The Board of Directors shall be responsible for overseeing the business
of the Corporation which shall be conducted on a day-to-day basis by
management engaged with the approval of the Board. Corporate policies
shall be established by the Board, which shall supervise management to
ensure that those policies are carried out. The Board shall approve all
significant decisions, supervise their implementation and review their
(a) Strategic Planning Process
The Board shall be involved with management on an ongoing basis in the
development and implementation of the Corporation's strategic plan, and
shall be responsible for its approval. A specific review of the plan
shall form part of the Agenda for at least one Board meeting in each
(b) Principal Risks
The identification of the principal risks of the Corporation's business
shall be contained in the Management Discussion and Analysis attached to
the annual and quarterly financial statements and appropriate steps
shall be taken to manage those risks.
(c) Succession Planning
The Board is responsible for choosing the President and the Chief
Executive Officer, appointing senior management and for monitoring their
performance. One of the criteria in the recruitment of management
personal is an evaluation of the potential for advancement to more
senior positions, and, where possible, management endeavours to develop
(d) Communications Policy
The Board or a committee thereof, approves all of the Corporation's
major communications, including annual and quarterly reports, financing
documents and press releases. The primary responsibility for monitoring
and preparing communications is assigned to the Chief Financial Officer
who responds to shareholder inquiries.
(e) Integrity of Internal Control
The Board, through its Audit Committee, examines the effectiveness of
the Corporation's internal control processes and management information
systems and consults with the Corporation's auditors to ensure the
integrity of these systems.
David F. Grant, Roger Dent, and Sébastien Goulet are currently directors
of California Nanotechnologies Corp. which is a reporting issuer. Roger
Dent is also CEO and director of Quinsam Capital Corporation and
director of Quia Resources Inc. and AcuityAds Holdings Inc. which are
3. Board Independence
The Chief Executive Officer of the Corporation is the only one of the
four present members of the Board who is an inside director. The
Corporation does not have a significant shareholder.
4. Individual Unrelated Directors
The Board is responsible for determining whether or not each director is
an unrelated director. To do this, the Board analyzes all the
relationships of the directors with the Corporation and its
subsidiaries. David F. Grant is a related director because of his
position as the CEO. The Company retained Cypress Associates LLC
("Cypress") to advise the Company on its review of potential strategic
and financial opportunities. Cypress is a nationally-recognized boutique
investment banking firm, providing mergers and acquisition expertise,
restructuring advisory services, and private placements of debt and
equity securities. Chuck Samkoff is a Managing Director of Cypress and
also a director of Omni-Lite, and as such will recuse himself from board
decisions regarding this review. The other two directors are unrelated
directors. None of the other directors work in the day-to-day operations
of the Corporation.
5. Ethical Business Conduct
The Board of Directors encourages and promotes a culture of ethical
business conduct by monitoring all directors, officers, employees and
consultants on the Corporation and taking corrective action if unethical
conduct is detected.
6. Nomination of Directors
The Corporation does not have a nominating committee. Each director may
present to the Board as a prospective director candidates possessing
qualifications and an interest in serving on the Board.
7. Assessing the Board's Effectiveness
Due to the relatively small size of the Board, the Board as a whole
assumes responsibility for assessing the effectiveness of its individual
8. Orientation and Continuing Education of Directors
Senior management makes regular presentations to the Board at its
meetings and all directors are encouraged to communicate directly with
management and other staff. Directors are invited to tour the
Corporation's facilities and to familiarize themselves with the details
of the Corporation's operations.
9. Effective Board Size
Having regard to the Corporation's relatively small size it is
appropriate that the Board not be large. As an Alberta corporation
carrying on its business through subsidiaries outside of Canada it is a
requirement that at least one quarter of the Board be resident
Canadians. The current Board composition of one resident Canadian and
three members who reside outside of Canada permits the Board to operate
in a prudent and effective manner.
10. Compensation of Directors
To the Corporation's present stage of development compensation has been
restricted to participation in the Corporation's stock option plan. As
the Corporation matures, the subject of other possible forms of
compensation will be considered at a minimum of one meeting each year.
11. Other Board Committees
Due to the relatively small size of the Board, the only committee
established at the present time is the Audit Committee which is made up
entirely of outside directors, Roger Dent, Sébastien Goulet, and Charles
Samkoff. The committee meets four times each year with the auditor and
the Chief Financial Officer to review the Corporation's annual
consolidated financial statements and the recommendations of the
auditors and to recommend approval of the statements by the Board.
12. Approach to Corporate Governance
The Board as a whole has assumed responsibility for the development of
13. Position Descriptions
The Board, including the CEO, is responsible for defining the role of
14. Board Independence
Any two directors may convene a meeting of the Board members apart from
the Chairman and CEO should it be considered necessary and at any such
meeting of outside directors, a Lead Director may be appointed should it
be found appropriate.
15. Audit Committee
The Board has an Audit Committee, the composition and function of which
is discussed under Item 11 above.
16. Outside Advisors
Any director may hire outside advisors which may be at the Corporation's
expense upon the approval of one other director.