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Cymat Technologies Ltd. — Proxy Solicitation & Information Statement 2025
Feb 21, 2025
45886_rns_2025-02-21_b6eeed5f-7a71-4dd8-8f6f-698a53a00833.pdf
Proxy Solicitation & Information Statement
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CYMAT TECHNOLOGIES LTD.
Addendum to the Management Information Circular Dated November 8, 2024
This Addendum to the Cymat Technologies Ltd. (“Cymat” or “the Company”) Management Information Circular Dated November 8, 2024, provides an additional description of the Company’s current corporate governance practices in accordance with Form 58-101F1 of National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”).
Cymat’s Board of Directors consists of three individuals: Michael Liik, Martin Mazza and Alar Kongats. Michael Liik serves as the Chairman of the Board and is a member of the Audit Committee. Michael Liik is also the Chief Executive Officer of the Company and has been a Director since October 1999. Martin Mazza chairs the Audit Committee. Mr. Mazza is an independent Board member that has been on our Board since November 2002. He is a senior automotive industry executive with more than 30 years of experience in the automotive business. The automotive industry is the primary target for Cymat’s current business development efforts. Alar Kongats is the other independent member of the Audit Committee. Mr. Kongats is the founder of Kongats Architects, a Toronto-based, multiple-award-winning architecture firm. Traditionally, the architectural industry has been the chief source of revenue for Cymat’s products.
Martin Mazza and Alar Kongats are independent Directors as they both are separate from the management of Cymat and have no material relationship with the Company. Michael Liik is not considered an independent Director by virtue of his role as Cymat’s CEO and the material compensation that he receives for the performance of this role.
Michael Liik is the only Director that is presently a director of any other issuer that is a reporting issuer. Mr. Liik serves as a director for Forward Water Technologies Corp. which trades on the TSX Venture Exchange.
While the independent Directors do not hold regularly scheduled meetings, when appropriate, the Board may meet in the absence of members of management, or the independent Directors may hold in camera sessions at which neither the executive Director nor officers of the Company are in attendance. Such in camera sessions typically are held once or twice a year, following regular Board or Audit Committee meetings with the intention of facilitating open and candid discussion without the presence of Company management.
During the year ended April 30, 2024, the Board held eight meetings, and the Audit Committee held 5 meetings. The attendance record for each Director was as follows:
| Director Name | Board Meetings Held | Board Mtgs Attended | Audit Committee Meetings Held | Audit Committee Meetings Attended |
|---|---|---|---|---|
| Michael Liik | 8 | 8 | 5 | 5 |
| Martin Mazza | 8 | 8 | 5 | 5 |
| Alar Kongats | 8 | 7 | 5 | 5 |
The Board has adopted a written mandate. A copy of the Board mandate appears below in the Appendix.
The orientation program for new Directors is an informal one. Senior management (usually the CFO) provides new members with a copy of the Board mandate and the Code of Business Conduct and Ethics. The CFO also reviews recent Financial Statements and Management Discussion and Analysis with the new Director as well as providing a copy of the Company's Insider Trading Policy and reviewing its content with the new Director. Continuing education is incorporated into Board and Committee meetings and typically is led by the CFO, or other senior management or the Company's external auditors.
The Board has adopted a written code of ethical business conduct. A copy of Cymat's Code of Business Conduct and Ethics is available by sending a request to Cymat's CFO at [email protected]. To ensure that the Directors exercise independent judgment in the consideration of transactions and agreements in which a Director has a material interest, all such transactions/agreements are subject to review and approval by the independent Directors. Any interested director would be required to declare the nature and extent of their interest and would not be entitled to on matters which give rise to such a conflict. The Company believes that it has adopted corporate governance procedures and policies which encourage ethical behaviour by Directors, officers and employees. Board has ultimate responsibility for ensuring compliance with the Code of Business Conduct and Ethics. No departures from the Code have been noted since its adoption.
The Board may strike a Nominating Committee as the need or desire to add a new Director arises. Given the current Board composition of 3 members, a Nominating Committee would likely include all 3 Directors, with the most senior independent Director acting as Chair of the Committee.
