person or
persons named on the Proxy Form.
The persons specified in the Proxy Form are directors and/or officers of the
Corporation. A Shareholder has the right to appoint a person, who need not be a
Shareholder, to represent such Shareholder at the Meeting or any adjournment
thereof other than the persons specified in the enclosed form of proxy. Such
right may be exercised by inserting such person's name in the blank space
provided in the Proxy Form or by completing another proper Proxy Form. The
paper Proxy
Form is the only voting option by which a Shareholder may appoint a person as
proxy other than the management nominees named on the Proxy Form.
Mail or Hand Delivery
For Shareholders who wish to use the paper Proxy Form, the completed, dated and
signed Proxy Form must be mailed in the enclosed envelope or hand delivered to
CIBC Mellon Trust Company, Attention: Proxy Department, PO Box 12005 STN BRM B,
Toronto, Ontario M7Y 2K5 or received by the Secretary of the Corporation at One
Brunswick Square, PO Box 303, Saint John, New Brunswick E2L 3Y2 before the close
of business (5:00 p.m., Atlantic time) on July 30, 2001 or the last business day
preceding the date of any adjournment of the Meeting, if applicable, or
deposited with the Chairman of the Meeting before the commencement of the
Meeting or any adjournment thereof. Enquiries regarding the Proxy Form can be
made to CIBC Mellon Trust Company at 1-800-387-0825 or 416-643-5500.
Internet
If a Shareholder elects to submit a proxy by use of the Internet then the
Shareholder must access the following website:
www.proxyvoting.com/imagictv
A Shareholder must then follow the instructions contained on the website and
refer to the Proxy Form sent to that Shareholder, and will be required to enter
the Control Number provided to the Shareholder, as described under the heading
"Control Numbers", below. Voting instructions are then conveyed electronically
by the Shareholder over the Internet.
Control Numbers
In order to submit a proxy via the Internet, Shareholders will be required to
enter the Control Number that has been provided to the Shareholder on the Proxy
Form delivered to the Shareholder. The type of Control Number provided to each
Shareholder will depend upon the manner in which such Shareholder owns his or
her or its Shares. Registered Shareholders, being Shareholders whose shares are
held in the Shareholder's own name, will have received a Proxy Form which
contains a 13 digit Control Number located on lower left hand side on the back
side of the Proxy Form.
Beneficial Shareholders are Shareholders who do not hold their Shares in their
own name but rather in the name of their broker or the broker's nominee (also
known as "street form"). Beneficial shareholders will receive a Proxy Form from
such broker or nominee which contains a 12 digit Control Number and is located
in the "Instruction" area of the beneficial Shareholder's Proxy Form. Some
Shareholders may own Shares as both a Registered Shareholder and as a Beneficial
Shareholder. Such Shareholders will need to vote separately, using the
applicable Control Number, in respect of Shares held in their own name or held
beneficially through their broker or its nominee.
REVOCATION OF PROXIES
If prior instructions were submitted by mail or hand delivery, a Shareholder, or
such Shareholder's attorney authorized in writing, who has appointed a
proxyholder to attend and vote at the Meeting has the power to revoke such
appointment as to any matter on which a vote shall not already have been cast
pursuant to the authority conferred by the Proxy Form and may do so either: (a)
by delivering another properly executed Proxy Form bearing a later date and
depositing it as aforesaid; or (b) by depositing an instrument in writing
revoking the proxy executed by such Shareholder or such Shareholder's attorney
2
authorized in writing (i) to the Secretary of the Corporation at One Brunswick
Square, PO Box 303, Saint John, New Brunswick E2L 3Y2 at any time up to and
including the close of business (5:00 p.m. Atlantic time) on July 30, 2001 or
the last business day preceding any adjournment of the Meeting, as applicable,
at which the proxy is to be used, or (ii) with the Chairman of the Meeting,
prior to its commencement, on the day of the Meeting or any adjournment thereof;
or (c) in any other manner permitted by law.
If the prior instructions were conveyed by use of the Internet as described
above, new instructions by mail, hand delivery or use of the Internet within the
respective time frames set forth above will revoke the prior instructions.
EXERCISE OF DISCRETION BY PROXY HOLDERS
Shares represented by properly executed proxies in favour of the persons named
in the enclosed Proxy Form will be voted on any duly requested ballot. Where
the Shareholder's Proxy Form specifies a choice with respect to the matters
identified in the proxy, the Shares shall be voted for or withheld from voting
in the election of directors and the appointment of auditors, in each case in
accordance with such Shareholder's express directions.
Where Shareholders have properly appointed the persons named in the enclosed
Proxy Form as their proxyholders and have not specified in the Proxy Form the
manner in which the named proxyholders are required to vote the Shares
represented thereby, the Shares represented by any such proxy received by
management will, in each case, be voted in favour of: (1) the election of the
------------
individuals indicated under the heading "Nominees for Election" as directors;
and (2) the appointment of KPMG LLP, Chartered Accountants as the auditors of
Corporation and the authorization of the directors to fix the remuneration of
the auditors.
The enclosed Proxy Form confers discretionary authority upon the persons named
therein with respect to amendments to or variations of matters identified in the
Notice and to other matters that may properly come before the Meeting or any
adjournments thereof. As at the date hereof, the management of the Corporation
knows of no such amendments, variations, or other matters to come before the
Meeting other than those referred to in the Notice and routine matters
incidental to the conduct of the Meeting. If any further or other business is
properly brought before the Meeting, it is intended that proxies will be voted
on such other business matters as the person appointed as proxy then considers
to be proper.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
The authorized share capital of the Corporation consists of an unlimited number
of Common Shares and an unlimited number of Preferred Shares. As at the close
of business on June 19, 2001 there were 24,598,442 Common Shares and no
Preferred Shares outstanding.
