UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of MAY, 2006.
Commission File Number: 001-32558
IMA EXPLORATION INC.
--------------------------------------------------------------------------------
(Translation of registrant's name into English)
#709 - 837 West Hastings Street, Vancouver, British Columbia, V6C 3N6, Canada
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F: FORM 20-F [X] FORM 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): _______
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): _______
Indicate by check mark whether the registrant by furnishing the information
contained in this Form, is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
YES [ ] NO [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3- 2(b): 82-_____________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
IMA EXPLORATION INC.
-------------------------------------
Date: May 9, 2006 /s/ Joseph Grosso
------------------------------ -------------------------------------
Joseph Grosso,
President & CEO
IMA EXPLORATION INC.
709 - 837 West Hastings Street
Vancouver, B.C. V6C 3N6
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that an annual general meeting (the "Meeting") of the
shareholders (the "Shareholders") of IMA Exploration Inc. (the "Company") will
be held in The Garibaldi Room at the Four Seasons Hotel, 791 West Georgia
Street, Vancouver, British Columbia, on Wednesday, June 14, 2006 at the hour of
2:30 P.M. (Vancouver time), for the following purposes:
1. To receive the report of the directors;
2. To receive the audited financial statements of the Company for the
fiscal year ended December 31, 2005 (with comparative statements
relating to the preceding fiscal period) together with the related
Management's Discussion and Analysis and report of the Auditors
thereon;
3. To determine the number of directors at eight (8);
4. To elect directors;
5. To re-appoint auditors and to authorize the Audit Committee of the
Company to fix their remuneration;
6. To pass an ordinary annual resolution to ratify, confirm and approve
the Company's stock option plan; and
7. To transact such other business as may properly come before the
Meeting, or any adjournment thereof.
Accompanying this Notice of Meeting is an Management Information Circular and
form of proxy for the Shareholders. The accompanying Management Information
Circular provides information relating to the matters to be addressed at the
Meeting.
Shareholders are entitled to vote at the Meeting either in person or by proxy.
Those Shareholders who are unable to attend the Meeting in person are requested
to read, complete, sign and mail the enclosed Form of Proxy in accordance with
the instructions set out in the Proxy and the Management Proxy Circular
accompanying this Notice. Please advise the Company of any change in your
mailing address. A proxy will not be valid unless the completed form of proxy is
received by Computershare Trust Company of Canada, Attention: Proxy Department,
9th Floor, 100 University Avenue, Toronto, Ontario M5J 2Y1, or by fax at
1-866-249-7775 not less than 48 hours (excluding Saturdays, Sundays and
holidays) before the time for holding the Meeting or any adjournment thereof.
DATED at Vancouver, British Columbia as of May 9, 2006.
By Order of the Board of Directors
/s/ JOSEPH GROSSO
Joseph Grosso
President and Chief Executive Officer
IMA EXPLORATION INC.
SUITE 709 - 837 WEST HASTINGS STREET
VANCOUVER, BRITISH COLUMBIA
CANADA V6C 3N6
INFORMATION CIRCULAR
THIS INFORMATION CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF
PROXIES BY THE MANAGEMENT OF IMA EXPLORATION INC. (THE "COMPANY") FOR USE AT THE
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF THE COMPANY TO BE HELD ON WEDNESDAY,
JUNE 14, 2006 AT THE TIME AND PLACE AND FOR THE PURPOSES SET FORTH IN THE
ACCOMPANYING NOTICE OF MEETING AND ANY ADJOURNMENT THEREOF (THE "MEETING").
SOLICITATION OF PROXIES
The solicitation of proxies will be primarily by mail, however, proxies may also
be solicited personally or by telephone by the directors, officers and employees
of the Company. The Company has also retained Allen Nelson & Co. Incorporated to
assist with the meeting, including the solicitation of proxies. In addition, the
Company may reimburse brokers or other intermediaries holding Common Shares of
the Company in their names or the names of their nominees for their reasonable
expenses in forwarding meeting materials to beneficial owners of Common Shares
for the purpose of obtaining proxies or voting instructions. All costs of
solicitation will be borne by the Company, which anticipates the cost to be less
than $25,000.
PARTICULARS OF MATTERS TO BE CONSIDERED AT THE MEETING
PRESENTATION OF 2005 ANNUAL FINANCIAL STATEMENTS
The audited financial statements of the Company for the year ended December 31,
2005, 2004 and 2003 and the report of the auditor therein will be placed before
the Meeting. The 2005 Annual Report containing the consolidated audited
financial statements, the report of the auditor and management's discussion and
analysis were mailed to shareholders who had previously requested to receive
them.
ELECTION OF DIRECTORS
The Board of Directors presently consists of eight directors and it is intended
to fix the number of directors at eight and to elect at the Meeting eight
directors for the ensuing year.
The term of office of each of the present directors will end at the conclusion
of the Meeting. Each director elected will hold office until his successor is
elected or appointed, unless his office is earlier vacated in accordance with
the Articles of the Company, or the provisions of the BUSINESS CORPORATIONS ACT
(British Columbia).
Management of the Company proposes to nominate each of the persons named below
for election at the Meeting.
---------------------------------- ---------------------------------- -------- ---------------------
NO. OF SHARES
NAME, POSITION AND PLACE OF DIRECTOR BENEFICIALLY OWNED OR
RESIDENCE(1) PRINCIPAL OCCUPATION(1) SINCE CONTROLLED(1)
---------------------------------- ---------------------------------- -------- ---------------------
GERALD D. CARLSON President and director of Copper 1999 47,500 Common
Chairman and Director Ridge Exploration Inc., a public
West Vancouver, British Columbia British Columbia mineral
exploration company from March
1999 to present.
---------------------------------- ---------------------------------- -------- ---------------------
1
---------------------------------- ---------------------------------- -------- ---------------------
NO. OF SHARES
NAME, POSITION AND PLACE OF DIRECTOR BENEFICIALLY OWNED OR
RESIDENCE(1) PRINCIPAL OCCUPATION(1) SINCE CONTROLLED(1)
---------------------------------- ---------------------------------- -------- ---------------------
JOSEPH GROSSO Director and officer of the 1990 974,667 Common
President, Chief Executive Officer Company since February 1990;
and Director President of Oxbow International
Burnaby, British Columbia Marketing Corp., a private BC
company.
---------------------------------- ---------------------------------- -------- ---------------------
ART LANG Chief Financial Officer of the 2004 Nil
Chief Financial Officer, Company since April 2, 2004;
Vice-President, Secretary Consultant providing financial
and Director management services to various
Vancouver, British Columbia clients from 1999 to March 2004.
---------------------------------- ---------------------------------- -------- ---------------------
ROBERT STUART (TOOKIE) ANGUS(3)(4) Independent business consultant 2003 Nil
Director to the Mining Industry since
Vancouver, British Columbia January 1, 2006; Managing
Director, Mergers & Acquisitions,
Endeavour Financial Ltd.,
November 2003 to December 31,
2005; Partner in law firm, Fasken
Martineau DuMoulin LLP from
February 2001 to October 2003;
---------------------------------- ---------------------------------- -------- ---------------------
CHET IDZISZEK(3) President, CEO and director of 2003 85,900 Common
Director Madison Enterprises Corp. from
Powell River, British Columbia 1993 to present; President, CEO
and director of Adrian Resources
Ltd. from June 1990 to present.
---------------------------------- ---------------------------------- -------- ---------------------
DAVID TERRY Vice President, Exploration for 2004 2,000 Common
Director the Company and for Amera
Maple Ridge, British Columbia Resources Corporation from March
2004 to present; Regional
geologist with the BC Ministry of
Energy and Mines in Cranbrook, BC
from May 2001 to March 2004;
Project Geologist with Boldien
Limited prior to May 2001.
---------------------------------- ---------------------------------- -------- ---------------------
DAVID HORTON(3)(4) Senior Vice-President of Canaccord 2004 10,200 Common
Director Capital Corporation from 1996 to
Vancouver, British Columbia present.