The Audit Committee oversees the accounting and financial reporting practices and procedures of Cymat and the audits of the Company's financial statements. The principal responsibilities of the Audit Committee are: (i) reviewing and assessing the quality and integrity of Cymat's annual and quarterly financial statements and related management discussion and analysis, as well as all other material continuous disclosure documents; (ii) overseeing the quality and integrity of the internal controls and accounting procedures of the Company, including review of the Cymat's procedures for internal control with the external auditor and the CFO; (iii) monitoring compliance with legal and regulatory requirements related to financial reporting; (iv) reviewing and approving the engagement of the external auditor of the Company and approval of audit and related fees; (v) reviewing the qualifications, performance and independence of the external auditor; (vi) considering the auditor's recommendations and managing the relationship with the auditor, including meeting with the auditor as required in connection with the audit services or any related services provided to the Company; (vii) assessing the Company's financial and accounting personnel; (viii) reviewing the Company's risk management procedures; (ix) reviewing any significant transactions outside the Company's ordinary course of business and any pending litigation involving the Company; and (x) examining improprieties or suspected improprieties with respect to accounting and other matters that affect financial reporting.
In addition to the Audit Committee, the Board has a standing Compensation Committee that consists of the independent Directors. The Compensation Committee is responsible for determining and approving the compensation of the CEO and assisting the CEO in establishment of the compensation for the senior management team.
The Board has not adopted term limits for its Directors. The Board places a high value on the benefits that experience and continuity can bring to the effectiveness and functionality of the Board. The Board believes that the introduction of term limits would create the risk of excluding experienced and potentially valuable Board members as a result of an arbitrary service limitation. The Board believes that it can strike the right balance between continuity and fresh perspectives without mandated term limits.
At this time, the Company has not adopted a target regarding the representation of women on the Board or in executive officer positions. The Company recognizes that Director and executive officer background should represent a variety of perspectives, experiences and skills. Owing to the Company's small size and the pre-profitability its operations, attracting qualified Directors and officers of any background has presented challenges. Director and executive officer candidates are assessed based on merit including possession of relevant business experience, skill sets, competencies, technical expertise, sector specific knowledge and public company experience. This assessment process is undertaken with due regard for the benefit of diversity including the level of representation of women in these capacities.
No Director, executive officer, or employee of Cymat has been indebted to the Company nor has the Company been party to a guarantee, support agreement, letter of credit or any other similar arrangement to the benefit of a Cymat Director, executive officer or employee at any time in the Company's history.
February 20, 2025
Cymat Technologies Ltd.
APPENDIX
CYMAT TECHNOLOGIES LTD.
BOARD MANDATE
- GENERAL
The primary role of the Board of Directors ("Board") of Cymat Technologies Ltd. ("Cymat" or the "Company") is the stewardship of the business and affairs, and the general supervision and coaching of the management, of Cymat, with the fundamental objective of enhancing and preserving long term shareholder value. In addition to its primary accountability to Cymat and its shareholders, the Board is also accountable to government authorities and other stakeholders, such as employees, contractors, communities, and the public. The Board must ensure that the business and affairs of Cymat are conducted ethically and in accordance with the highest standards of corporate governance.
The Board shall meet periodically to review the Company's business operations, corporate governance practices and financial results. Meetings of the Board will also include regular meetings with management.
- RESPONSIBILITIES
The responsibilities of the Board required to ensure the overall stewardship of the Company include, without limitation to its general mandate, the following primary responsibilities:
(a) Legal Requirements.
The Board has the statutory responsibility to act in accordance with the obligations contained in the Canada Business Corporations Act (the "CBCA") and any other applicable laws and shall:
(i) manage, or supervise the management of, the business and affairs of the Company;
(ii) act honestly and in good faith with a view to the best interests of the Company;
(iii) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances; and
(iv) exercise independent judgment.
(b) Committees of the Board
(i) The Board has the authority to appoint a committee or committees and appoint directors to be members of these committees. The Board may delegate its powers to such committees except for those powers prohibited under the CBCA (as set out in subparagraph (c) below. The matters to be delegated to Committees of the Board and the constitution of the Committees shall be reviewed periodically as circumstances require. From time to time, the Board may create a special committee or committees to examine specific issues on behalf of the Board.
(ii) The Board will at all times have an Audit Committee, a Compensation Committee and a Corporate Governance and Nominating Committee. Each such committee will have a charter that has been approved by the Board.
