IMAGIS TECHNOLOGIES INC.
Suite 1300-1075 West Georgia Street
Vancouver, British Columbia V6E 3C9
Telephone: (604) 684-2449 Fax: (604) 684-4601
INFORMATION CIRCULAR
as at May 1, 2000
(unless otherwise noted)
This Information Circular is furnished in connection with the solicitation of
proxies by the management of IMAGIS TECHNOLOGIES INC. (the Company") for use
at the annual general meeting (the "Meeting") of its shareholders to be held
on June 23, 2000, at the time and place and for the purposes set forth in the
accompanying Notice of Meeting. Pursuant to Section 111 of the Company Act
(British Columbia), advance notice of the Meeting was published in The
Vancouver Sun on April 28, 2000, and filed with the Canadian Venture Exchange
Inc. and all provincial Securities Commissions in Canada. Currency figures are
Canadian Dollars unless otherwise noted.
GENERAL PROXY INFORMATION
Solicitation of Proxies
The solicitation of proxies will be primarily by mail, but proxies may be
solicited personally or by telephone by directors, officers and regular
employees of the Company. All costs of this solicitation will be borne by the
Company.
Appointment and Revocation of Proxies
The individuals named in the accompanying form of proxy as proxyholders are
directors or senior officers of the Company. A shareholder has the right to
appoint a person, who need not be a shareholder, to attend and act for the
shareholder and on the shareholder's behalf at the Meeting other than either
of the persons designated in the accompanying form of proxy, and may do so
either by inserting the name of that other person in the blank space provided
in the accompanying form of proxy or by completing and delivering another
suitable form of proxy.
A proxy will not be valid unless the completed, signed and dated form of proxy
is delivered to the office of CIBC Mellon Trust Company by fax (604) 688-4301,
by mail or by hand to Suite 1600, 1066 W. Hastings Street, Vancouver, British
Columbia, V6E 3X1 not less than 48 hours (excluding Saturdays, Sundays, and
holidays) before the Meeting or the adjournment thereof at which the proxy is
to be used.
A shareholder who has given a proxy may revoke it by an instrument in writing
duly executed and delivered either to CIBC Mellon Trust Company or to the
registered office of the Company at P.O. Box 11117, Royal Centre, Suite 1500 -
1055 West Georgia Street, Vancouver, British Columbia V6E 4N7, at any time up
to and including the last business day that precedes the day of the Meeting
or, if the Meeting is adjourned, that precedes any reconvening thereof, or to
the chairman of the Meeting on the day of the Meeting or of any reconvening
thereof, or in any other manner provided by law. A revocation of a proxy will
not affect a matter on which a vote is taken before the revocation.
Registered and Unregistered Shareholders
Registered shareholders may vote the shares they hold in the Company either by
attending the Meeting in person or, if they do not plan to attend the Meeting,
by completing the proxy and following the delivery instructions contained in
the form of proxy and this Information Circular.
Unregistered shareholders, being persons whose holdings of shares of the
Company are registered in the name of a stockbroker or financial intermediary,
must follow special procedures if they wish to vote at the Meeting. To vote in
person at the Meeting, an unregistered shareholder must insert his or her name
in the space provided in the proxy for the appointment of a person, other than
the persons named in the proxy, as proxyholder. In such case, the unregistered
shareholder attends as a proxyholder for their own shareholdings and is
subject to the same limitations as any other proxyholder in voting shares (see
"Exercise of Discretion"). If the unregistered shareholder does not plan to
attend the Meeting, the unregistered shareholder can vote by proxy, by
following the instructions included on the proxy and provided to the
unregistered shareholder by the relevant financial intermediary. In either
case, the proxy must be delivered in the manner provided for in this
Information Circular or as instructed by the shareholder's financial
intermediary. An unregistered shareholder who
<PAGE>
2
does not follow the instructions for delivery of the relevant form of proxy
and who attends the Meeting will not be entitled to vote at the Meeting.
Exercise of Discretion
The nominees named in the accompanying form of proxy will vote or withhold
from voting the shares represented thereby in accordance with the instructions
of the shareholder on any ballot that may be called for. A proxy in the
accompanying form will confer discretionary authority on the nominees named
therein with respect to
(a) each matter or group of matters identified therein for which a choice
is not specified, other than the election of directors and the
appointment of an auditor,
(b) any amendment to or variation of any matter identified therein, and
(c) any other matter that properly comes before the Meeting.
In respect of a matter for which a choice is not specified in the proxy, the
nominees named in the accompanying form will vote shares represented by the
proxy for the approval of such matter.
As of the date of this Information Circular, management of the Company knows
of no amendment, variation or other matter that may come before the Meeting,
but if any amendment, variation or other matter properly comes before the
Meeting, each nominee intends to vote thereon in accordance with the nominee's
best judgment.