---------------------------------- ---------------------------------- -------- ---------------------
LEONARD HARRIS Retired Mining Consultant and 2005 2,000 Common
Director Chairman, Resource Development
Colorado, U.S.A. Inc. and Chairman Emeritus,
Mining, Energy and Petroleum Task
Force, Chamber of the Americas.
Serves as a director on the board
of several mining companies.
---------------------------------- ---------------------------------- -------- ---------------------
NOTES:
(1) This information has been furnished by the respective nominee.
(2) Includes shares beneficially owned or over which the nominee exercises
control or direction.
(3) Denotes member of the Company's Audit Committee.
(4) Denotes member of the Company's Compensation Committee.
All of the nominees listed above are ordinarily resident in Canada other than
Mr. Harris who resides in the United States.
2
Unless otherwise instructed, the persons named in the enclosed form of proxy
intend to vote the Common Shares represented by such a proxy for the election of
the nominees named above.
The Company is not aware if any of the above nominees will be unable or
unwilling to serve; however, should the Company become aware of such an
occurrence before the election of directors takes place at the Meeting and if
one of the person named in the enclosed form of proxy is appointed as
proxyholder, it is intended that the discretionary authority granted under such
proxy will be used to vote for any substitute nominee or nominees who management
of the Company, in its discretion, may chose to nominate.
APPOINTMENT AND REMUNERATION OF AUDITORS
At the Meeting, management of the Company intend to propose that
PricewaterhouseCoopers, LLP, 7th Floor, 250 Howe Street, Vancouver, British
Columbia V6C 3S7, be re-appointed as auditors of the Company and to authorize
the Audit Committee of the Company to fix their remuneration.
PricewaterhouseCoopers LLP has been the auditors of the Company since 1997. To
be effective, the resolution appointing auditors must be passed by a majority of
the votes cast by the shareholders who vote in respect of that resolution.
Unless otherwise instructed, the persons named in the enclosed form or proxy
intend to vote for the appointment of PricewaterhouseCoopers LLP, Chartered
Accountants, as auditors of the Corporation, to hold office until the conclusion
of the next annual general meeting of the Company, at a remuneration to be fixed
by the Audit Committee of the Company.
The mandate of the Company's Audit Committee provides that the Committee must
review and pre-approve the scope and engagement of PricewaterhouseCoopers LLP
for all non-audit services. For the periods ending December 31, 2005 and
December 31, 2004, the Company has paid PricewaterhouseCoopers the following
fees:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
Audit Fees $ 45,000 $ 39,000
Audit Related Fees(1) $ 10,700 $ 16,253
Tax Fees(2) $ 7,500 $ 7,500
NOTES:
(1) Audit related fees include fees for review of quarterly statements,
managements discussion and analysis or any review provided in connection
with any public financing carried out by the Company.
(2) Includes advice for tax filing, transaction analysis and advice, and tax
aspects of employee compensation matters.
RATIFICATION OF 2003 STOCK OPTION PLAN
At the Annual and Extraordinary General Meeting of Shareholders held on June 26,
2003, shareholders approved the adoption of the Company's Stock Option Plan (the
"Stock Option Plan"). Complete details regarding the Stock Option Plan are set
out in the Information Circular disseminated in connection with that meeting.
Under the Stock Option Plan, a total of ten percent (10%) of the issued and
outstanding shares of the Company are available for issuance upon the exercise
of options granted under the Stock Option Plan.
Under the rules of the TSX Venture Exchange, all listed companies who have
adopted a rolling stock option plan must obtain shareholder approval of such a
plan on an annual basis. Accordingly, at the Meeting, the Shareholders will be
asked to consider and, if thought fit, to ratify the Company's Stock Option Plan
substantially in the form of the resolution set out below.
A copy of the Stock Option Plan will be available for inspection at the Meeting.
Shareholders may obtain a copy of the Stock Option Plan upon written request to
the Secretary of the Company at Suite 709, 837 West Hastings Street, Vancouver,
British Columbia, V6C 3N6.
3
"BE IT RESOLVED, AS AN ORDINARY RESOLUTION, THAT:
1. the Stock Option Plan, in the form approved by the Shareholders of IMA
Exploration Inc. ("IMA") at the Annual and Extraordinary General
Meeting held on June 26, 2003, is hereby ratified, confirmed and
approved;
2. the Company is authorized to grant stock options pursuant and subject
to the terms and conditions of the Stock Option Plan and up to the
number of common shares of the Company equal to ten percent (10%) of
the number of common shares of the Company issued and outstanding on
the grant date of any option; and
3. the Compensation Committee is authorized to make such amendments to
the Stock Option Plan from time to time as the Compensation Committee
may, in its discretion, consider to be appropriate, provided that such
amendments will be subject to the approval of all applicable
regulatory authorities.
The approval of the Stock Option Plan requires an affirmative vote of a majority
of the votes cast at the Meeting either in person or by proxy. Management of the
Company recommends that shareholders vote in favour of the foregoing resolution.
Unless otherwise directed, the persons named in the enclosed form of proxy
intend to vote for the approval of the foregoing resolution at the Meeting.
OTHER BUSINESS
Management is not aware of any other matters that may come before the Meeting
other than those set out in the accompanying Notice of Meeting. If any other
matter properly comes before the Meeting, a proxy in the form attached confers
discretionary authority on the proxyholder so named to vote the shares
represented thereby in accordance with their judgment on such matter.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
In 2005, the Canadian securities regulatory authorities adopted National
Instrument 58-101 "Disclosure of Corporate Governance Practices" requiring
issuers to annually disclose their systems of corporate governance. The Canadian
securities regulatory authorities also released National Policy 58-201
"Corporate Governance Guidelines" containing suggested guidelines on corporate
governance practices. The instrument and policy replaced the requirement of the
Toronto Stock Exchange that listed issuers annually disclose their approach to
corporate governance with reference to certain specified corporate governance
guidelines.
In accordance with the foregoing disclosure requirements, the Board of Directors
of the Company has adopted the following Statement Of Corporate Governance
Practices:
THE BOARD OF DIRECTORS
The Board of Directors has responsibility for the stewardship of the Company,
specifically to oversee the operation of the Company and to supervise
management.
The actions of the Board are governed by the requirements under the BUSINESS
CORPORATIONS ACT (British Columbia) to act honestly, in good faith and in the
best interests of the shareholders of the Company and to exercise care,
diligence and skill in doing so.
The Board will endeavour to ensure that its composition complies with the
Company's Articles of Incorporation, applicable securities rules and regulations
of Canada and the U.S. Securities and Exchange Commission and the policies of
the TSX Venture Exchange and the American Stock Exchange.
4
BOARD MANDATE
Every director takes part in the process of establishing policies for the
Company and its subsidiaries. The Board of Directors has assumed the
responsibility for developing the Company's approach to governance and
responding to current governance guidelines. To that end, the Board has adopted
the following mandate and objectives:
(a) THE STRATEGIC PLANNING PROCESS
The Board participates in the Company's strategic planning by
considering and, if deemed appropriate, adopting plans as proposed and
developed by management, with management having the primary
responsibility for initially developing a strategic plan.
(b) PRINCIPAL RISKS
The Board considers the risks inherent in the mining industry and
receives periodic assessments from management and others as to these
risks and the Company's strategies to manage these risks.
(c) POLICIES
The Board reviews and approves key policy statements, codes of conduct
or practices developed by management to promote ethical business
conduct, regulatory compliance and public disclosure practices, among
others, and monitors or oversees compliance with those policies, codes
or practices.
(d) COMMITTEES
The Board is responsible for appointing and reviewing the mandate and
composition of any Committee of the Board and considering and approving
any changes to the composition, charter or mandate of any Committee of
the Board.
(e) INDEPENDENCE
The Board is responsible for establishing appropriate structures and
procedures so that the Board and its Committees can function
independently of management.
(f) COMPENSATION PRACTICES
The Board will review, with the Compensation Committee, the Company's
compensation practices.