Shareholders at the close of business on Monday, June 25, 2001 (the "Record
Date") will be entitled to vote at the Meeting or at any adjournment thereof,
either in person or by proxy. Shareholders are entitled to one vote at the
Meeting or any adjournment thereof for each Common Share registered in the
Shareholder's name on the Record Date, except that a transferee of Shares
acquired subsequent to the Record Date shall be entitled to vote such Shares at
the Meeting or any adjournment thereof if such transferee produces properly
endorsed certificates for such Shares, or otherwise establishes that such
transferee owns such Shares, and demands not later than ten days before the
Meeting that such transferee's name be included in the list of the Shareholders
entitled to receive the Notice prepared by the Corporation at the Record Date.
3
To the knowledge of the directors and senior officers of the Corporation, as of
the close of business on June 19, 2001, except as follows no person or company
owns, beneficially or of record, directly or indirectly, or exercises control or
direction over, more than 10% of the Common Shares:
Number of Shares Percentage of Shares
---------------- --------------------
Beneficially Owned Beneficially Owned
Name of Beneficial Owner ------------------ ------------------
- ------------------------
Aliant Inc. ("Aliant") 7,209,751 29.31%
(held through Aliant Horizons Inc.)..................
Compagnie Financiere Alcatel ("Alcatel")
(held through its subsidiary, Alcatel Canada Inc.)... 3,986,857 16.21%
Whitecastle Investments Limited ("Whitecastle")...... 2,464,927 10.02%
Celtic House International ("Celtic House")
(held through 506048 N B Ltd.)....................... 2,454,676 9.98%
As of the close of business on June 19, 2001, CDS & Co. as nominee on behalf of
The Canadian Depository for Securities Limited ("CDS") was the registered holder
of 7,127,467 Common Shares representing approximately 28.97% of the outstanding
Common Shares and Cede & Co as nominee on behalf of The Depository Trust Company
("DTC") was the registered holder of 3,055,138 Common Shares representing
approximately 12.42% of the outstanding Common Shares. It is, however,
management's understanding that the Common Shares registered in the name of CDS
or DTC are held by various brokers and other parties on behalf of clients and
others (including certain of the principal holders named above).
Except as disclosed above, as at June 20, 2001, the current directors and
officers of the Corporation as a group owns directly or indirectly or exercised
control or direction over a total of 191,451 Common Shares representing
approximately 0.78% of the issued and outstanding Common Shares.
ELECTION OF DIRECTORS
The number of directors of the Corporation to be elected at the Meeting is nine.
Each of the nominees for election as director is currently a director of the
Corporation.
On any ballot that may be called for in the election of directors, the persons
named in the enclosed Proxy Form intend to vote in favour of each of the
proposed nominees whose names are set forth below with respect to each of the
Shares represented by such proxy, unless the shareholder who has given such
proxy has directed that the Shares be otherwise voted or withheld from voting in
the election of directors.
Management does not contemplate that any of the proposed nominees will be unable
to serve as a director, but if that should occur for any reason prior to the
Meeting, the persons named in the enclosed Proxy Form, unless directed to
withhold from voting, shall have the right to vote for other nominees at their
discretion. Each director elected will hold office until the next annual
meeting of shareholders or until his successor is appointed, unless such
person's office is earlier vacated.
Nominees for Election
The following table sets out the name of each of the persons proposed by
management to be nominated for election as a director. The table and the
narrative below describes the principal positions and offices held by each of
them in the Corporation, the principal occupation or employment of each of them,
the
4
month and year in which each was first elected as a director of the Corporation
and the number of Shares that each has advised he beneficially owned, directly
or indirectly, or are subject to his control or direction as of June 20, 2001.
Number of Common Shares Owned
Name, Beneficially or of Record
Municipality of Residence and Position with Corporation and Directly or Indirectly, as of
Director Since Principal Occupation June 20, 2001
- -------------------------------- ----------------------------------- -------------------------------
Marcel LeBrun President and Chief Executive 14,545
Fredericton, New Brunswick Officer and Director
January 1998
Peter G. Jollymore/(2)(3)/ Chairman of the Board and Director 27,702
Saint John, New Brunswick
January 1998
Gregory Allemann Director Nil
Austin, Texas
April 2001
Joe C. Culp/(1)(2)/ Director 22,273
Austin, Texas
August 1999
Carey Diamond/(1)(3)/ Director Nil/(4)/
Toronto, Ontario
January 2000
Dr. Terence Matthews Director Nil/(5)/
Kanata, Ontario
January 1998
Robert E. Neal/(1)/ Director 7,819/(6)/
Quispamsis, New Brunswick
June 1999
Gerald L. Pond/(2)(3)/ Director 43,338/(6)/
Rothesay, New Brunswick
January 1998
Paul Spruyt Director Nil/(7)/
Heverlee, Belgium
July 2000
Notes:
/(1)/ Member of the Audit Committee
/(2)/ Member of the Human Resources Committee
/(3)/ Member of the Corporate Governance Committee
/(4)/ Whitecastle beneficially owns 2,464,927 Common Shares and Mr. Diamond is
the President and Chief Executive Officer of Whitecastle.
/(5)/ Celtic House beneficially own 2,454,676 Common Shares and Dr. Matthews is
the principal of Celtic House.
/(6)/ This excludes 7,209,751 Common Shares beneficially owned by Aliant. Mr.
Pond is an officer of Aliant and Mr. Neal is an officer of a subsidiary
of Aliant.
/(7)/ Alcatel beneficially owns 3,986,857 Common Shares and Mr. Spruyt is the
General Manager of the VDSL Virtual Company of Alcatel.
5
The background of each of these individuals is also provided below.