Voting Shares and Principal Shareholders
Voting of Common Shares-General
Only shareholders of record at the close of business on May 17, 2000, who
either attend the Meeting personally or complete, sign and deliver a form of
proxy in the manner and subject to the provisions described above will be
entitled to vote or to have their shares voted at the Meeting. As of May 1,
2000, the Company had outstanding 11,818,795 fully paid and non-assessable
common shares without par value, each carrying the right to one vote.
Advice to Beneficial Holders of Common Shares
The information set forth in this section is of significant importance to many
shareholders as a substantial number of shareholders do not hold their common
shares in their own name. Shareholders who do not hold their common shares in
their own name (referred to in this Information Circular as "Beneficial
Shareholders") should note that only proxies deposited by shareholders whose
names appear on the records of the Company as the registered holders of common
shares can be recognized and acted upon at the Meeting. If the common shares
are listed in an account statement provided to a shareholder by a broker, then
in almost all cases those shares will not be registered in the shareholder's
name on the records of the Company. Such shares will more likely be registered
under the names of the shareholder's broker or an agent of that broker.
In Canada, the vast majority of such shares are registered under the name of
CDS & Co. (the registration name for The Canadian Depositary for Securities,
which acts as nominee for many Canadian brokerage firms). Common shares held
by brokers or their agents or nominees can only be voted (for or against
resolutions) upon the instruments of the Beneficial Shareholder. Without
specific instructions, brokers and their agents and nominees are prohibited
from voting shares for the broker's clients. Therefore, Beneficial
Shareholders should ensure that instructions respecting the voting of their
common shares are communicated to the appropriate person.
Applicable regulatory policy requires intermediaries/brokers to seek voting
instructions from Beneficial Shareholders in advance of shareholders'
meetings. Every intermediary/broker has its own mailing procedures and
provides its own return instructions to clients, which should be carefully
followed by Beneficial Shareholders in order to ensure that their common
shares are voted at the Meeting. The purpose of the form of proxy supplied to
a Beneficial Shareholder by its broker (or the agent of the broker) is limited
to instructing the registered shareholders (the broker or agent of the broker)
how to vote on behalf of the Beneficial Shareholder. The majority of brokers
now delegate responsibility for obtaining instructions from clients to
Independent Investor Communications Corporation ("IICC"). IICC typically mails
a special proxy form to the Beneficial Shareholders and asks Beneficial
Shareholders to return the proxy forms to IICC. IICC then tabulates the
results of all instructions received and provides appropriate instructions
respecting the voting of common shares to be represented at
<PAGE>
3
the Meeting. A Beneficial Shareholder receiving a proxy form from IICC cannot
use that proxy to vote shares directly at the Meeting the proxy must be
returned to IICC well in advance of the Meeting in order to have the common
shares voted.
Although a Beneficial Shareholder may not be recognized directly at the
Meeting for the purposes of voting common shares registered in the name of his
or her broker (or agent of the broker), a Beneficial Shareholder may attend at
the Meeting as proxyholder for the registered shareholder and vote the common
shares in that capacity. Beneficial Shareholders who wish to attend at the
Meeting and indirectly vote their common shares as proxyholder for the
registered shareholder should enter their own names in the blank space on the
Instrument of Proxy provided to them and return the same to their broker (or
broker's agent) in accordance with the instructions provided by such broker
(or agent), well in advance of the Meeting.
Principal Holders of Common Shares
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 outstanding shares of the Company, which have the right to vote in all
circumstances, other than:
Number of Percentage of
Name Shares Held Issued Shares
Pacific Cascade Consultants Ltd.(1) 1,811,387 15.3%
(1) Pacific Cascade Consultants Ltd. is owned as to 50% by FWC Holdings Ltd.,
which is controlled by Frederick Clarke, and as to 50% by Andrew Amanovich.
ELECTION OF DIRECTORS
The size of the board of directors is currently determined at five. The board
proposes that the number of directors be increased to seven. Shareholders will
therefore be asked to approve an ordinary resolution that the number of
directors elected be fixed at seven.
The term of office of each of the current directors will end at the conclusion
of the Meeting. Each director elected will hold office until the conclusion of
the next annual general meeting of the Company at which a director is elected,
unless the director's office is earlier vacated in accordance with the
Articles of the Company or the provisions of the Company Act (British
Columbia).
<TABLE>
<CAPTION>
Name, Present Position
with Company and Previously a Shares
Municipality of Residence Present Principal Occupation Director Since Owned(2)
<S> <C> <C> <C>
Iain Drummond(3) President, Chief Executive Officer and director of the Feb. 12, 1999 7,500
President, Chief Company; previously President of Imagis Cascade indirect
Executive Officer and Technologies Inc.