(g) MATERIAL AGREEMENTS AND DOCUMENTS
The Board will approve or ratify significant projects, investments,
dispositions, acquisitions or other material agreements proposed to be
entered into by the Company and review and approve all documents
required by law to be reviewed and approved by the Board, including
annual audited financial statements, management's discussion and
analysis of financial results, the Corporation's Annual Information
Form, information circulars to be disseminated in connection with any
meeting of shareholders and any prospectus, registration statement or
other similar documents.
(h) SUCCESSION PLANNING
The Board reviews the personnel needs of the Company from time to time,
having particular regard to succession issues relating to senior
management. The training and development of personnel is generally left
to management. The Board appoints the President, Chief Executive
Officer and Chairman, as well as the officers of the Company.
5
(i) COMMUNICATIONS POLICY
The Board assesses the effectiveness of the Company's communications
with shareholders and has established a Disclosure and Insider Trading
Policy to ensure that material matters are disseminated in a timely
manner.
(j) INTEGRITY OF INTERNAL CONTROLS
The Board, through the Audit Committee and in conjunction with its
auditors, will assess the adequacy of the Company's internal control
systems and has instituted the controls required by the U.S.
SARBANES-OXLEY ACT OF 2002, as applicable. The internal control review
process will be undertaken at least on an annual basis during
preparation of the year end financial audit. The Audit Committee also
reviews and assesses the financial statements on a quarterly basis and
annually reviews the adequacy of the Company's Disclosure and Insider
Trading Policy.
(k) GENERAL
The Board will generally assume such responsibility and authorities as
the Board sees fits, consistent with its duties and responsibilities to
the Company and its shareholders.
The Board has approved written mandates for its two standing Committees, namely,
the Audit Committee and Compensation Committee. The Board has also adopted a
written Code of Business Conduct and Ethics applicable to all employees,
officers and directors.
The Board has not adopted a formal system which would enable an individual
director to engage an outside advisor at the expense of the Company. If such an
engagement were deemed appropriate, it is anticipated that such a request would
be brought by the particular director to the Board or Audit Committee for
consideration.
BOARD INDEPENDENCE
The Board consists of eight directors, the majority of whom would be considered
"independent" in that the person has no direct or indirect material relationship
with the Company which, in the view of the Board, would be reasonably expected
to interfere with the exercise of the director's independent judgment.
In determining if a person is independent, the Board has compiled, reviewed and
discussed the existence, nature and materiality of any direct or indirect
relationship between the nominee and the Company. Messrs. Gerald Carlson, Chet
Idziszek, Tookie Angus, David Horton and Leonard Harris are independent
directors. The other three directors, Messrs. Joseph Grosso, Art Lang and David
Terry, because of their management positions, are not independent.
The Board considers that, given the entrepreneurial nature of the Company, and
the current stage of the Company's development, the present number and
composition of directors is appropriate. The Board as presently constituted
includes considerable experience in the mining industry as well as financial
experience. The Board believes that when balanced against the attendant increase
in cost to the Company and possible reduction in the efficiency with which
decisions are made, it would not be warranted to significantly increase the size
of the Board or change the Board's composition at this time.
The Chairman of the Board, Mr. Gerald Carlson, is an independent director. His
role and responsibilities are to facilitate meeting of the directors so as to
allow them to discharge their mandate and duties to the Company and its
shareholders.
The Chief Executive Officer and President of the Company, Mr. Joseph Grosso, is
a member of management and a director of the Company. In view of the size of the
Company, management representation on the Board, and the nature of its business,
it is essential that those having an intimate knowledge of the Company's
operations be present during most important Board discussions. Notwithstanding
the foregoing, where the Board considers it appropriate, it meets without
management present at the meeting. The Board has functioned, and is of the view
that it can continue to function, independently of management, as required.
6
INDIVIDUAL DIRECTORS
The following provides further information regarding the background, experience
and other directorship and business interest of the directors.
Since 1990, Mr. Grosso has been a director, President and Chief Executive
Officer of the Company. He is also President, CEO, Chairman and a Director of
Golden Arrow Resources Corporation, and Chairman and Director of Amera Resources
Corporation and Gold Point Energy Corp. He is also President, CEO and Director
of Oxbow International Marketing Corp.
Mr. Art Lang has been a director and Chief Financial Officer of the Company
since 2004. He is also a director, Chief Financial Officer and Vice-President of
Golden Arrow Resources Corporation and Chief Financial Officer of Amera
Resources Corporation since March 2005. Mr. Lang is a Chartered Accountant and
before joining the Company he provided financial management services to various
clients through his consulting company, Arthur G. Lang Inc.
Dr. Gerald Carlson is Chairman of the Board of Directors of the Company and
President and a director of Copper Ridge Exploration Inc. and Nevada Star
Resources Corp. He is also a director of Dentonia Resources, Fairfield Minerals
Ltd. and Orphan Bay Resources.
Mr. Chet Idziszek is President, CEO and a director of Lund Gold Ltd. and
Chairman, President, CEO and a director of Madison Enterprises Corp. He is also
President and a director of Oromin Explorations Ltd., and a director of Surge
Global Energy Inc. and Yukon Gold Corporation Inc.
Mr. Tookie Angus is an independent business adviser to the mining industry. He
is a director of CMQ Resources Inc., Nevsun Resources Ltd., Plutonic Power
Corporation, Blackstone Ventures Inc., Dynasty Gold Corp., Bema Gold
Corporation, Crescent Gold Limited, Polaris Minerals Corporation, Tsodilo
Resources and United Bolero Development Corp. He has also been a partner in the
law firms of Fasken Martineau DuMoulin and Stikeman Elliott.
Mr. David Horton has been Senior Vice-President for Canaccord Capital
Corporation since 1996. He is also a director of Golden Arrow Resources
Corporation.
Mr. David Terry has been a director and VP Exploration for the Company since
2004. He is also VP-Exploration for Amera Resources Corporation and a director
and VP Exploration for Golden Arrow Resources Corporation. Mr. Terry is also a
director and officer of Astral Mining Corporation.
Mr. Leonard Harris, a mining industry consultant, joined the Board in August
2005. He is Chairman of Resource Development Inc. and Chairman Emeritus, Mining,
Energy and Petroleum Task Force, Chamber of the Americas. Mr. Harris also serves
as a director of Corriente ResourceCorp., Solitario Resources, Cardero Resource
Corp., Alamos Minerals Ltd., Canarc Resource Corp., Sulliden Exploration Inc.,
Endeavour Silver Corp., Alamos Gold Inc. and Morgan Minerals Inc.
BOARD ATTENDANCE
The information below sets out Board meetings held and attendance for the year
ended December 31, 2005.
-----------------------------------------------------------------------------
DIRECTOR BOARD MEETINGS ATTENDED
---------------------------- -----------------------
Gerald D. Carlson 5 of 5
Joseph Grosso 5 of 5
Art Lang 5 of 5
Robert Stuart (Tookie) Angus 5 of 5
Chet Idziszek 4 of 5
7
-----------------------------------------------------------------------------
DIRECTOR BOARD MEETINGS ATTENDED
---------------------------- -----------------------
David Terry 5 of 5
David Horton 5 of 5
Leonard Harris 1 of 2(1)
-----------------------------------------------------------------------------
NOTE:
(1) Since his appointment in August 2005.
POSITION DESCRIPTIONS
The Company has not formally developed position descriptions for the directors,
Chairman of the Board, the Chairman of each standing committee of the Board or
the Chief Executive Officer. However, the Board is satisfied that the directors
and senior management are fully aware of their responsibilities and those
matters that are within their authority.
NOMINATION OF DIRECTORS
The Board has not constituted a separate nominating committee to propose new
nominees to the Board or for assessing directors' performance as the directors
consider the Company too small to justify a more formal process. The Board as a
whole from time to time discusses potential candidates for the Board, taking
into account the overall composition, skills and experience of the Board as a
whole.
ORIENTATION AND EDUCATION OF DIRECTORS
The Company does not have a formal process of orientation and education for new
members of the Board. The independent Board members currently have considerable
experience as members of the boards of other public companies. Senior management
regularly provides updates to all directors on material developments in the
Company's business.