Marcel LeBrun. Mr. LeBrun co-founded ImagicTV and has served as President
and Chief Executive Officer since January 1998. From June 1992 to December 1997,
Mr. LeBrun held various positions at NBTel Inc. ("NBTel"), including Managing
Director of E-Business Services and other senior technical, marketing and
strategic business planning positions. Mr. LeBrun has a Bachelor of Science in
Electrical and Computer Engineering from the University of New Brunswick.
Peter G. Jollymore. Mr. Jollymore has been Chairman of the Board of
ImagicTV since January 1998. He is also currently the Acting Dean of the
Faculty of Business at the University of New Brunswick in Saint John, New
Brunswick. From 1967 until his retirement in December 1998, Mr. Jollymore served
in various positions at NBTel from design engineer to Vice President of NBTel
and its affiliate Bruncor Inc. ("Bruncor"). He serves on the Board of Directors
of the Business Development Bank of Canada and Callistro Multimedia Inc., a
computer software company producing video-on-demand applications. He has a
Bachelor of Science in Engineering from Mount Allison University and a Bachelor
of Engineering from the Technical University of Nova Scotia.
Greg Allemann. Since March 2001, Mr. Allemann has served as Vice President
of Marketing and Sales for WebOffice, Inc., a privately held communications
infrastructure company. Mr. Allemann is also President of Allemann Associates, a
consulting firm for the communications industry. In 2000, Mr. Allemann retired
from SBC Communications after a 30-year career in which he held a variety of
positions in technology research, network planning, network operations, product
development, market planning, and procurement. During his last eight years with
SBC, Mr. Allemann was Vice President and Executive Director of Broadband
Infrastructure and Services for SBC's R&D subsidiary (SBC Technology Resources,
Inc.). He has served and chaired the Texas Telecommunications Engineering
Consortium and the Advisory Board of the University of Texas Electrical
Engineering Department.
Joe C. Culp. Since 1990, Mr. Culp has served as President of Culp
Communications Associates, a management consulting firm for the
telecommunications industry. Mr. Culp has served as President of Lightnet, a
fibre optic telecommunications carrier that Southern New England Telephone
Company (now SBC Corporation) and CSX Corporation owned. He has also served as
President of the Telecom Group of Rockwell International, a provider of
electronic controls and telecommunications equipment. Mr. Culp currently serves
on the Board of Directors of two privately-held telecommunications companies. He
has served on the Advisory Board of the telecommunications group of the
University of Texas, Arlington and the University of Arkansas.
Carey Diamond. Since 1996, he has served as President and Chief Executive
Officer of Whitecastle, a private investment company in Canada and as managing
director of its venture capital division Whitecap Venture Partners. From 1989 to
1996, Mr. Diamond served as Executive Vice President of Whitecastle. He
currently serves on the Board of Directors of Alterna Technologies Group Inc.,
Photonami Inc. and Texar Corporation, all privately held Canadian high
technology companies.
Dr. Terence H. Matthews. Dr. Matthews founded Newbridge Networks
Corporation, a company that designs, manufactures, markets and services wide
area network solutions, in March 1986 and served as Chairman of the Board and
Chief Executive Officer of Newbridge from its inception to May 2000. Dr.
Matthews was a co-founder of Mitel Corporation, a designer and manufacturer of
telecommunications integrated circuit devices. He is also the principal of
Celtic House. Since June 2000, he has been Chairman and Chief Executive Officer
of March Networks Corp., a networked video applications company.
6
Robert E. Neal. Since June 2000, he has served as President of Innovatia
Inc., a company within the Aliant emerging business group that focuses on the
development and sale of Internet-based technology. Mr. Neal joined NBTel in 1979
and since that time has held various positions with NBTel and its affiliates,
including Vice President from September 1998 to February 2000.
Gerald L. Pond. From November 1994 to March 1999, Mr. Pond served as
President and Chief Executive Officer of Bruncor. Since March 1999, Mr. Pond has
served as Executive Vice President of Aliant. Mr. Pond is also the President of
Aliant Telecom and Emerging Business. He is currently serving on the Board of
Directors of Innovatia and Prexar Inc., both Aliant affiliates.
Paul Spruyt. Since September 1999, he has served as General Manager of VDSL
Virtual Company of Alcatel, a corporation which builds next generation networks,
delivering integrated end-to-end voice and data communications solutions. From
November 1997 to August 1999, he was Project Manager of Metallic Access Systems
for Alcatel and from August 1995 to October 1997, he was Project Manager of
Twisted Pair Access Systems for Alcatel.
Audit Committee
ImagicTV is required by applicable law to have an audit committee consisting of
at least three directors, a majority of whom must be independent, non-executive
directors. The audit committee currently has three members: Joe Culp, Chairman,
Carey Diamond and Robert Neal. The audit committee is responsible for, among
other things: (i) recommending the annual appointment of the Corporation's
auditors; (ii) reviewing the independence of the Corporation's auditors; (iii)
reviewing and approving interim and annual financial statements with management
and the Corporation's auditors; (iv) assessing accounting principles used by the
Corporation in financial reporting; and (v) reviewing the adequacy of the
Corporation's internal control procedures.
Corporate Governance
The Toronto Stock Exchange Committee on Corporate Governance in Canada issued a
report setting out a series of guidelines for effective corporate governance.
These guidelines deal with the composition, mandate, and objectives of boards of
directors and their committees, the independence of corporate boards, the
effectiveness and education of board members and other matters dealing with
corporate governance. It is a requirement that each corporation that is listed
on The Toronto Stock Exchange annually disclose its approach to corporate
governance with reference to the guidelines. The disclosure is attached to this
Circular as Schedule "A".
Corporate Governance Committee
The Corporate Governance Committee consists of Carey Diamond, Chairman, Peter
Jollymore and Gerald Pond. The committee's mandate is to develop and monitor our
approach to corporate governance issues, establish procedures for the
identification of new nominees to our board, develop and implement orientation
procedures for new directors and assess the effectiveness of our board and its
committees.