Director
Vancouver, B.C., Canada
Sandra E. Buschau(3) Public company administrator July 6, 1998 3,000 direct
Secretary and Director 150,000
Vancouver, B.C., Canada escrow
Altaf Nazerali(3)(5) Financier July 6, 1998 250,000
Director escrow
North Vancouver, B.C., 31,250
Canada indirect
Rory Godinho(3)(5) Lawyer; principal, Godinho Sinclair July 6, 1998 122,500
Director direct
West Vancouver, B.C., 100,000
Canada escrow
Frederick Clarke(5) Founder and Chairman of The Clarke Group of companies, Feb.12, 1999 50,000
Director diversified forestry organization direct
Abbotsford, B.C. 905,693
<PAGE>
4
Name, Present Position
with Company and Previously a Shares
Municipality of Residence Present Principal Occupation(1) Director Since Owned(2)
Canada
Oliver "Buck" Revell Chairman of the Board of the Company; President, RevellJan. 31, 2000 Nil
Dallas, TX, U.S.A. Group International
Robert Gordon Senior Vice-President Oracle Corporation Feb. 15, 2000 Nil
London, England
</TABLE>
(1) Includes occupations for preceding five years unless the director was
elected at the previous Annual General Meeting and was shown as a nominee for
election as a director in the Information Circular for that meeting.
(2) The approximate number of shares of the Company carrying the right to vote
in all circumstances beneficially owned, directly and indirectly, or over
which control or direction is exercised by each proposed nominee as of April
30, 2000.
(3) Member of Executive Committee.
(4) Pacific Cascade Consultants Ltd. ("Pacific") owns 1,811,387 common shares
in the capital of the Company. Pacific is owned as to 50% by FWC Holdings
Ltd., which is controlled by Frederick Clarke, and 50% by Andrew Amanovich,
the Company's Chief Technology Officer.
(5) Member of Audit Committee.
Pursuant to the provisions of the Company Act (British Columbia) the Company
is required to have an Audit Committee whose members are indicated above.
REMUNERATION AND APPOINTMENT OF AUDITORS
The persons named in the enclosed proxy, unless directed by the shareholders
completing the proxy to abstain from doing so, intend to vote for the
appointment of KPMG LLP, Chartered Accountants, of 777 Dunsmuir Street,
Vancouver, British Columbia, as auditors for the Company to hold office until
the next Annual General Meeting of the shareholders, at a remuneration to be
fixed by the directors.
COMPENSATION OF EXECUTIVE OFFICERS
Executive Compensation
During the Company's financial year ended December 31, 1999, the aggregate
direct remuneration paid or payable to the Company's directors and senior
officers by the Company and its subsidiaries, all of whose financial
statements are consolidated with those of the Company, was $267,133. The
direct remuneration paid or payable to Company's directors and senior officers
by subsidiaries of the Company whose financial statements are not consolidated
with those of the Company was nil.
No pension plans or retirement benefit plans have been instituted by the
Company and none are proposed at this time.
During the financial year ended December 31, 1999, the Company paid office
expenses of $144,320 for accounting, rent and administrative expenses charged
by a company, certain directors of which are directors of the Company. Of this
amount, $6,000 per month was for rent of office space.
Statement of Executive Compensation
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
Securities
Granted Restricted All Other
Name and Other Annual Under Shares or LTIP(3) Compen-
Principal Position Fiscal Salary Bonus Compensation Options/ Restricted Payouts sation
of Named Year ($) ($) ($) SARs(2) Share Units ($) ($)
Executive Officer Ending(1) Granted # ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Iain Drummond 1999 $125,000 Nil Nil Nil Nil Nil Nil
President (5)
Altaf Nazerali(6) 1998 Nil Nil Nil Nil Nil Nil Nil
Former President
</TABLE>
(1) The Company was incorporated on March 23, 1998 and accordingly, the
Statement of Executive Compensation is restricted to the last two fiscal
years.
(2) "SARS" or "stock appreciation right" means a right granted by the Company,
as compensation for services rendered, to receive a payment of cash or an
issue or transfer of securities based wholly or in part on changes in the
trading price of publicly traded securities of the Company.
(3) "LTIP" or "long term incentive plan" means any plan which provides
compensation intended to serve as incentive for performance to occur over a
period longer than one financial year, but does not include option or stock
appreciation right plans or plans for compensation through restricted shares
or restricted share units.
(4) Mr. Drummond was issued a warrant to purchase 400,000 shares in the
capital of the Company at an exercise price of $1.25 per share in
consideration of renouncing his right to acquire up to 6% equity interest in
Imagis Cascade Technologies Inc. At the date of grant, being February 25,
1999, the Company's shares were trading in the $1.10 range. The Drummond
warrant was priced in line with the Company's proposed Exchange Offering
Prospectus public offering and at a premium to the Company's trading price.
(5) The value of perquisites and other personal benefits received by the Named
Executive Officer during the year was not greater than 10% of the total annual
salary and bonus of such Named Executive Officer.