BOARD COMMITTEES
The Board has two standing committees of its directors, namely the Audit
Committee and the Compensation Committee. A formal written mandate has been
approved by the Board for each such Committee. The Board may at any time
constitute and appoint such other Committees and delegate such functions or
responsibilities as it sees fit.
COMPENSATION COMMITTEE
The Compensation Committee members are Messrs. Tookie Angus and David Horton,
both of whom are independent directors. The Compensation Committee meets at
least twice a year and otherwise as required. The Compensation Committee has
responsibility for oversight of the Company's overall human resources policies
and procedures as well as review of executive and key employee compensation and
compensation of the Company's independent directors. The Compensation Committee
has engaged the services of an outside compensation consultant in order to carry
out its duties and responsibilities.
THE AUDIT COMMITTEE
The Audit Committee consists of Messrs. Tookie Angus, Chet Idziszek and David
Horton all of whom are independent directors. Mr. Horton is Chairman of the
Committee. The Audit Committee meets at least quarterly to review the interim
financials and to review the year end financials and MD&As. The auditors of the
Company report to the Audit Committee.
Among other things, the Audit Committee reviews the Company's annual
consolidated financial statements and interim financial statements and MD&As
before the Board approves them.
Due to its size, the Company has no formal internal audit process. The Audit
Committee has direct communication channels with the external auditors and is
responsible for recommending to the Board of Directors the appointment of the
8
auditor and sets the auditor's remuneration. The external auditors report
directly to the Company's Audit Committee.
The full charter of the Audit Committee is attached hereto as Schedule "A".
ETHICAL BUSINESS CONDUCT
The Board has adopted a written Code of Business Conduct (the "Code") and Ethics
and a Whistle-Blower Policy and Procedures. A copy of the Code and Policy can be
found on the Company website at http://www.imaexploration.com.
The Board has appointed a Compliance Officer who is responsible for monitoring
compliance with the Code, investigating and resolving all reported complaints
and allegations concerning violations of the Code. The Compliance Officer has
direct access to the Audit Committee and the Board and the Compliance Officer is
required to report to the Board at least annually on compliance activity.
Where any director has an interest, direct or indirect in a material contract or
material transaction relating to the Company, the BUSINESS CORPORATIONS ACT
(British Columbia) requires that the director disclose his or her interest to
the Board in advance and thereafter abstain from voting as a director on that
matter. The Code adopted by the Board goes further by imposing more stringent
disclosure and approval requirements than those imposed under the BUSINESS
CORPORATIONS ACT (British Columbia).
Where a director has a material interest in a transaction or agreement
concerning the Company, the Board takes such steps as may be prudent to isolate
and eliminate or reduce the potential for such a conflict of interest to
interfere with the Board's exercise of independent judgment. This may include
requiring the director to excuse himself or herself from deliberations of the
Board or referring that matter for consideration by a committee of independent
directors of the Board.
DIRECTOR ASSESSMENTS
The Chairman of the Board has the responsibility for ensuring the effective
operation of the Board and its committees and for ensuring the Board's directors
are performing effectively.
STATEMENT OF EXECUTIVE COMPENSATION
The Company is required, under applicable securities legislation in Canada, to
disclose to its shareholders details of compensation paid to each of its Chief
Executive Officer ("CEO") and the Chief Financial Officer ("CFO") of the
Company, regardless of the amount of compensation of those individuals, and each
of the Company's four most highly compensated executive officers, other than the
CEO and CFO, who were serving as executive officers at the end of the most
recent financial year and whose total salary and bonus exceeds $150,000.
During the Company's last completed financial year ended December 31, 2005, Mr.
Joseph Grosso, President and CEO and Mr. Art Lang, CFO were the Company's only
Named Executive Officers.
SUMMARY COMPENSATION TABLE
The following table sets forth all annual and long term compensation for
services in all capacities to the Company for the financial years ended December
31, 2005, 2004, and 2003 excluding the value of perquisites or other benefits
worth less than $50,000) in respect of the Named Executive Officers:
9
---------------------------------------
LONG TERM COMPENSATION
------------------------------ ---------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------ ---------------------------- ------- ---------
YEAR OTHER RESTRICTED
------------------ ENDED ANNUAL SECURITIES SHARES OR ALL OTHER
NAME AND DECEMBER COMPEN- UNDER OPTIONS/ RESTRICTED LTIP COMPEN-
PRINCIPAL POSITION 31 SALARY BONUS SATION SARS GRANTED SHARE UNITS PAYOUTS SATION
($) ($) ($) (#)(1) (#) ($) ($)
------------------ ---- ------------------------------ ---------------------------- ------- ---------
Joseph Grosso 2005 102,000 - - 150,000 - - -
President and CEO(2) 2004 102,000 - - 150,000 - - -
2003 102,000 - - 200,000 - - -
------------------ ---- ------------------------------ ---------------------------- ------- ---------
Arthur Lang CFO 2005 68,927(3) - - 100,000 - - -
2004 58,671 - - 50,000 - - -
2003 Nil - - - - - -
------------------ ---- ------------------------------ ---------------------------- ------- ---------
NOTES:
(1) Represents common share issuable under options granted during a particular
year; see "Aggregate Option" table for the aggregate number of options
outstanding at year end. The Company does not have any stock appreciation
rights ("SARS").
(2) See description under "Management Contracts" regarding July 1, 1999
agreement with Oxbow International Marketing Corp.
(3) During the year ended December 31, 2005, Mr. Lang's total compensation from
Grosso Group Management Ltd. (The "Grosso Rroup") was $94,667, of which
$68,927 was allocated to the Company as part of the total fees paid to the
Grosso Group for the year.
LONG TERM INCENTIVE PLAN AWARDS
The Company does not have any long term incentive plans ("LTIP"), namely, any
plan providing compensation intended to motivate performance over a period
longer than one financial year not including option or SAR plans or plans for
compensation through restricted shares or units.
OPTION/STOCK APPRECIATION RIGHT ("SAR") GRANTS AND REPRICINGS DURING THE MOST
RECENTLY COMPLETED FINANCIAL YEAR
The following table sets forth stock options granted by the Company during the
financial year ended December 31, 2005 to the Named Executive Officers of the
Company:
------------------------------------------------------------------------------------------------------------------
MARKET VALUE OF
SECURITIES % OF TOTAL SECURITIES
UNDER OPTIONS OPTIONS GRANTED EXERCISE OR UNDERLYING OPTIONS
GRANTED IN FINANCIAL BASE PRICE ON DATE OF GRANT
NAME (#) YEAR(1) ($/SECURITY)(2) ($/SECURITY) EXPIRATION DATE
------------------------------------------------------------------------------------------------------------------
Joseph Grosso 150,000 11.02% $4.16 $4.16 Mar. 16, 2010
------------------------------------------------------------------------------------------------------------------
Arthur Lang 75,000 5.51% $4.16 $4.16 Mar. 16, 2010
25,000 1.84% $2.92 $2.92 Nov. 16, 2010
------------------------------------------------------------------------------------------------------------------
NOTES:
(1) Percentage of all options granted during the financial year.
(2) The exercise price of stock options was set according to the rules of the
TSX Venture Exchange.
10
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
AND FINANCIAL YEAR-END OPTION/SAR VALUES
The following table sets forth details of all stock options exercised during the
financial year ended December 31, 2005 by the Named Executive Officer(s), and
the financial year end value of unexercised options on an aggregated basis:
-----------------------------------------------------------------------------------------------------------------
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
AT FINANCIAL YEAR IN THE MONEY OPTIONS
SECURITIES END(3) AT FINANCIAL YEAR END
ACQUIRED ON AGGREGATE VALUE (#) ($)(3)
EXERCISE(1) REALIZED(2) EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
-----------------------------------------------------------------------------------------------------------------
Joseph Grosso Nil Nil 547,500/nil $520,550/NA
-----------------------------------------------------------------------------------------------------------------
Arthur Lang Nil Nil 150,000/nil $33,000/NA
-----------------------------------------------------------------------------------------------------------------
NOTES:
(1) Represents the number of common shares of the Company acquired on the
exercise of stock options.