Human Resources Committee
Pursuant to the 2000 Share Option Plan, the Human Resources Committee ("HR
Committee") must be comprised of at least two non-employee directors. The HR
Committee currently consists of Peter Jollymore, Chairman, Gerald Pond and Joe
Culp. The committee's mandate is to establish salaries, incentives, and other
forms of compensation for our directors, executive officers, employees, and
consultants. The HR Committee also administers the Corporation's other benefit
plans.
7
EXECUTIVE COMPENSATION
Report on Executive Compensation
Part of the mandate of the HR Committee is to periodically review the
compensation structure of the Corporation with respect to its executive officers
to ensure that the Corporation continues to attract and retain quality and
experienced individuals to its management team and to motivate these individuals
to perform to the best of their ability and in the best interests of the
Corporation. The HR Committee makes recommendations with respect to the
compensation of the Corporation's executive officers to the Board of Directors,
which gives final approval with respect to any executive compensation matters
and issues. The HR Committee compares remuneration for executive officers of
the Corporation to the remuneration for similar executives in relevant markets.
In the case of newly hired employees, the individual's performance and
compensation level in his or her prior positions will also be a determining
factor.
The key components for the compensation of the executive officers of the
Corporation are base salaries, bonuses and stock options. It is the policy of
the Corporation that the base salaries paid to its executive officers, in
addition to the criteria set out above, reflect the individual responsibility
and experience of the executive officer and the contribution that is expected
from the executive officer. Base salaries and bonuses are reviewed by the HR
Committee on an annual basis to ensure that these criteria are satisfied. Stock
options under the Corporation's stock option plan are granted by the Board of
Directors to executive officers from time to time as a long-term performance
incentive.
The foregoing report is submitted on behalf of the HR Committee.
Compensation of Executive Officers
The following table sets forth the compensation paid to Marcel LeBrun, Norman
Bier, Doug Harrington, Marjean Henderson, Gerry Verner and Allan Cameron (the
"Named Executive Officers") for each of the Corporation's three most recently
completed financial years. The Named Executive Officers are the only persons
for whom executive compensation disclosure is required under applicable
securities laws. The Corporation has not adopted any long-term incentive plans.
All dollar amounts in this Circular are expressed in U.S. dollars, except where
indicated to the contrary. References to "$" or "U.S.$" are to U.S. dollars and
references to "C$" are to Canadian dollars.
8
Summary Compensation Table for the Fiscal Year Ended February 28, 2001
Annual Compensation Long-Term
Compensation
-------------------------------------------------------------------------------------
Awards
------------------
Other Annual Securities Under All Other
Salary Bonus Compensation/(2)/ Options Compensation/(3)/
Name and Principal Position Year/(1)/ ($) ($) ($) (#) ($)
- -----------------------------------------------------------------------------------------------------------------------------
Marcel LeBrun, President and 2001 163,400 50,200 21,600 - -
Chief Executive Officer 2000 81,300 - 7,050 186,176 -
1999 68,700 - 4,400 - -
- -----------------------------------------------------------------------------------------------------------------------------
Norman Bier, 2001 105,800 - - 11,636 99,300
Vice President of Sales for 2000 26,800 - - 29,090 12,000
North and South America/(4)/ 1999 - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Doug Harrington, Vice 2001 119,800 20,100 18,900 - -
President of Sales/(5)/ 2000 69,600 - 6,250 69,816 -
1999 60,000 - 2,600 104,724 -
- -----------------------------------------------------------------------------------------------------------------------------
Marjean Henderson, Vice 2001 117,100 - 7,630 197,812 -
President and Chief 2000 - - - - -
Financial Officer 1999 - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Gerry Verner, 2001 94,000 13,400 19,000 - -
Vice President of Marketing 2000 63,700 - 6,150 104,724 -
and Business Development 1999 15,200 - - 69,816 -
- -----------------------------------------------------------------------------------------------------------------------------
Allan Cameron, 2001 94,700 - 19,000 - -
Vice President of Technology 2000 73,100 - 6,550 162,904 -
1999 67,500 - 3,700 - -
- -----------------------------------------------------------------------------------------------------------------------------
Notes:
(1) The amounts are determined for the applicable fiscal year ended on the
last day of February.
(2) Amounts include payments made by us as matching registered retirement
savings and pension plan contributions to those made by our
executive officers and an automobile allowance.
(3) Amounts include commissions paid to the executive officers.
(4) Mr. Bier joined the Corporation in December 1999 and has served as an
executive officer since April 30, 2001
(5) Mr. Harrington's employment with the Corporation ceased on March 19,
2001.
9
The following table sets forth individual grants of stock options during the
fiscal year ended February 28, 2001 to the Named Executive Officers:
Option Grants during the Fiscal Year ended February 28, 2001
- -----------------------------------------------------------------------------------------------------------------------
% of Total Market Value
Options of Shares
Shares Granted to Underlying
Under Employees Exercise or Options at
Options in Fiscal Base Price Date of Grant
Name Granted Year ($ per Share) ($ per Share) Expiration Date
- -----------------------------------------------------------------------------------------------------------------------
Marcel LeBrun - - - - -
- -----------------------------------------------------------------------------------------------------------------------
Norman Bier 11,636 0.73% 11.17 11.17/(1)/ 2007/09/13
- -----------------------------------------------------------------------------------------------------------------------
Doug Harrington - - - - -
- -----------------------------------------------------------------------------------------------------------------------
Marjean Henderson 197,812 12.45% 1.54 1.54/(1)/ 2007/07/31
- -----------------------------------------------------------------------------------------------------------------------
Gerry Verner - - - - -
- -----------------------------------------------------------------------------------------------------------------------
Allan Cameron - - - - -
- -----------------------------------------------------------------------------------------------------------------------
Note:
/(1)/ There was no public market for the Common Shares on the dates of the
option grants. Therefore, the amounts set forth in this column represent
the fair market value of the Common Shares as of the dates, as determined
by the Corporation's Board of Directors.