(6) Mr. Nazerali resigned as President on February 23, 1999.
The Company has no-long term incentive plans and in accordance with the
instructions contained in Form 41 of the Rules to the Securities Act (British
Columbia), the table respecting LTIP awards is not presented.
Option/SAR Grants During the Most Recently Completed Financial Year
No options were granted to the Named Executive Officers during the most
recently completed financial year.
Aggregate Option/SAR Exercises During the Most
Recently Completed Financial Year and Financial Year Option/SAR Values
During the most recently completed financial year ended December 31, 1999, no
stock options were exercised by the Named Executive Officers.
<TABLE>
<CAPTION>
Unexercised
Options/SARS at Value of Unexercised in the
Fiscal Year End (#) Money Options/SARS at
Name of Executive Securities Acquired Aggregate Value Exercisable/ Fiscal Year End ($)
Officer on Exercise (#) Realized ($) Unexerciable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Iain Drummond Nil Nil 400,000 exercisable Nil
Altaf Nazerali Nil Nil 80,000 exercisable 26,400
</TABLE>
Option/SAR Repricings
No stock options granted to the Named Executive Officers were repriced during
the most recently completed financial year ended December 31, 1999.
<PAGE>
6
Termination of Employment, Change in Responsibilities and Employment Contracts
There are no compensatory plans or arrangements with respect to the Named
Executive Officers resulting from the resignation, retirement or any other
termination of employment of the officer's employment or from a change of the
Named Executive Officer's responsibilities following a change in control.
Compensation of Directors
There are no arrangements under which directors were compensated by the Issuer
and its subsidiaries during the financial year ended December 31, 1999, for
their services in their capacity as directors or consultants other than for
the sum of $2,000 per month plus taxes payable to each of Ms. Sandra Buschau
and Mr. Rory Godinho, for consulting services.
ADDITIONAL COMPANY INFORMATION
Indebtedness of Directors, Executive Officers and Senior Officers
None of the directors, executive officers, or senior officers of the Company
or any subsidiary thereof, or any associate or affiliate of any of them, is or
has been indebted to the Company.
Directors' and Officers' Liability
Under an existing policy of insurance, the Company is entitled to be
reimbursed for indemnity payments it is required or permitted to make to
directors and officers. The directors and officers of the Company as
individuals are insured for losses arising from claims against them for
certain of their acts, errors or omissions. The policy provides a maximum
coverage in any one policy year of US$5 million in annual claims (subject to a
deductible of US $100,000 per securities and other conduct claim and US$50,000
for other claims) payable by the Company. The annual premium in the current
fiscal year is US$44,900. The premiums for the policy are not allocated
between directors and officers as separate groups.
Interest of Insiders in Material Transactions
To the knowledge of management of the Company, no insider or nominee for
election as a director of the Company had any interest in any material
transaction during the year ended December 31, 1999, or has any interest in
any material transaction in the current year, except as set out herein and as
follows:
(a) Pursuant to a private placement agreement dated January 26, 1999, Pacific
Cascade Consultants Ltd., owed 50% by FWC Holdings Ltd. a company controlled
by Mr. Frederick Clarke, subscribed for 267,857 shares of the Company at a
price of $0.56 per share. The shares were issued on March 22, 1999.
(b) Pursuant to the Company's news release of February 1, 2000, the Company
arranged a private placement of 875,000 units at a price of $0.80 per unit, of
which the following directors and senior officers subscribed for units:
Name of Director/Senior Officer Number of Units
Pacific Cascade Consultants Ltd. (1) 25,000
Rory S. Godinho 45,000
Altaf Nazerali 31,250
Total 101,250
(1) Owned 50% by FWC Holdings Ltd. a company controlled by Mr. Frederick
Clarke and 50% by Andrew Amanovich, the Company's Chief Technology Officer.
Each unit consists of one common share and one non-transferable share purchase
warrant entitling the holder thereof to purchase an additional common share
for a period of one year at a price of $0.80 per share. The units were issued
on March 17, 2000.