(2) Calculated using the closing price of the common shares of the Company on
the TSX Venture Exchange.
(3) Value of unexercised in-the-money options were calculated using the closing
price of common shares of the Company on the TSX Venture Exchange on
December 31, 2005 of $3.48 per share, less the exercise price of
in-the-money stock options.
TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL
Other than the agreement between the Company and Oxbow International Marketing
Corp. as described in "Management Contracts", the Company has no plans or
arrangements with respect to remuneration received or that may be received by
the Named Executive Officers during the Company's most recently completed
financial year or current financial year in view of compensating such officers
in the event of termination of employment (as a result of resignation,
retirement, change of control, etc.) or a change in responsibilities following a
change of control, where the value of such compensation exceeds $100,000 per
executive officer.
DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
The Company does not have any defined benefit or actuarial plans under which
benefits are determined primarily by final compensation (or average final
compensation) and years of service of the Named Executive Officer.
MANAGEMENT CONTRACTS
By agreement, made effective as of July 1, 1999, Oxbow International Marketing
Corp., a private company owned by Joseph Grosso, was paid a consulting fee of
$8,500 per month for making available the services of Joseph Grosso as President
and Chief Executive Officer of the Company. Under the terms of this contract, a
payment of $461,500 is due in the event that Oxbow's services are terminated
without cause, or upon a change of control a payment of three years of
consulting fees may become due. On April 12, 2006 the Board accepted the
recommendation from the Compensation Committee to increase the monthly
consulting fee effective May 1, 2006 to $20,833 ($250,000 per annum) and to pay
a bonus of $150,000.
By agreement dated April 1, 2004, KGE Management Ltd., ("KGE"), a private
company owned by Gerald Carlson, Chairman of the Company, was paid $2,000 per
month, plus $600 per day if services are rendered for more than three days per
month. The agreement expired March 31, 2005 and was renewed for six months with
the same terms. During the fiscal year ended December 31, 2005, the Company paid
$24,000 to KGE. Effective January 1, 2006 the Company agreed to pay KGE a fee of
$600 per day if services were required and the former agreement was not renewed.
On December 16, 2003 and on November 16, 2004, the Company entered into
agreements with Endeavour Financial Ltd. ("Endeavour"). Mr. Angus, a director of
the Company, was a shareholder of Endeavour when the agreements were entered
into. A monthly fee of US$5,000 was paid under this agreement for a minimum
period of one year. On July 4, 2005, the agreement was amended to increase the
monthly fee to US$10,000 per month effective June 1, 2005. During the fiscal
year ended December 31, 2005, Endeavour was paid $115,088. The agreement
11
includes a provision for a nominee from Endeavour to be nominated to the board
of the Company and for additional fees to be paid for certain specified
transactions in addition to the monthly fee. Effective December 31, 2005, Mr.
Angus retired from Endeavour and the monthly fee was reduced to US$5,000 per
month. The agreement was terminated by mutual consent effective February 28,
2006.
On February 14, 2006 and effective January 1, 2006, the Company has entered into
an agreement with RSA Holdings Ltd., pursuant to which R.S. (Tookie) Angus, a
director of the Company, provides advisory services including participation on
various committees of the Company. A monthly fee of US$5,000 for services is
payable under this agreement for a minimum period of six months.
REPORT ON EXECUTIVE COMPENSATION
COMPOSITION OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board is composed of Messrs. Tookie Angus and
David Horton, each of whom is an independent director.
None of the Committee members were or are employees or officers of the Company.
None of the executive officers of the Company serves or has served as a member
of the compensation or other equivalent committee or board of another issuer in
respect of which any of the members of the Compensation Committee was an
executive officer.
The following is the report of the Compensation Committee on the Company's
executive compensation practices.
COMPENSATION PHILOSOPHY
The Company's executive compensation program is comprised of two components:
base salary and annual incentives. The objectives of the Company's executive
compensation strategy include the following:
1. attracting, rewarding, motivating and retaining key executives;
2. aligning the financial interest of executives and executive
compensation with the Company's short term and longer-term strategic,
operational and financial objectives and the financial interests of the
Company's shareholders; and
3. providing competitive total compensation opportunities on a fair,
reasonable and cost-effective basis, while enhancing the Company's
ability to fulfil its goals and objectives.
In keeping with these objectives, the Compensation Committee is committed to
reviewing and monitoring the competitiveness, adequacy, suitability and form of
total compensation of the executive officers of the Company on an annual basis.
While the Company's strategy is to competitively recognize and reward management
contributions, the importance of business and shareholder interest is also taken
into consideration when the Compensation Committee determines executive
compensation levels. The Company's policies are designed to deliver competitive
base salaries and incentive payments where corporate and individual performance
meet specific predetermined objectives.
SALARY
Base salaries are set according to duties and responsibilities, the degree of
special knowledge and skill required to perform the role and a comparison to
executives in similar positions of responsibility and scope in other comparable
organizations. For all executive officers other than the Chief Executive
Officer, the Compensation Committee, with input from the Chief Executive
Officer, makes recommendations to the Board of Directors who make the ultimate
determination of each officer's salary. Salaries of other senior management of
the Corporation are reviewed annually by the Chief Executive Officer and the
Compensation Committee and adjusted appropriately by them based on position,
responsibilities and market data. The Committee separately reviews the
compensation for the Chief Executive Officer and makes recommendations to the
Board.
12
ANNUAL INCENTIVES
The Company also provides executive officers and other senior management of the
Company with the opportunity to earn annual incentive awards, by way of cash
bonuses and stock option grants, based on the achievement of pre-established
annual corporate, business and individual performance milestones and other
factors. These measures include quantitative factors as well as qualitative
factors. Individual performance assessments are determined with respect to
specific milestones and factors and by subjective evaluations of performance.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officers' compensation is determined by the Compensation
Committee and approved by the Board. In determining his compensation, the
Compensation Committee carefully assesses the performance of the Chief Executive
Officer, considering both financial and non-financial components. His
compensation is based on a number of corporate and personal performance goals
and with a view to compensation based on individuals of a similar position with
comparable organizations. In determining Mr. Grosso's compensation, the
Compensation Committee has consulted an outside consultant in order to obtain
market information.
Mr. Grosso's compensation is comprised of base salary and an annual incentive.
His bonus and stock option grants are determined by the financial and operations
performance of the Company as compared to the corporate objectives set by the
Board at the beginning of each year, as well as by Mr. Grosso's achievement of
predetermined personal milestones.
SUBMITTED BY THE COMPENSATION COMMITTEE
R.S. ANGUS
D. HORTON
DIRECTOR COMPENSATION
The Company does not provide cash compensation to its directors in their
capacities as such, although directors of the Company are reimbursed for their
expenses incurred in connection with their services as directors.
Directors are entitled to participate in the Company's Stock Option Plan. The
following table sets forth stock options granted by the Company during the
financial year ended December 31, 2005 to the directors other than the Named
Executive Officers of the Company:
---------------------------------------------------------------------------------------------------
MARKET VALUE OF
SECURITIES SECURITIES
UNDER OPTIONS EXERCISE OR UNDERLYING OPTIONS
GRANTED BASE PRICE ON DATE OF GRANT
NAME (#) ($/SECURITY)(1) ($/SECURITY) EXPIRATION DATE
---------------------------------------------------------------------------------------------------
Gerald Carlson 20,000 $4.16 $4.16 Mar. 16, 2010
---------------------------------------------------------------------------------------------------
R. S. (Tookie) Angus 30,000 $4.16 $4.16 Mar. 16, 2010
---------------------------------------------------------------------------------------------------
David Horton 30,000 $4.16 $4.16 Mar. 16, 2010
---------------------------------------------------------------------------------------------------
Leonard Harris 50,000 $2.92 $2.92 Nov. 16, 2010
---------------------------------------------------------------------------------------------------
Chet Idziszek 20,000 $4.16 $4.16 Mar. 16, 2010
---------------------------------------------------------------------------------------------------
David Terry 80,000 $4.16 $4.16 Mar. 16, 2010
70,000 $2.92 $2.92 Nov. 16, 2010
---------------------------------------------------------------------------------------------------
NOTES:
(1) The exercise price of stock options was set according to the rules of the
TSX Venture Exchange.