10
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
The officers named in the summary compensation table did not exercise any
options during the fiscal year ended February 28, 2001. The following table sets
forth the estimated fair market value as of February 28, 2001 of the exercisable
and unexercisable options held by these officers.
-----------------------------------------------------------------------------------------------------------------------------
Number of Common
Shares Underlying Value of Unexercised
Unexercised Options In-The-Money Options at
at Fiscal Year End (#) Fiscal Year End ($)/(1)/
-----------------------------------------------------------------------------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
-----------------------------------------------------------------------------------------------------------------------------
Marcel LeBrun 133,814 168,722 $313,648 $335,873
-----------------------------------------------------------------------------------------------------------------------------
Norman Bier 7,273 33,453 14,982 44,943
-----------------------------------------------------------------------------------------------------------------------------
Doug Harrington 69,817 104,723 171,037 240,820
-----------------------------------------------------------------------------------------------------------------------------
Marjean Henderson - 197,812 - 320,455
-----------------------------------------------------------------------------------------------------------------------------
Gerry Verner 61,089 113,451 121,654 206,481
-----------------------------------------------------------------------------------------------------------------------------
Allan Cameron 123,633 149,813 289,098 292,470
-----------------------------------------------------------------------------------------------------------------------------
Note:
/(1)/ The value of an "in-the-money" option represents the difference between
the aggregate estimated fair market value of the Common Shares issuable
upon exercise of the option and the aggregate exercise price of the
option. The fair market value of the Common Shares at the close of
business on February 28, 2001 was $3.16 as quoted on the Nasdaq National
Market.
Compensation of Directors
During the fiscal year ended February 28, 2001, no director received monetary
compensation for serving as a director of the Corporation other than
reimbursement for expenses incurred in attending meetings. The following
directors received options to purchase Common Shares pursuant to the
Corporation's stock option plan in the fiscal year ended February 28, 2001 as
compensation for acting as directors:
- -----------------------------------------------------------------------------------------------------
Common Shares Exercise Price
Name of Director Under Options ($ per share) Date of Grant Expiration Date
Granted
- -----------------------------------------------------------------------------------------------------
Joe C. Culp 11,636 $1.54 2000/03/23 2007/03/23
11,636 $1.54 2000/08/10 2007/08/10
- -----------------------------------------------------------------------------------------------------
Michael McCloskey 23,272 $1.54 2000/08/10 2007/08/10
- -----------------------------------------------------------------------------------------------------
Peter Jollymore 29,090 $1.54 2000/08/10 2007/08/10
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Effective May 30, 2001, the Corporation adopted a new compensation structure for
directors. On such date, Greg Allemann was granted options to purchase 25,000
Common Shares at an exercise price of C$1.95 to vest over three years at a rate
of 1/36 per month from date of grant with an expiration date of seven years from
date of grant. Annually, each of Peter Jollymore, Joe Culp and Greg Allemann,
upon confirmation of their appointment for the following year at the Annual
Meeting of Shareholders, will be granted options to purchase 10,000 Common
Shares at an exercise price equal to the closing price of Common Shares on The
Toronto Stock Exchange (the "TSE") on the day immediately prior to the date of
11
grant. These options, which are to be granted 72 hours after the Annual Meeting
of Shareholders, will vest 12 months from the date of grant and will have an the
expiration date of seven years from date of grant. Annually, 72 hours after the
Annual Meeting of Shareholders, each director who is a chairman of a committee
of the Board of Directors and not a member of management of the Corporation will
receive options to purchase an additional 5,000 Common Shares at an exercise
price equal to the closing price of Common Shares on the TSE on the day
immediately prior to the date of grant, such options to vest 12 months from the
date of grant and to an expiration date of seven years from date of grant. Joe
Culp and Greg Allemann each receive a payment of $1,000 per day, per meeting
attended in person, including travel time.
Directors' and Officers' Liability Insurance
The Corporation maintains liability insurance for directors and officers of the
Corporation. The policy does not distinguish between the liability insurance
for its directors and officers, the coverage being the same for both groups.
The premium for the twelve-month period ending November 21, 2001 is $363,000,
all of which is borne by the Corporation. The policy limit is $20,000,000 with
a $200,000 retention for securities claims and a $100,000 retention for non-
securities claims. The individual directors and officers of the Corporation are
insured against losses arising from claims against them for certain of their
acts, errors or omissions in such capacity. The Corporation is insured against
losses arising out of any liability to indemnify a director or officer.
Employment Agreements
Each of the Named Executive Officers, except Mr. Bier, entered into an
employment agreement with the Corporation dated July 17, 2000. The Corporation
and Mr. Bier are in the process of settling the terms of his employment
agreement.
Pursuant to these agreements, the annual base salary for each officer is as
follows: Mr. LeBrun, $220,000; Mr. Verner, $110,000; Ms. Henderson, $210,000;
and Mr. Cameron, $110,000. Mr. Harrington's employment was terminated on March
19, 2001. These base salaries are subject to review by our Board of Directors
in its discretion. Further, the officers (other than Mr. Bier) are entitled to
an annual bonus, up to a maximum of 50% of his or her annual base salary, as
determined by our Board of Directors in its discretion based upon target profit
and revenue performance levels and upon individual performance. In addition,
pursuant to the terms of the employment agreements with each of the Named
Executive Officers, (other than Mr. Bier) he or she is subject to non-
competition provisions during his or her employment and for 12 months thereafter
and to confidentiality restrictions.