(c) Non-Delegation
(i) The Board has the statutory responsibility for considering the following matters as a Board and may not delegate such matters to committees of the Board or to management of the Company:
1) any submission to the shareholders of any question or matter requiring the approval of the shareholders;
2) the filling of a vacancy among the directors or in the office of auditor, or the appointment of additional directors;
3) the issuance of securities except as authorized by the Board;
4) the declaration of dividends;
5) the purchase, redemption or any other form of acquisition of shares issued by the Company;
6) the payment of a commission to any person in consideration of the person purchasing or agreeing to purchase shares of the Company from the Company or from any other person, or procuring or agreeing to procure purchasers for any such shares except as authorized by the Board;
7) the approval of a management proxy circular;
8) the approval of a take-over bid circular, directors' circular or issuer bid circular;
9) the approval of an amalgamation of the Company;
10) the approval of all financial information and other disclosure documents that are required by law to be approved by the Board before they are released to the public;
11) the approval of an amendment to the articles of the Company; and
12) the adoption, amendment or repeal of any by-law of the Company.
(ii) In addition to those matters which at law cannot be delegated, the following is a list of matters which officers of the Company must refer to the Board, or an appropriate committee of the Board (where delegation to a committee is permitted by law), for approval. Under the guidelines, the "Threshold Amount" is equal to CDN$100,000 and an "Out of Budget Transaction" is a transaction that exceeds the Threshold Amount and that is not otherwise already part of the Company's approved operating budget.
1) The approval of annual corporate budgets.
2) Entering into transactions of a fundamental nature such as re-organizations, material acquisitions or dispositions.
3) Entering into any agreement or commitment to acquire or dispose of assets that are material to the Company including, but not limited to, those that are an Out of Budget Transaction.
4) Entering into, or making a material modification of, any agreement or commitment to become liable for any indebtedness, including the granting of a guarantee or similar standby obligation, if (a) the amount of such indebtedness is an Out of Budget Transaction or (b) any assets of the Company are made subject to a security interest in an Out of Budget Transaction.
5) Committing to making any capital expenditure which is an Out of Budget Transaction.
6) Entering into any contract, agreement or commitment out of the ordinary course of business if such agreement involves a commitment of financial resources which exceeds the Threshold Amount.
7) Entering into any agreement with an officer, director or 10% shareholder of the Company or any parent or subsidiary of the Company outside of the ordinary course of business.
8) Entering into any material contract or amending any material contract in place as of the date of adoption hereof.
9) Terminating, suspending or significantly modifying any material business activity or business strategy of the Company.
10) Undertaking a new business activity that requires an allocation of resources that exceed the Threshold Amount.
11) Making any material change to a business or strategic plan that has been approved by the Board.
12) Initiating or settling any legal proceeding involving a payment that may exceed the Threshold Amount.
13) Hiring or terminating of employment, or determining the compensation, of any person who is an executive officer of the Company.
14) Offering any material employment or consultancy terms to any individual or entity which is not customary for the Company. This determination is to be made by reference to terms of employment or consultancy that have generally been offered to other employees or consultants in similar positions or with similar status.
15) The approval of a request by the Chief Executive Officer ("CEO") or the Chief Financial Officer ("CFO") of the Company to serve on the board of another entity, other than not-for-profit entities or family businesses that in no material way competes with the Company or does any material business with the Company.
16) Any other matter specified by the Board as requiring its prior approval.
(d) Appointment and Oversight of Management
(i) The Board is responsible for approving the appointment of the CEO and the other executive officers of the Company and reviewing the performance of the CEO and other executive officers. The Board will determine the Compensation of the CEO. The Board will also develop the corporate goals and objectives that the CEO is responsible for meeting.
(ii) The Board has the responsibility, to the extent considered appropriate, to satisfy itself as to the integrity of the CEO and other executive officers of the Company and to ensure that the CEO and such other executive officers are creating a culture of integrity throughout the Company.
(iii) The Board will establish, and review on a periodic basis, its expectations for executive management generally.
(iv) The Board shall be responsible for ensuring that management succession programs are in place, including the selection, training, appointment,
monitoring, evaluation and, if necessary, the replacement of the CEO and other executives of the Company.
(e) Board Organization and Assessment
(i) The Board shall be responsible for managing its own affairs, such as matters related to its composition and size, the selection of the Chair of the Board, candidates to be nominated for election to the Board, committee chair appointments, committee charters and director compensation.
(ii) The Board will periodically assess the effectiveness of the Board as a whole, the committees of the Board and the contributions of individual directors, including consideration of the appropriate size of the Board.