(c)The following stock options are held by directors, director nominees and
senior officers of the Company:
<PAGE>
7
Number of Exercise
Name of Optionee Options Held Price Date of Grant Expiry Date
Ross Wilmot 75,000 $0.30 July 7, 1998 July 7, 2003
Sandra Buschau 75,000 $0.30 July 7, 1998 July 7, 2003
Altaf Nazerali 80,000 $0.30 July 7, 1998 July 7, 2003
Andy Amanovich 75,000 $1.00 Feb. 25, 1999 Feb.25, 2004
Fred Clarke 50,000 $1.00 Feb. 25, 1999 Feb. 25, 2004
Rory Godinho (1) 100,000 $1.00 Feb. 25, 1999 Feb. 25, 2004
Oliver Revell 45,000 $1.00 Mar. 26, 1999 March 26,2004
Reid Morden 45,000 $1.00 Apr. 13, 1999 Apr. 13, 2004
Robert Gordon 60,000 $1.00 July 19, 1999 July 19, 2004
Sandra Buschau 15,000 $1.00 Jan 19, 2000 Jan 19, 2005
Ross Wilmot 15,000 $1.00 Jan 19, 2000 Jan 19, 2005
Oliver Revell 15,000 $1.00 Jan 19, 2000 Jan 19, 2005
Number of Exercise
Name of Optionee Options Held Price Date of Grant Expiry Date
Andy Amanovich 15,000 $1.00 Jan. 19, 2000 Jan. 19, 2005
Altaf Nazerali 15,000 $1.00 Jan. 19, 2000 Jan.19, 2005
Total 680,000
(1) Options exercised subsequent to the December 31, 1999, year end.
Management Contracts
Pursuant to an agreement dated February 23, 1999, the Company retained Mr.
Iain Drummond, the President, Chief Executive Officer and a director of the
Company, to act as President and Chief Executive Officer of Imagis. He is paid
a salary by Imagis of $125,000 per annum. In fiscal 2000 Mr. Drummond has a
target bonus of 50% of his base salary for achieving annual sales targets.
On closing of the acquisition of Imagis Cascade Technologies Inc. by the
Company, Mr. Drummond was elected a director of the Company and appointed as
its President and Chief Executive Officer.
Management services for the Company are not, to any material degree, performed
by persons other than the senior officers of the Company.
PARTICULARS OF MATTERS TO BE ACTED UPON
Approval of 2000 Stock Option Plan
In order to provide incentive to directors, officers, employees, management,
and others who provide services to the Company to act in the best interests of
the Company, the Company adopted a stock option plan in 1999 (the "1999
Plan"). The 1999
Plan was approved by shareholders at the Company's annual general meeting held
on June 16, 1999. Under the 1999 Plan, a total of 1,800,000 shares of the
Company were reserved for share incentive options to be granted at the
discretion of the Company's board of directors to eligible optionees (the
"Optionees"). At the date of this Information Circular, a total of 1,285,000
options were granted under the 1999 Plan of which 995,000 options are
outstanding as of the date hereof. Of the total number of options granted,
680,000 options were granted to Insiders. The are currently 515,000 options
available for grant under the 1999 Plan.
Management seeks shareholder approval for the Company to adopt a new stock
option plan (the "2000 Plan") in accordance with and subject to the rules and
policies of the Canadian Venture Exchange Inc. (the "CDNX"). The 2000 Plan is
being established to provide incentive to qualified parties to increase their
proprietary interest in the Company and thereby aid the Company in attracting,
retaining and encouraging the continued involvement of such persons with the
Company. It is proposed that under the 2000 Plan, which will be subject to
both shareholder and regulatory approval, the total number of common shares
allotted and reserved for future issuance will be equivalent to approximately
20% of the issued and outstanding share capital of the Company as of the
Meeting date. Any options currently outstanding shall be included as part of
and governed by the 2000 Plan.
<PAGE>
8
The effect of adopting the 2000 Plan, will be to reset the number of options
available for grant to be calculated on the basis of the difference between
the existing options outstanding as of the date of the Meeting and the amount
that is equivalent to 20% of the Company's issued and outstanding shares as of
the date of the Meeting (the "Maximum Amount"), as opposed to the difference
between the sum of all options previously granted and the Maximum Amount.
Accordingly, in the event no further
options are exercised before the Meeting and the Company's issued and
outstanding shares remain the same, then provided the 2000 Plan is approved by
shareholders and accepted for filing by CDNX, there will be approximately
1,368,000 options available for grant.
Regulatory Requirements
The Company's common shares trade on the CDNX, which requires that listed
companies obtain the approval of their members for stock option plans, where
it is a share compensation arrangement which, together with all of the
Company's other previously established or proposed share compensation
arrangements, could result, at any time, in:
(a) the number of shares reserved for issuance pursuant to stock options
exceeding 10% of the Company's issued and outstanding share capital; or
(b) the issuance, within a one year period, of a number of shares exceeding
10% of the Company's issued and outstanding share capital.
Disinterested shareholder approval of stock options must be obtained where:
(a) a stock option plan, together with all of the Company's other previously
established or proposed stock option grants could result at any time in:
(i) the number of shares reserved for issuance pursuant to stock options
granted to Insiders exceeding 10% of the outstanding issue;
(ii) the issuance to Insiders, within a one year period of a number of shares
exceeding 10% of the outstanding issue; or
(iii) the issuance to any one Insider and such Insider's associates, within a
one year period of a number of shares exceeding 5% of the outstanding
issue (the ability to grant in excess of 5% per year to Insiders is
restricted to Tier 1 issuers).