With respect to each of the Named Executive Officers (other than Mr. Bier), the
employment agreement provides that in the event of termination without cause the
executive officer is entitled to monthly severance payments equal to his or her
respective base salary for one year, continued benefits coverage for one year
and the pro rata portion of any earned bonus and to exercise vested options and
any unvested options that otherwise would have vested in the 12-month period
following the date of termination. In the event of termination for cause, the
Named Executive Officer (other than Mr. Bier) is entitled to receive his or her
respective salary and bonus through the date of termination and to exercise
vested options for which the executive officer had provided notice of exercise
prior to the date of termination.
In the event of a change of control of ImagicTV, which is defined as the
acquisition by a person of 51% or more of our outstanding voting shares, the
employment agreements with the Named Executive Officers other than Mr. Bier,
provide that the Corporation may terminate the employment of the Executive
Officer. Each Named Executive Officer (other than Mr. Bier) also has the right
to terminate his or her employment in the event of a change of control. The
Named Executive Officers (other than Mr. Bier) are each entitled
12
to a severance payment equal to his or her respective accrued base salary and
the pro-rated portion of any earned bonus. In addition each Named Executive
Officer (other than Mr. Bier) has the right, on termination, to exercise, within
90 days, any options granted to that executive officer, regardless of vesting
date.
Performance Graph
The following performance graph illustrates for the fiscal periods
indicated, the cumulative return to Shareholders of an investment in Common
Shares compared to the cumulative total shareholder return on the TSE 300 Total
Return, the Nasdaq Composite and the Nasdaq Computer indicies assuming an
investment of $100 on November 21, 2000, the date upon which Common Shares were
first listed on the TSE and were first quoted on the Nasdaq National Market.
[GRAPH]
Table Showing Relative Cumulative Total Return Data Used in Stock Performance Graph
- ---------------------------------------------------------------------------------------------------------------
November 21, 2000 December 31, 2000 February 28, 2001
- ---------------------------------------------------------------------------------------------------------------
TSE 300 Total Return $100.00 $99.11 $89.63
- ---------------------------------------------------------------------------------------------------------------
Nasdaq Composite $100.00 $86.04 $74.94
- ---------------------------------------------------------------------------------------------------------------
Nasdaq Computer $100.00 $77.24 $64.13
- ---------------------------------------------------------------------------------------------------------------
ImagicTV $100.00 $59.64 $34.64
- ---------------------------------------------------------------------------------------------------------------
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
As at June 20, 2001, no amount was owed to the Corporation or any of its
subsidiaries by any director, executive officer or senior officer of the
Corporation.
13
INTERESTS OF INSIDERS IN MATERIAL TRANSACTIONS
No insider or proposed nominee for election as a director, and no associate or
affiliate of any of the foregoing persons, has or had any material interest,
direct or indirect, in any transaction during the fiscal year ended February 28,
2001, or in any proposed transaction which in either such case has materially
affected or will materially affect the Corporation or any of its subsidiaries,
other than the following:
Technology Agreements
On April 19, 1999, the Corporation entered into a licensing agreement with
NBTel. Pursuant to this agreement, NBTel received a perpetual, non-exclusive
license to use the Corporation's DTV Manager software ("DTV Manager") in the
Province of New Brunswick for cash consideration of C$500,000 and future one-
time per subscriber royalty payments decreasing from C$150 to C$80 based on the
number of active NBTel subscribers to DTV Manager in New Brunswick. In addition,
the license agreement provides for the annual payment of fees for maintenance
and technical support services in an amount equal to 20% of the total license
fees, including the initial fee and cumulative subscriber royalties. If
requested by NBTel, the Corporation has agreed to provide consulting and
training services at then current rates.
On December 16, 1999, NBTel assigned the license agreement to Aliant, and the
license agreement was amended to include a license for the Corporation's pcVu
software product and to expand the geographic territory of the license to the
provinces of Nova Scotia, Prince Edward Island and Newfoundland on an exclusive
basis. In connection with the assignment and amendment, Aliant agreed to pay
the Corporation cash consideration amounting to C$900,000, of which C$500,000
was paid on January 31, 2000, C$200,000 was paid on January 31, 2001 and
C$200,000 is due on January 31, 2002. Under the amended agreement, the future
one-time per subscriber royalty payments based on the number of subscribers also
applies to subscribers in Nova Scotia, Prince Edward Island and Newfoundland. In
accordance with the amended agreement, MTT, the incumbent local exchange carrier
in the Province of Nova Scotia and a subsidiary of Aliant, has licensed and has
commercially deployed DTV Manager.
On January 16, 2001, the license agreement was further amended to include a sale
of 40,000 subscriber-based licenses for C$3,200,000, payable in non-refundable
instalments of C$1,600,000 paid to the Corporation on January 16, 2001 and
C$1,600,000 due on February 28, 2002.
Through February 28, 2001, the Corporation recorded revenues from NBTel
totalling C$1,866,100 in one-time per subscriber royalty payments. In the fiscal
year ended February 28, 2001, NBTel made payments to the Corporation for
maintenance and technical support services of C$100,000.
In addition, the Corporation has supplied NBTel and Aliant with set-top boxes at
little or no mark-up above the Corporation's cost. The Corporation received
revenues of $462,000 in fiscal 1999, $180,000 in fiscal 2000 and $1.0 million
in fiscal 2001 from the sales of set-top boxes to NBTel and Aliant.
In November 1999, the Corporation entered into a license agreement with
Newbridge Networks Corporation ("Newbridge"), which was then one of the
Corporation's principal shareholders and is now part of Alcatel. Pursuant to
this agreement, Newbridge received a license to use DTV Manager for internal
testing purposes at six technical laboratories. The license also permitted
Newbridge to use DTV Manager in sales and marketing demonstrations of its
hardware products. In exchange for the license, the Corporation received
switching equipment from Newbridge that enables the prioritized transmission of
voice, Internet and television data in high-speed, networked environments. The
Corporation has used this equipment for research and development purposes. The
transaction was recorded at the fair value of the equipment, which amounted to
$103,000. In connection with the transaction, the Corporation recorded
14
license fee revenues for the same amount. In February 2000, the Corporation
amended the license agreement to provide Newbridge with the opportunity to
purchase additional twelve-month site licenses for demonstration purposes. As of
February 28, 2001 the Corporation had received aggregate cash consideration of
C$40,000 for these additional licenses and $17,000 for a 90-day trial license.