(f) Strategic Planning
(i) The Board shall review and monitor the Company's long-term goals and strategic planning process. In fulfilling this responsibility, the Board will review, approve and modify, as appropriate, the strategies, policies and proposed actions presented to it by executive management of the Company.
(ii) The Board will periodically approve a strategic plan which takes into account, among other things, the opportunities and risks of the Company's business.
(g) Financial Performance and Financial Reporting Matters
(i) The Board shall review and monitor the Company's internal controls and management information systems to ensure the integrity of such controls and systems.
(ii) The Board shall identify the principal financial and controls risks to the Company and ensure that effective procedures are in place for the monitoring and management of these risks.
(iii) The Board shall review and approve significant accounting and financial matters and provide direction to management on these matters, as may be appropriate.
(iv) The Board shall approve all material regulatory filings, including the Company's annual audited financial statements, interim financial statements, the notes and management discussion and analysis accompanying such financial statements, quarterly and annual reports, management proxy circulars, annual information forms and prospectuses.
(h) Management of Risk
The Board shall be responsible for identifying the principal risks to the Company's business, including but not limited to, environmental, operating, political, financial, geological, and legal and regulatory risks, and ensuring that effective procedures are in place for the monitoring and management of those risks.
(i) Environmental Oversight
The Board is responsible for ensuring that the Company sets appropriate environmental standards for its operations and operates in material compliance with all applicable environmental laws and regulations.
(j) Corporate Governance and Policies and Procedures
(i) The Board shall be responsible for developing Cymat's approach to corporate governance, including developing a set of corporate governance principles and guidelines specific to Cymat.
(ii) The Board shall be responsible for approving policies and procedures designed to ensure that the Company operates at all times in compliance with all applicable laws and regulations and in accordance with the highest standards of ethics and corporate governance. Policies the Board will adopt include the following:
1) Code of Business Conduct and Ethics;
2) Insider Trading Policy;
3) Disclosure Policy; and
4) Whistleblower Policy.
(k) Disclosure and Communications
(i) The Board shall ensure that all material disclosure complies with applicable laws and the rules of the stock exchange(s) on which the Company's securities are listed.
(ii) The Board will adopt and review a disclosure policy to address communications with employees, security holders, the investment community, and the media
(iii) The Board will adopt procedures to ensure the Board receives feedback from security holders on material issues.
- COMPOSITION
The Board shall be constituted at all times of a majority of directors of the Board who are “independent” directors, as defined in National Instrument 58-101 – Corporate Governance, as such definition may be amended from time to time.
- DIRECTOR RESPONSIBILITIES
(a) Oversee Management of the Company. The principal responsibility of the directors is the stewardship of the business and affairs, and the general supervision and coaching of the management, of Cymat. This responsibility requires that the individual directors:
(i) review and approve on a periodic basis, and as the need arises, fundamental operating, financial, and other strategic corporate plans which take into account, among other things, the opportunities and risks of the business;
(ii) evaluate the performance of the Company;
(iii) evaluate the performance of, and oversee the progress and development of, executive management and take appropriate action, such as promotion, change in responsibility and termination;
(iv) implement executive management succession plans;
(v) establish a corporate environment that promotes timely and effective disclosure (including appropriate controls), fiscal accountability, high ethical standards and compliance with applicable laws and regulations;
(vi) evaluate the Company’s systems to identify and manage the risks faced by the Company;
(vii) review and decide upon material transactions and commitments;
(viii) develop a corporate governance structure that allows and encourages the Board to fulfill its responsibilities;
(ix) provide assistance to the Company’s executive management, including guidance on those matters that require Board involvement; and
(x) evaluate the overall effectiveness of the Board and its committees.
(b) Exercise Business Judgment. In discharging their fiduciary duties of care, loyalty and candour, directors are expected to exercise their business judgment to act in what they reasonably and honestly believe to be the best interests of the Company free from personal interests. In discharging their duties, the directors normally are entitled to rely on the Company’s senior executives and its outside advisors, auditors and legal counsel.
(c) Understand the Company and its Business. Directors are expected to become and remain informed about the Company and its business, properties, risks and prospects.
(d) Oversee Effective Systems. Directors shall have oversight responsibility for determining that effective systems are in place for the periodic and timely reporting to the Board on important matters concerning the Company. Directors shall have oversight responsibility relating to the Company's internal control and management information systems.