(b) the Company is decreasing the exercise price of stock options previously
granted to Insiders.
If disinterested shareholder approval is required, the stock option agreement
or plan must be approved by a majority of the votes cast by all members at the
shareholders' meeting excluding votes attaching to shares owned by:
(i) Insiders to whom options may be issued under the stock option plan;
and
(ii) associates of persons referred to in item (ii) above.
Non-voting and subordinate voting shares are to be given full voting rights in
these circumstances.
The term "Insider" is defined in the Securities Act (British Columbia) and
generally includes directors, senior officers, the five highest paid employees
and holders of greater than 10% of the voting securities of the Company.
For the purpose of the 2000 Plan, the Company's issued and outstanding share
capital is determined on the basis of the number of shares that are issued and
outstanding immediately prior to the share issuance in question, excluding
shares issued
pursuant to share compensation arrangements over the preceding one year
period.
The Company's Insiders will participate in the Company's 2000 Plan. While it
is not expected that Insiders, as a group, will necessarily acquire the
majority of shares allocated under the 2000 Plan, it is possible that this
could happen.
<PAGE>
9
The number of shares that will be reserved for issuance under the new 2000
Plan may exceed 10% of the Company's issued and outstanding share capital.
Accordingly, management will ask disinterested shareholders to approve the new
2000 Plan (see "Disinterested Shareholder Approval" below).
Terms of 2000 Plan
A full copy of the 2000 Plan will be available at the special general meeting
for review by members. Also, members may obtain copies of the 2000 Plan from
the Company prior to the meeting on request. The following is a summary of the
2000 Plan:
The 2000 Plan will terminate when all of the options have been granted or when
the 2000 Plan is otherwise terminated by the Company. Any options outstanding
when the 2000 Plan is terminated will remain in effect until they are
exercised or they expire.
The 2000 Plan provides that stock options can be issued to directors, senior
officers, employees, full-time dependent contractors, part-time dependent
contractors and consultants of the Company or any of its affiliates or
subsidiaries or to employees of companies providing management or
administrative services to the Company.
The 2000 Plan provides that it is solely within the discretion of the Board to
determine who should receive options and in what amounts.
Options granted under the 2000 Plan will be for a term not to exceed 5 years
from the date of their grant unless the Company is categorized as a Tier 1
issuer, in which case the maximum term will be not more than 10 years from the
date of grant. The
options will be non-assignable except that they will be exercisable by the
personal representative of the option holder in the event of the option
holder's death.
All stock options and any shares issued on the exercise of stock options will
be legended with a four month hold period from the date the stock options are
granted.
As the number of options granted by the Company will likely exceed 10% of the
Company's issued and outstanding shares, options granted under the terms of
the 2000 Plan will be exercisable at a price which is not less than the
Discounted Market Price (which is the market price less a discount of 25% for a
closing price of $0.51 to $2.00 and a discount of 15% for a closing price above
$2.00, subject to a minimum of $0.10 and to certain exemptions described in the
CDNX policy manual). Options granted to a person who is engaged in investor
relations activities will expire within a maximum of 30 days after the optionee
ceases to be employed and options granted to all other persons will expire
within a maximum of 90 days from the date the optionee ceases to hold their
position or office.
For as long as the Company is categorized as a Tier 2 issuer, stock options
granted under the 2000 Plan will be subject to vesting provisions over a
period of not less than 18 months, although the Company generally institutes a
3 year vesting provision.
All of the other provisions described in this Information Circular regarding
the CDNX's policy in respect of stock options are incorporated in the 2000
Plan.
The Company will not issue shares pursuant to options granted under the 2000
Plan until the shares have been fully paid for.
The Company will not provide financial assistance to option holders to assist
them in exercising their options.
Disinterested Shareholder Approval
To meet all of the requirements of the CDNX (see "Regulatory Requirements"
above), the Company must obtain the approval of its disinterested shareholders
by putting the proposal to establish the 2000 Plan to the members for a vote.
For the purposes of the vote, all of the Company's directors and its officers
shall be considered Insiders, such that they and their associates may not vote
on the matter.
Recommendation
<PAGE>
10
The Company is of the view that the 2000 Plan provides the Company with the
flexibility necessary to attract and maintain the services of senior
executives and other employees in competition with other businesses in the
industry. Directors shall
also have the authority to amend the 2000 Plan to reduce, but not increase,
the benefits to its participants if in their discretion it is necessary or
advisable in order to obtain any necessary regulatory approvals. If
shareholders do not approve the 2000 Plan, the Company will continue to grant
options under the 1999 Plan.
OTHER MATTERS
Management is not aware of any other matters that it anticipates will come
before the Meeting as of the date of mailing of this Information Circular.