The Corporation also currently supplies Newbridge with set-top boxes for
laboratory test installations at little or no mark-up above the Corporation's
cost. The Corporation received $23,000 in fiscal 2000 and $17,000 in fiscal 2001
from the sales of set-top boxes to Newbridge.
Financings, Loans and Inter-Company Arrangements
During the fiscal year ended February 28, 2000, the Minister of Economic
Development, Tourism and Culture for the Province of New Brunswick, through an
application filed by Newbridge, indirectly granted the Corporation a repayable
government assistance loan in the amount of C$2,560,000 and a forgivable loan in
the amount of C$640,000, to assist the Corporation in creating research and
development employment in the Province of New Brunswick. The forgivable loan was
fully forgiven and recognized in the statement of operations as forgiveness of
debt. The repayable loan is repayable in annual installments equal to 1.5% of
the license fee revenues of the immediately preceding year, and the balance, if
any, is due on February 25, 2006. The repayable loan is interest-free until
February 25, 2006 and, if not paid at that date, thereafter will bear interest
at 6.3% per annum. As of February 28, 2001, the Corporation has repaid C$34,395
of the principal of the repayable loan.
In addition, the Corporation may be required to accelerate its repayment of the
repayable loan if the total number of the Corporation's full-time employees
employed in the Province of New Brunswick falls below 92 at any time during the
fiscal year ending February 28, 2002. As of February 28, 2001, the Corporation
employed approximately 180 full-time employees in the Province of New Brunswick.
In September 2000, the Corporation issued warrants to purchase Common Shares to
four of the Corporation's principal shareholders at the time and one other
shareholder for an aggregate purchase price of $10,000,000. These warrants were
automatically exercised in October 2000. In accordance with the terms of the
warrants, each warrantholder was entitled to receive upon completion of a sale
of Common Shares to outside investors, for no additional consideration, a number
of shares per warrant which reflected the price paid per Common Share by outside
investors. As a result of the October 2000 sale of Common Shares to America
Online, Inc. and Cisco Systems, Inc. at $11.00 per share, 1.11 Common Shares per
warrant were issued upon exercise of the warrants. This resulted in the issuance
of the following numbers of Common Shares to these four principal shareholders:
205,157 to Alcatel, 371,001 to Aliant, 126,312 to Celtic House, and 137,727 to
Whitecastle.
Leases
The Corporation subleases a portion of its principal executive offices from
NBTel. Of the approximately 33,000 square feet that the Corporation occupies at
its principal executive offices, it subleases approximately 23,000 square feet
from NBTel at a cost of approximately $338,000 per year. The lease on such
facility expires in December 2002, subject to a renewal option of one additional
year.
APPOINTMENT OF AUDITORS
KPMG LLP, Chartered Accountants, will be nominated for re-appointment as
auditors of the Corporation until the next annual meeting of shareholders at a
remuneration to be fixed by the directors. KPMG LLP were first appointed
auditors on February 22, 2000 and have served continuously as auditors of the
Corporation since such date.
15
OTHER BUSINESS
The Corporation knows of no matter to come before the Meeting other than the
matters referred to in the Notice.
BOARD APPROVAL
The contents and sending of this Circular have been approved by the Board of
Directors.
/s/ Sue MacQuarrie
-----------------------------
Sue MacQuarrie
Corporate Secretary
June 20, 2001
16
Schedule "A"
TSE Corporate Governance
- ------------------------
Committee Guidelines: Comments
- --------------------- --------
1. The Board of Directors should . The Board of Directors is
explicitly assume responsibility responsible for the
for stewardship for the supervision of management of
Corporation, and specifically the Corporation's business
for: and its affairs. It has the
statutory authority and
obligation to protect and
enhance the assets of the
Corporation in the interest
of all shareholders. The
Corporate Governance
Guidelines, which include the
terms of reference of the
Board of Directors and
individual directors, set out
the purpose, procedures and
organization, and
responsibilities and duties
of the Board of Directors and
its committees.
(a) adoption of a strategic . The Board of Directors has
planning process the responsibility to review
and approve the stated
missions of the business, its
objectives and goals, and
the strategy by which it
proposes to reach those
goals.
. The initiative for developing
the corporate strategy comes
from management. The Board of
Directors has the power to
make suggestions and
participates in the
discussion of the strategy,
responds to and contributes
ideas and approves or amends
the strategy. However,
management leads this
process. The Board of
Directors is responsible for
monitoring management's
success in implementing the
strategy.
(b) identification of principal . In consultation with the
risks and implementing risk management, the
management systems independent auditors, and
the internal auditors, the
Audit Committee considers the
integrity of the
Corporation's financial
reporting processes and
controls. The Committee also
discusses significant
financial risk exposures and
the steps management has
taken to monitor, control,
and report such exposures.
The Audit Committee also
reviews significant findings
prepared by the independent
auditors and the internal
auditing department together
with management's responses.
17
TSE Corporate Governance
- ------------------------
Committee Guidelines: Comments
- --------------------- --------
(c) succession planning and . The HR Committee reviews and
monitoring senior management annually approves,
management's succession plans
for executive management
(including specific
development plans and career
planning for potential
successors) and makes
recommendations to the Board
of Directors.
. Succession and management
development planning is one
of the written objectives of
the Chief Executive Officer.
The Chief Executive Officer
is required to create,
maintain and review with the
Board of Directors an annual
plan for the development and
succession of senior
management.