13
The following table sets forth details of all exercises of stock options during
the financial year ended December 31, 2005 by the directors other than the Named
Executive Officers, and the financial year end value of unexercised options:
-------------------------------------------------------------------------------------------------------------------
VALUE OF UNEXERCISED IN
UNEXERCISED OPTIONS AT THE MONEY OPTIONS AT
FINANCIAL YEAR END(2) FINANCIAL YEAR END
SECURITIES (#) ($)(2)
ACQUIRED ON AGGREGATE VALUE
EXERCISE(1) REALIZED(2) EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
-------------------------------------------------------------------------------------------------------------------
Directors as a group Nil Nil 1,200,000/nil $1,670,700/NA
who are not Named
Executive Officers
-------------------------------------------------------------------------------------------------------------------
NOTES:
(1) Number of common shares of the company acquired on the exercise of stock
options.
(2) Value of unexercised in-the-money options calculated using the closing
price of common shares of the company on the tsx venture on December 31,
2005 at $3.48 Per share, less the exercise price of in-the-money stock
options.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The only equity compensation plan which the Company has in place is the 2003
Stock Option Plan which was previously approved by shareholders on June 26,
2003. The Plan is meant to provide the Company with a share-related mechanism to
attract, retain and motivate qualified Executives, Employees and Consultants, to
provide incentive to such individuals to contribute toward the long term goals
of the Company, and to encourage such individuals to acquire Shares of the
Company as long term investments. The Plan is administered by the Compensation
Committee. The Plan provides that the number of Common Shares issuable under the
Plan may not exceed ten percent (10%) of the total number of issued and
outstanding Common Shares.
The following table sets forth details of options granted under the Plan during
the financial year ended December 31, 2005.
--------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE EXERCISE FUTURE ISSUANCE UNDER
ISSUED UPON EXERCISE OF PRICE OF OUTSTANDING EQUITY COMPENSATION PLANS
OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND (EXCLUDING SECURITIES
WARRANTS AND RIGHTS RIGHTS REFLECTED IN COLUMN (A))
--------------------------------------------------------------------------------------------------------------------
PLAN CATEGORY (A) (B) (C)
--------------------------------------------------------------------------------------------------------------------
Equity compensation plans
approved by securityholders 4,881,000 $2.54 306
Equity compensation plans not
approved by security holders N/A N/A N/A
--------------------------------------------------------------------------------------------------------------------
Total 4,881,000 $2.54 306
--------------------------------------------------------------------------------------------------------------------
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS OF THE COMPANY
Except as otherwise disclosed herein, no director or senior officer of the
Company, proposed management nominee for election as a director of the Company
or each associate or affiliate of any such director, senior officer or proposed
nominee is or has been indebted to the Company or any of its subsidiaries or had
indebtedness to another entity which is, or has been the subject of a guarantee,
support agreement, letter of credit or other similar arrangement or
understanding provided by the Company or any of its subsidiaries at any time
during the Company's last completed financial year, other than routine
indebtedness.
14
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Except as otherwise disclosed herein, to the knowledge of management of the
Company, no informed person (including a director, officer or holder of 10% or
more of the Common Shares of the Company) or nominee for election as a director
of the Company or any associate or affiliate of any such informed person or
proposed director had any interest in any transaction which has materially
affected or would materially affect the Company or any of its subsidiaries
during the year ended December 31, 2005, or has any interest in any material
transaction in the current year.
INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON
Other than as set forth herein, no director or senior officer of the Company nor
any proposed nominee for election as a director of the Company, nor any
associate or affiliate of any of the foregoing, has any material interest,
directly or indirectly, by way of beneficial ownership of securities or
otherwise, in any matter to be acted upon at the Meeting other than the election
of directors or the ratification of the Company's Stock Option Plan.
SHARE PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total shareholder return on the Common Shares of the Company for the last five
years as of December 31 of each year with the cumulative total return of the TSX
Venture Composite Index. The Common Share trading data is as reported on the TSX
Venture Exchange.
[GRAPHIC OMITTED][GRAPHIC OMITTED][GRAPHIC OMITTED]
Ommitted graphic is bar chart showing the Company's stock price as compared to
the S&P / TSX Composite for the Fiscal years 2000 through 2005. To view visit
the Company's website www.imaexploration.com and click on Information Circualr
for 2006 AGM.
15
VOTING SHARES AND PRINCIPAL HOLDERS OF VOTING SHARES
Issued and Outstanding: 48,948,065 Common shares without par value
Authorized Capital: Unlimited Common shares without par value
The Board of directors of the Company has fixed May 5, 2006 as the record date
(the "Record Date") for determination of persons entitled to receive notice of
and vote at the Meeting. Only shareholders of record at the close of business on
the Record Date who either attend the Meeting personally or complete, sign and
return a form of proxy in the manner and subject to the provisions described
herein will be entitled to vote or to have their shares voted at the Meeting.
Each Shareholder is entitled to one vote for each common share registered in
their name on the list of shareholders.
To the knowledge of the directors and senior officers of the Company, no person
beneficially owns, directly or indirectly, or exercises control or direction
over, shares carrying more than 10% of the voting rights attached to all of the
outstanding shares of the Company.
GENERAL PROXY INFORMATION
APPOINTMENT OF PROXYHOLDERS
The individuals named in the accompanying form of proxy are directors and
officers of the Company. A SHAREHOLDER MAY APPOINT SOME OTHER PERSON (WHO NEED
NOT BE A SHAREHOLDER) TO REPRESENT THEM AT THE MEETING OTHER THAN THE PERSONS
NAMED IN THE ENCLOSED FORM OF PROXY. You may do so by inserting the person's
name in the blank space provided in the form of Proxy or by completing another
suitable form of proxy.
DEPOSIT OF PROXIES
To be valid, completed proxies must be deposited with Computershare Investor
Services, 9th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1
(facsimile: 416-249-7775) no later than 48 hours (excluding Saturdays, Sundays
or holidays) before the time for holding the Meeting. The Chairman of the
Meeting may, but is not obliged to, accept proxies deposited after that time.
VOTING BY PROXYHOLDERS
The person named in the proxy in the form enclosed will vote or withhold from
voting the Common Shares represented by the proxy in accordance with your
instructions.
IF NO CHOICE IS SPECIFIED IN A PROXY IN THE FORM ENCLOSED AND ONE OF THE PERSONS
NAMED THEREIN IS APPOINTED AS PROXYHOLDER, THE COMMON SHARES REPRESENTED BY THAT
PROXY WILL BE VOTED IN FAVOUR OF EACH OF THE MATTERS IDENTIFIED THEREIN.
DISCRETIONARY AUTHORITY
Management of the Company is currently not aware of any amendment to or
variation in any of the matters identified in the accompanying Notice of Meeting
nor of any other matter that may be brought before the Meeting. However, a proxy
in the form enclosed confers discretionary authority on the person named as
proxyholder with respect to:
(a) each matter or group of matters identified in the Proxy for which no
choice is specified,
(b) any amendment to or variation of any matter identified therein, and
(c) any other matter that properly comes before the Meeting.
16
VALIDITY OF PROXIES
A form of proxy will not be valid unless it is dated and signed by the
shareholder or by the shareholder's attorney duly authorized in writing. In the
case of a shareholder that is a corporation, a proxy will not be valid unless it
is executed under its seal or by a duly authorized officer or agent of, or
attorney for, such corporate shareholder. If a proxy is executed by an attorney
or agent for an individual shareholder, or by an officer, attorney, agent or
authorized representative of a corporate shareholder, the instrument empowering
the officer, attorney, agent or representative, as the case may be, or a
notarial copy thereof, should be deposited along with the proxy.