(e) Confidentiality and Proprietary Information. Directors are responsible for overseeing the establishment of policies that are intended to protect the Company's confidential and proprietary information from unauthorized or inappropriate disclosure. Likewise, all discussions and proceedings of the Board must be treated as strictly confidential and privileged to preserve open discussions between directors and to protect the confidentiality of Board discussions.
(f) Board and Board Committee Meetings. Directors are responsible for attending Board meetings and meetings of committees on which they serve. They must devote the time needed, and meet as frequently as necessary, to properly discharge their responsibilities.
(g) Indemnification. The directors are entitled to indemnification pursuant to the CBCA, the Company's by-laws and, when available on reasonable terms, through directors' and officers' liability insurance.
(h) Other Directorships. The Board does not believe that its members should be prohibited or discouraged from serving on boards of other organizations, and the Company does not propose any specific policies limiting such activities, providing they do not reduce a director's effectiveness or result in a continuing conflict of interest.
(i) Tenure. The Board does not believe it should establish director term limits. Term limits could result in the loss of directors who have been able to develop significant insight into the Company and its operations. Accordingly, there are no limits on the number of terms for which a director may hold office.
(j) Retirement. A director may be re-elected to serve the Board until the annual shareholders meeting following his or her 73rd birthday. Notwithstanding the foregoing, the Board may propose to shareholders that a director be elected after such a time if it is in the best interests of the Company.
- BOARD MEETINGS
(a) Selection of Agenda Items. The Chairman of the Board shall propose an agenda for each Board meeting. Each Board member is free to request the inclusion of other agenda items and is generally free to request at any Board meeting the consideration of subjects that are not on the agenda for that meeting, although voting on matters so raised may be deferred to another meeting to permit proper preparation for a vote on an unscheduled matter (emergencies excepted).
(b) Frequency and Length of Meetings. The Chairman of the Board, in consultation with the members of the Board, will normally determine the frequency and length of Board meetings; however, the ultimate power in this regard rests with the plenary Board. Special meetings may be called from time to time as required to address the needs of the Company's business.
(c) Advance Distribution of Materials. Information and data that are important to the Board's understanding of the business to be conducted at a Board or committee meeting will normally be distributed in writing to the directors reasonably before the meeting (with a goal of [three] days) and directors should review these materials in advance of the meeting. The Board acknowledges that certain items to be discussed at a Board or committee meeting may be of a very time-sensitive nature and that the distribution of materials on these matters before the meeting may not be practicable.
(d) Meetings of the Independent Directors. The independent members of the Board will meet when it is deemed advisable by the Lead Director, without any member of management present, for the purposes of evaluating management and discussing such other matters as may be appropriate. The independent directors will appoint one of their number to act as Secretary of such meetings. Minutes prepared in respect of meetings of the independent directors will be maintained by the Lead Director.
- ACCESS TO MANAGEMENT AND INDEPENDENT ADVISORS
(a) Access to Management. The Company will provide directors with access to the management of the Company. Any meetings or contacts that a director wishes to initiate should normally be arranged through the CEO or the CFO. The directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Company.
(b) Access To Independent Advisors. The Board and each committee shall have the power to hire and consult with independent legal, financial or other advisors for the benefit of the Board or such committee, as they may deem necessary and at the expense of the Company. Such independent advisors may be the regular advisors to the Company. The appointment of such outside advisors will be subject to the approval of the Corporate Governance and Nominating Committee.
- DIRECTOR COMPENSATION
The form and amount of director compensation will be recommended by the Compensation Committee and approved by the Board in accordance with the general principles set forth herein and in the Compensation Committee Charter. The Compensation Committee will also periodically review the compensation of the Company's directors and make recommendations to the Board.
- DIRECTOR ORIENTATION AND CONTINUING EDUCATION
An orientation program for new directors and continuing education programs for directors will be provided by management. Each director will receive a board manual, updated periodically, containing relevant management information, historical public information and the Company's various policies, codes, mandates and committee charters.
- CODE OF ETHICS
The Board, on the recommendation of the Corporate Governance and Nominating Committee, has adopted and maintains a Code of Business Conduct and Ethics applies to the employees, consultants, officers and directors of the Company.
- PERIODIC REVIEW OF BOARD MANDATE
The Board will, from time to time, with or without recommendations of the Corporate Governance and Nominating Committee, review and reassess the adequacy of this Board Mandate and consider any proposed changes.
Approved by the Board of Directors
Cymat Technologies Ltd.
March 7, 2011.