. The performance of management
is annually reviewed.
(d) communication policy . The Chief Executive Officer
is required to ensure there
is appropriate communication
with shareholders and the
investment community in order
to promote an equitable
market value for the
Corporation's shares. Through
the Audit Committee all
public financial information
is reviewed and recommended
to the Board of Directors for
approval prior to its
release.
(e) integrity of internal control . The Board of Directors
and management ensures the integrity of
information systems internal control and
management information
systems through its
delegation to various
committees.
2. Majority of directors are . An "unrelated" director
"unrelated". under the policy is:
1. independent from
management;
2. free from any interest
and any business or other
relationship which could
materially interfere with
his or her ability to act
in the best interests of
the Corporation; and
3. able to exercise
objective judgement
independent from
management.
18
TSE Corporate Governance
- ------------------------
Committee Guidelines: Comments
- --------------------- --------
3. Disclose whether each director . The Corporation does not
is "unrelated". have a "significant
shareholder". The guidelines
define a "significant
shareholder" as a shareholder
with the ability to exercise
a majority of the votes for
the election of the Board of
Directors. Mr. LeBrun,
President and Chief Executive
Officer of the Corporation,
is a related director. If
elected at the Meeting, Mr.
LeBrun will be the only
director who is not an
unrelated director.
. The remainder of the present
directors and nominees for
election to the Board of
Directors are unrelated.
4. Appoint a committee . The Corporate Governance
responsible for Committee is required to
appointment/assessment of assess and make
directors, composed of a recommendations regarding
majority of unrelated directors. the Board of Directors'
effectiveness and to
establish a process for
identifying, recruiting,
appointing, and reappointing
directors. The Corporate
Governance Committee
is presently composed
exclusively of unrelated
directors.
5. Implement a process for . The Corporate Governance
assessing the effectiveness of Committee carries out an
the Board, its committees annual assessment process
and individual directors. whereby the effectiveness
of the Board as a whole and
individual directors will
reviewed, and the Board of
Directors' relationship with
management is assessed.
. Individual director
evaluation also takes place
as part of the nominating
process conducted annually by
the Corporate Governance
Committee.
6. Provide orientation and . Management maintains
education programs for new background materials to
directors. assist new and existing
Board members. Such materials
will be subject to periodic
review and approval by the
Corporate Governance
Committee and the Board of
Directors and updated from
time to time.
7. Consider reducing the size of the . The Board of Directors is
Board, with a view to improve small enough for
effectiveness. constructive interaction to
take place but at the same
time large enough to
encompass a broad
representation of skills and
experience.
19
TSE Corporate Governance
- ------------------------
Committee Guidelines: Comments
- --------------------- --------
8. Review compensation of . The Corporate Governance
directors in light of risks and Committee reviews and
responsibilities. recommends to the Board of
Directors the compensation
and benefits of members of
the Board of Directors.
In this respect, the
Committee analyzes market
data, time commitments, fees
payable by other similar
organizations and the
responsibilities of directors
in general.
9. Committees should generally be . All committees are composed
composed of non-management entirely of non-management
directors and the majority of directors, all of whom are
committee members should be unrelated directors. The
unrelated. President and Chief
Executive Officer
participates in meetings of
committees of the Board of
Directors by invitation only.
10. Appoint a committee responsible . The Corporate Governance
for determining the Corporation's Committee is responsible
approach to corporate governance for governance issues,
issues. including recommending to
the Board of Directors for
approval the Corporation's
disclosure in response to the
Guidelines, an annual review
of all terms of reference, a
periodic review of the Board
of Directors and committee
composition and ensuring on
behalf of the Board of
Directors that the corporate
governance system effectively
supports the discharge of its
obligations to the
shareholders of the
Corporation.
11. Define limits to management's
responsibilities by developing
mandates for:
(i) the Board of Directors, and . The Board of Directors has
a broad responsibility for
supervising the management of
the business and affairs of
the Corporation. This is
reflected in its term of
reference. The Board of
Directors has approved a
framework for delegation from
the Board to executive
management.
(ii) the Chief Executive Officer. . There are terms of
reference for the Chief
Executive Officer. As well,
his annual performance
objectives, which are
reviewed and approved by the
Board of Directors,
constitute his mandate and
further define the
responsibilities of
management.
. The Board of Directors
reviews the performance of
the Chief Executive Officer
against such annual
objectives.
20
TSE Corporate Governance
- ------------------------
Committee Guidelines: Comments
- --------------------- --------
12. Establish procedures to enable . The Corporate Governance
the Board to function Committee is responsible
independently of management. for putting structures and
processes in place to ensure
the Board of Directors can
function independently.
. The independence of the Board
of Directors is further
enabled through the
separation of the positions
of Chairman and Chief
Executive Officer.
. A committee may request the
assistance of external
advisors to research,
investigate and report on
matters within a committee's
terms of reference. This
request should be co-
ordinated through the
Chairman of the Board of
Directors and the Chief
Executive Officer. Members of
the Board of Directors can
request at any time, through
the Corporate Governance
Committee, a meeting
restricted to outside members
of the Board of Directors for
the purpose of discussing
matters independently of
management.
13. (i) Establish an Audit Committee . The Audit Committee is
with a specifically defined responsible for reviewing
mandate. audit functions and the
of Directors all public
disclosure information such
as financial statements,
quarterly reports, financial
news releases, annual
information forms,
management's discussion and
analysis and prospectuses.
. The Audit Committee also
ensures that management has
effective internal control
systems and an appropriate
relationship with the
external auditors and meets
regularly with them, without
management present.
(ii) Members of the Audit . The Audit Committee is
Committee should be composed of composed entirely of
only outside directors. outside directors.
14. Implement a system to enable . A request for such can be
individual directors to engage made to the Corporate
outside advisors, at the Governance Committee.
corporation's expense.
21