A vote cast in accordance with the terms of a proxy will be valid
notwithstanding the previous death, incapacity or bankruptcy of the shareholder
or intermediary on whose behalf the proxy was given or the revocation of the
appointment, unless written notice of such death, incapacity, bankruptcy or
revocation is received by the Chairman of the Meeting at any time before the
vote is cast.
VOTING PROCEDURES FOR REGISTERED AND NON-REGISTERED SHAREHOLDERS
A shareholder may vote at the Meeting by attending in person or appointing a
proxyholder to attend and vote on their behalf. Only registered shareholders or
their duly appointed proxy holders are permitted to attend and vote at the
Meeting.
The procedure a shareholder must follow in order to vote in person or by proxy
will depend on whether they are a registered or a non-registered shareholder. A
registered shareholder is a person whose shares are recorded in their name on
the books of the Company. Registered shareholders do not hold their Common
Shares through and in the name of a brokerage firm, securities dealer, bank,
trust company or their nominee or depository. Registered shareholders may attend
and vote in person at the Meeting by registering their attendance with the
Scrutineer of the Meeting on the day of the Meeting. A registered shareholder
who intends to vote in person need not submit a proxy, although it is
recommended that they do so in the event they are unable to attend on the day of
the Meeting.
Most shareholders of the Company are "non-registered" or "beneficial"
shareholders because the shares they own are not registered in their names but
are instead registered and held by and in the name of the brokerage firm,
securities dealer, bank or trust company of their nominees or depositories
("Intermediaries") who holds those shares for their clients. Those
Intermediaries cannot vote the shares registered in their name except with the
specific voting instructions from their clients, the beneficial holders. In
order to facilitate this, the Company is required to arrange the distribution of
copies of the Notice of Meeting and Information Circular (collectively, the
"Meeting Materials") to non-registered holders. The Company may distribute the
Meeting Materials directly to you if you are a "non-objecting beneficial owner"
or NOBO and have allowed your Intermediary to give your name and the number of
shares held by you to the Company in accordance with applicable securities
rules. If not, the Company will distribute the Meeting Materials to your
Intermediary who, in turn, is required to forward the Meeting Materials to their
clients on whose behalf they hold shares if you have advised that you do not
wish to disclose your name to the Company (namely, you are an "objecting
beneficial owner" or OBO). In some cases, non-registered shareholders have
directed their Intermediary not to send them any such materials.
All non-registered beneficial shareholders who receive Meeting Materials will
also receive either a form of proxy or a "voting instruction form" (a VIF).
If you are a NOBO, you should expect to receive and you should properly complete
and sign the proxy or VIF that will be sent to you and return it to
Computershare Investor Services Ltd., the Corporation's transfer agent, as
directed. Computershare will tabulate the results of VIFs delivered to them on
behalf of NOBOs and provide that tabulation to the Company. By sending the
Meeting Materials and VIF directly to NOBOs, the Company, and not your
Intermediary, has assumed responsibility for the delivery of those materials to
you and executing your proper voting instructions.
If you are an OBO, you should expect to receive and you should properly complete
and sign the proxy or VIF that will be sent to you and return it to the
Intermediary or its service agent, as directed. Your Intermediary will, in turn,
submit a form of proxy to the Company on your behalf, based on the voting
instructions you provide. Every Intermediary has its own procedures for
17
completing and returning these forms in order for the votes of non-registered
shareholders to be submitted and recorded at the Meeting. These procedures may
allow for voting in different manner, including over the internet or by
telephone. Those instructions should be carefully followed. If you have any
questions, you should contact your broker, bank or other Intermediary or any
service provider identified by them.
The instructions provided along with the VIF or proxy will also specify how
non-registered shareholder may complete those documents if the shareholder
wishes to attend the Meeting or appoint someone else to attend on their behalf
and vote in person at the Meeting and how to revoke or change your vote.
REVOCATION OF PROXIES
A shareholder who has given a proxy may revoke it by an instrument in writing
executed by the shareholder or by his attorney authorized in writing or, where
the shareholder is a corporation, by a duly authorized officer or attorney of
the corporation, and delivering it to the registered and records office of the
Company at 709 - 837 West Hastings Street, Vancouver, British Columbia, V6C 3N6,
at any time up to and including the last business day preceding the day of the
Meeting or to the Chairman of the Meeting on the day of the Meeting or in any
other manner provided by law. A revocation of a proxy will not affect any matter
on which a vote has already been taken prior to the receipt of the revocation.
ADDITIONAL INFORMATION
The Company's comparative financial statements for the financial year ended
December 31, 2005, the annual MD & A and the Company's Annual Information Form
is available on SEDAR at www.sedar.com or on the Company's website at
www.imaexploration.com or may be obtained by written request to Mr. Arthur Lang,
the Company's CFO and Corporate Secretary.
OTHER MATTERS
The Directors are not aware of any other matters which will be brought before
the Meeting as of the date of mailing of this Information Circular.
APPROVAL OF CIRCULAR
The contents of this Information Circular and its distribution to shareholders
have been approved by the board of directors of the Company.
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 misleading in the light of the circumstances in which it was
made.
DATED at Vancouver, British Columbia, this 9th day of May, 2006.
/s/ JOSEPH GROSSO /s/ ARTHUR LANG
----------------------- -----------------------
Chief Executive Officer Chief Financial Officer
18
SCHEDULE "A"
AUDIT COMMITTEE CHARTER
(AS OF APRIL 21, 2005)
A. Mandate
The Board of Directors of the Corporation has an overall responsibility to
oversee the affairs of the Company for the benefit of the shareholders. The
Audit Committee is appointed by the Board to assist the Board in fulfilling its
oversight responsibilities. The Audit Committee has been established (within the
meaning of section 3(a)(58)(A) of the Exchange Act) with the following duties
and responsibilities:
- Ensure the effectiveness of the overall process of identifying and
addressing principal business risk and the adequacy of the related
disclosure
- Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting and legal
compliance
- Monitor the independence and performance of the Company's independent
auditors
- Provide an avenue of communications among the independent auditors,
management and the Board of Directors
- Encourage adherence to, and continuous improvement of, the Company's
policies, procedures and practices at all levels
The Audit Committee has the authority to conduct any investigation appropriate
to fulfilling its responsibilities, and it has direct access to the independent
auditors as well as anyone in the organization. The Audit Committee has the
ability to retain, at the Company's expense, special legal, accounting or other
consultants or experts it deems necessary in the performance of its duties.
B. Composition and Meetings
Audit Committee members shall meet the requirements of the TSX and US Securities
and Exchange Commission. The Audit Committee will have, at least, one member who
meets the definition of "audit committee financial expert" (as defined under
Section 407 of the Sarbanes-Oxley Act of 2002) and that he is independent (in
accordance with the criteria set forth in the American Stock Exchange Company
Guide). The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent non-executive
directors, free from any relationship that would interfere with the exercise of
his or her independent judgment. All members of the Committee shall have a basic
understanding of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the Committee shall
have accounting or related financial expertise.
Audit Committee members shall be appointed by the Board. If the Audit Committee
Chair is not designated or present, the members of the Committee may designate a
Chair by majority vote of the Committee membership.
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. The Audit Committee Chair shall prepare and/or approve an
agenda in advance of each meeting. The Committee should meet, at least annually,
with management, the independent auditors and as a committee to discuss any
matters that the Committee or each of these groups believe should be discussed.
In addition, on a quarterly basis, the Committee or its Chair, should
communicate with management the Company's financial statements and any
significant findings based upon the Auditors limited review procedures, if any.
C. Responsibilities and Duties
ARTICLE I. REVIEW PROCEDURES
1. Review the Company's annual audited financial statements and management
discussion and analysis prior to filing or distribution. Review should
19
include discussion with management and independent auditors of
significant issues regarding accounting principles, practices and
judgments.
2. In consultation with management and the independent auditors, consider
the integrity of the Company's financial reporting processes and
controls. Discuss significant financial risk exposures and the steps
management has taken to monitor, control and report such exposures.