ON BEHALF OF THE BOARD OF DIRECTORS
/s/ Sandra Buschau
-----------------------------------
Sandra Buschau, Corporate Secretary
<PAGE>
Proxy
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF
IMAGIS TECHNOLOGIES INC. TO BE HELD AT SUITE 1300,
1075 WEST GEORGIA STREET, VANCOUVER, BRITISH COLUMBIA
ON FRIDAY, JUNE 23, 2000, AT 2:00 P.M.
The undersigned Shareholder of the Company hereby appoints Iain Drummond, the
President, Chief Executive Officer and a Director of the Company, or failing
this person, Rory Godinho, a Director of the Company, or in the place of the
foregoing, ____________________(please print the name), as proxyholder for and
on behalf of the Shareholder with the power of substitution to attend, act and
vote for and on behalf of the Shareholder in respect of all matters that may
properly come before the aforesaid meeting of the Shareholders of the Company
(the "Meeting") and at every adjournment thereof, to the same extent and with
the same powers as if the undersigned Shareholder was present at the said
Meeting, or any adjournment thereof.
The Shareholder hereby directs the proxyholder to vote the securities of the
Company registered in the name of the Shareholder as specified herein.
Resolutions (For full details of each item, please see the enclosed Notice of
Meeting and Information Circular)
For Against
1. To increase to and fix the number of
directors at seven
2. To pass an ordinary resolution of disinterested
shareholders to approve the Company's new stock
option plan (the 2000 Plan)
For Withhold
3. To appoint and remunerate KPMG LLP, Chartered
Accountants
4. To elect as Director Iain Drummond
5. To elect as Director Sandra E. Buschau
6. To elect as Director Altaf Nazerali
7. To elect as Director Rory Godinho
8. To elect as Director Frederick Clarke
9. To elect as Director Oliver "Buck" Revell
10. To elect as Director Robert Gordon
The undersigned Shareholder hereby revokes any proxy previously
given to attend and vote at said Meeting.
SIGN HERE:
-----------------------------------------
Please Print Name:
-----------------------------------------
Date:
-----------------------------------------
THIS PROXY FORM MAY NOT BE VALID UNLESS IT IS SIGNED AND DATED.
SEE IMPORTANT INFORMATION AND INSTRUCTIONS ON REVERSE.
<PAGE>
INSTRUCTIONS FOR COMPLETION OF PROXY
1. This Proxy is solicited by the Management of the Company.
2. This form of proxy ("Instrument of Proxy") may not be valid unless it is
signed by the Shareholder or by his attorney duly authorized by him in
writing, or, in the case of a corporation, by a duly authorized officer or
representative of the corporation; and if executed by an attorney, officer, or
other duly appointed representative, the original
or a notarial copy of the instrument so empowering such person, or such other
documentation in support as shall be acceptable to the Chairman of the
Meeting, must accompany the Instrument of Proxy.
3. If this Instrument of Proxy is not dated in the space provided, authority
is hereby given by the Shareholder for the proxyholder to date this proxy on
the date on which it is received by CIBC Mellon Trust Company.
4. A Shareholder who wishes to attend the Meeting and vote on the resolutions
in person may do so as follows:
(a) If the Shareholder is registered as such on the books of the Company,
simply register the Shareholder's attendance with the scrutineers at the
Meeting.
(b) If the securities of a Shareholder are held by a financial institution,
(i) cross off the management appointees' names and insert the Shareholder's
name in the blank space provided; (ii) indicate a voting choice for each
resolution or, alternatively, leave the choices blank if you wish not to vote
until the Meeting; and (iii) sign,
date and return the Instrument of Proxy to the financial institution or its
agent. At the Meeting, a vote will be taken on each of the resolutions set out
on this Instrument of Proxy and the Shareholder's vote will be counted at that
time.
5. A Shareholder who is not able to attend the Meeting in person but wishes to
vote on the resolutions may do either of the following:
(a) To appoint one of the management appointees named on the Instrument of
Proxy, leave the wording appointing a nominee as is, and simply sign, date and
return the Instrument of Proxy. Where no choice is specified by a Shareholder
with respect to a resolution set out on the Instrument of Proxy, a management
appointee acting as proxyholder will vote the securities as if the Shareholder
had specified an affirmative vote.
(b) To appoint another person, who need not be a Shareholder of the Company,
to vote according to the Shareholder's instructions, cross off the management
appointees' names and insert the Shareholder's appointed proxyholder's name in
the space provided, and then sign, date and return the Instrument of Proxy.
Where no choice is specified by the Shareholder with respect to a resolution
set out on the Instrument of Proxy, this Instrument of Proxy confers
discretionary authority
upon the Shareholder's appointed proxyholder.
6. The securities represented by this Instrument of Proxy will be voted or
withheld from voting in accordance with the instructions of the Shareholder on
any poll 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. Further, if so
authorized by this Instrument of Proxy, the securities will be voted by the
appointed proxyholder with respect to any amendments or variations of any of
the resolutions set out on the Instrument of Proxy or matters which may
properly come before the Meeting as the proxyholder in its sole discretion
sees fit.