Review significant findings prepared by the independent auditors
together with management's responses.
3. In consultation with management, review the Company's quarterly
financial results and management discussion and analysis prior to the
release of earnings. Discuss any significant changes to the Company's
accounting principles and any items required to be communicated by the
independent auditors.
ARTICLE II. INDEPENDENT AUDITORS
4. The independent auditors are directly accountable to the Audit
Committee. The Audit Committee shall review the independence and
performance of the auditors and annually recommend to the Board of
Directors the appointment of the independent auditors or approve any
discharge of auditors when circumstances warrant.
5. Approve the fees and other significant compensation to be paid to the
independent auditors, and pre-approve any non-audit services that the
auditor may provide.
6. On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company or any member of management, that could impair the auditor's
independence.
7. Review the independent auditors audit plan and engagement letter.
8. Discuss the year end results with the Committee before releasing.
9. The Committee shall consider the independent auditors' judgments about
the quality and appropriateness of the Company's accounting principles
as applied in its financial reporting.
ARTICLE III. RESPONSIBILITIES
10. At least on an annual basis, review with the Company's counsel, any
legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations, and inquiries received from regulators
or governmental agencies.
11. The Chairman, with the assistance of the entire Committee, shall
annually produce a report to shareholders to be included in the
Company's information circulars. The Chairman of the Audit Committee
will review all disclosure documents to be issued by the Company
relating to financial matters, including news releases, any financial
documents submitted to the TSX in Canada or the Securities and Exchange
Commission in the United States and information circulars.
12. Oversee the establishment and implementation of the Company's Code of
Business Conduct and Ethics and Whistle-Blower Policy and Procedures.
20
PROXY
THIS PROXY IS SOLICITED BY MANAGEMENT OF IMA EXPLORATION INC. (THE "COMPANY")
FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS (THE "MEETING") TO BE HELD ON
WEDNESDAY, JUNE 14, 2006 AND ANY ADJOURNMENT THEREOF.
The undersigned shareholder of the Company hereby appoints JOSEPH GROSSO, the
President, Chief Executive Officer and a director of the Company, or failing
him, ARTHUR LANG, the CFO, Secretary and a director of the Company, or in the
place of both of the foregoing, ______________________________ (PLEASE PRINT
NAME), as proxyholder for and on behalf of the undersigned, with power of
substitution, to attend, act and vote for and in the name of the undersigned at
the Meeting and at every adjournment thereof, with respect to all [or
_______________ ] of the common shares of the Company registered in the name of
the undersigned. Unless otherwise expressly stated herein by the undersigned,
receipt of this proxy, duly executed and dated, revokes any former proxy given
to attend and vote at the Meeting and at any adjournment thereof. UNLESS THE
UNDERSIGNED DIRECTS OTHERWISE, THE NOMINEE IS HEREBY INSTRUCTED TO VOTE THE
COMMON SHARES OF THE COMPANY HELD BY THE UNDERSIGNED AS FOLLOWS:
For Against
1. To determine the number of directors at eight. |_| |_|
2. To elect as a director: For Withhold
(a) Gerald Carlson....................................... |_| |_|
(b) Joseph Grosso........................................ |_| |_|
(c) Arthur Lang.......................................... |_| |_|
(d) Robert Stuart (Tookie) Angus......................... |_| |_|
(g) Chet Idziszek........................................ |_| |_|
(h) David Terry......................................... |_| |_|
(i) Leonard Harris....................................... |_| |_|
(j) David Horton......................................... |_| |_|
3. To appoint PricewaterhouseCoopers LLP as auditors fo r |_| |_|
the Company and to authorize the Audit Committee to fix
their remuneration.
For Against
4. To pass an ordinary resolution to ratify, confirm and |_| |_|
approve the Company's stock option plan.
5. To transact such other business as may properly come |_| |_|
before the Meeting.
THIS PROXY MUST BE SIGNED AND DATED. SEE IMPORTANT INSTRUCTIONS ON REVERSE.
================================================================================
THE UNDERSIGNED REGISTERED SHAREHOLDER HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN
TO ATTEND AND VOTE AT THE MEETING.
SIGNATURE: ________________________________ NAME: ________________ DATE: ______
(PROXY MUST BE SIGNED AND DATED) (PLEASE PRINT)
If someone other than the named registered shareholder signs this Proxy on
behalf of such shareholder, documentation acceptable to the Chairman of the
Meeting must be deposited with this Proxy granting signing authority to the
person signing the proxy. TO BE USED AT THE MEETING, THIS PROXY MUST BE RECEIVED
AT THE OFFICES OF COMPUTERSHARE TRUST COMPANY OF CANADA BY MAIL OR BY FAX NO
LATER THAN 48 HOURS BEFORE THE MEETING. THE MAILING ADDRESS OF COMPUTERSHARE
TRUST COMPANY IS 9TH FLOOR, 100 UNIVERSITY AVENUE, TORONTO, ONTARIO, CANADA M5J
2Y1 AND ITS FAX NUMBER IS 1-866-249-7775.
================================================================================
1. IF YOU ARE A REGISTERED SHAREHOLDER AND WISH TO ATTEND THE MEETING TO
VOTE ON THE RESOLUTIONS IN PERSON, please register your attendance with
the Company's scrutineers at the Meeting.
2. IF THE REGISTERED SHAREHOLDER CANNOT ATTEND THE MEETING BUT WISHES TO
vote on the resolutions, the shareholder can APPOINT ANOTHER PERSON,
who need not be a shareholder of the Company, to vote according to the
shareholder's instructions. To appoint someone other than the nominees
named by management, please insert your appointed proxyholder's name in
the space provided, sign and date and return the Proxy. Where no choice
on a resolution is specified by the shareholder, this Proxy confers
discretionary authority upon the shareholder's appointed proxyholder to
vote as the proxyholder may see fit.
3. IF A REGISTERED SHAREHOLDER CANNOT ATTEND THE MEETING BUT WISHES TO
vote on the resolutions and to APPOINT ONE OF THE INDIVIDUALS NAMED BY
MANAGEMENT as proxyholder, please leave the wording appointing such
individual as shown, sign and date and return the Proxy. Where no
choice is specified by the shareholder on a resolution shown on the
Proxy, an individual appointed by management acting as proxyholder will
vote the securities as if the shareholder had specified an affirmative
vote.
4. The securities represented by this Proxy will be voted in accordance
with the instructions of the registered shareholder on any ballot of a
resolution that may be called for and, if the shareholder specifies a
choice with respect to any matter to be acted upon, the securities will
be voted accordingly. With respect to any amendments or variations in
any of the resolutions shown on the Proxy, or matters which may
properly come before the Meeting, the securities may be voted by the
individual appointed as the proxyholder, in its sole discretion, sees
fit.
5. If a registered shareholder votes by completing and returning the
Proxy, such shareholder may still attend the Meeting and vote in person
should such shareholder later decide to do so. To vote in person at the
Meeting, the shareholder must revoke the Proxy in writing as set forth
in the Management Proxy Circular.
6. This Proxy is not valid unless it is dated and signed by the
shareholder or by such shareholder's attorney duly authorized by such
shareholder in writing, or, in the case of a company, by its duly
authorized officer or attorney for the company. If the Proxy is
executed by an attorney for an individual shareholder or joint
shareholders or by an officer or an attorney of a corporate
shareholder, the instrument so empowering the officer or the attorney,
as the case may be, or a notarial copy thereof, must accompany the
Proxy.
7. A Proxy to be effective, must be deposited at the office of the
Company's registrar and transfer agent, Computershare Trust Company of
Canada, Proxy Department, 100 University Avenue, 9th Floor, Toronto,
Ontario M5J 2Y1, Fax (within North America): 1-866-249-7775 Fax
(outside North America): 416-263-9524, Email:
caregistryinfo@computershare.com, not less than 48 hours (excluding
Saturdays, Sundays and holidays) before the time for holding the
meeting or any adjournment thereof.
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