7. If a registered Shareholder has returned the Instrument of Proxy, the
Shareholder may still attend the Meeting and may vote in person should the
Shareholder later decide to do so. However, to do so, the Shareholder must
record his/her attendance with the scrutineers at the Meeting and revoke the
Instrument of Proxy in writing.
To be represented at the Meeting, this Instrument of Proxy must be RECEIVED at
the office of CIBC MELLON TRUST COMPANY by mail or by fax no later than forty-
eight (48) hours (excluding Saturdays, Sundays and holidays) prior to the time
of the Meeting, or adjournment thereof.
The mailing address of CIBC Mellon Trust Company is P.O. Box 1900, Vancouver,
British Columbia, V6C 3K9 and its fax number is (604) 688-4301.
<PAGE>
IMAGIS TECHNOLOGIES INC.
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
NOTICE is hereby given that the Annual General Meeting of the shareholders of
Imagis Technologies Inc. (the "Company") will be held at Suite 1300, 1075 West
Georgia Street, Vancouver, British Columbia, on Friday, June 23, 2000, at 2:00
p.m., for the following purposes:
1. To receive and consider the Report of the Directors.
2. To receive and consider the audited financial statements of the
Company for the year ended December 31, 1999, together with the
auditors' report thereon.
3. To appoint auditors for the ensuing year and to authorize the
directors to fix the remuneration to be paid to the auditors.
4. To fix the number of directors for the ensuing year at seven.
5. To elect directors for the ensuing year.
6. To consider and, if deemed advisable, pass an ordinary resolution of
disinterested shareholders to approve the Company's 2000 stock
option plan (the "2000 Plan"), subject to regulatory approval, and
as more particularly described in the accompanying Information
Circular.
7. To transact such other business as may properly come before the
meeting.
Shareholders unable to attend the Annual General Meeting in person are
requested to read the enclosed Information Circular and Proxy, and then
complete and deposit the Proxy together with the power of attorney or other
authority, if any, under which it was signed or a notarially certified copy
thereof with the Company's transfer agent, CIBC Mellon Trust Company, Suite
1600 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X1, at
least 48 hours (excluding Saturdays, Sundays, and holidays) before the time of
the meeting or adjournment thereof. Unregistered shareholders who received the
Proxy through an intermediary must deliver the Proxy in accordance with the
instructions given by such intermediary.
DATED at Vancouver, British Columbia, this 1st day of May, 2000.
ON BEHALF OF THE BOARD OF DIRECTORS
/s/ Sandra Buschau
-----------------------------------
Sandra Buschau, Corporate Secretary
<PAGE>
SUPPLEMENTAL MAILING LIST RETURN CARD
(National Policy 41)
NOTICE TO SHAREHOLDERS OF IMAGIS TECHNOLOGIES INC.
On October 28, 1987, the Canadian Securities Administrators gave approval to
National Policy Statement No. 41 Shareholder Communication (the "Policy"),
which essentially established a framework for communication between issuers
and their registered and non-registered shareholders.
Companies incorporated in British Columbia were formerly required to deliver
interim (semi-annual) financial statements only to their registered
shareholders. The Policy now exempts companies from having to deliver these
statements to their registered shareholders if the companies sent 1st, 2nd, and
3rd quarter financial statements to those shareholders, whether registered or
not, who request in writing to receive them.
If you are a registered or non-registered shareholder, and wish to be placed
on a supplemental mailing list for the receipt of these financial statements,
you must complete and return the Supplemental Return Card below.
The supplemental mailing list will be updated each year and, therefore, a
Return Card will be required annually in order to receive quarterly financial
statements. All other shareholder mailings will continue to be mailed to
registered shareholders in the normal manner without the completion of a
Return Card.
-----------------------------------------------------------------------------
To: IMAGIS TECHNOLOGIES INC. (the "Company")
------------------------
The undersigned certifies that he/she/it is the owner of securities (other
than debt instruments) of the Company, and requests that he/she/it be placed
on the Company's Supplemental Mailing List in respect of its quarterly
financial statements.
------------------------------------
Name (Please Print)
------------------------------------
Address
------------------------------------
City/Province (or State)/Postal Code
------------------------------------ -----------------------------------
Signature of shareholder, or if Dated
shareholder is a Company, signature
of authorized signatory.
Please complete and return this document along with your Proxy in the attached
envelope or as indicated below. As the supplemental list will be updated each
year, a return card will be required from you annually in order for your name
to remain on the list.
CIBC Mellon Trust Company
P.O. Box 1900
Vancouver, British Columbia, V6C 3K9
Tel: (604) 688-4330
Fax: (604) 688-4301
