ThZeal - The Zeal

DEF 14A 1 imidef14a2005.txt Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12 INDUSTRIAL MINERALS, INC. ------------------------- (Name of Registrant as Specified In Its Charter) Not Applicable -------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 1) Title of each class of securities to which transaction applies: -------------------------------------------------------------------------------- 2) Aggregate number of securities to which transaction applies: -------------------------------------------------------------------------------- 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): -------------------------------------------------------------------------------- 4) Proposed maximum aggregate value of transaction: -------------------------------------------------------------------------------- 1 INDUSTRIAL MINERALS, INC. 2500 One Dundas Street West Toronto, Ontario, Canada M5G 1Z3 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JULY 20, 2005 Notice is hereby given that the Annual Meeting of Shareholders of Industrial Minerals, Inc., (hereinafter referred to as "the Company") will be held at the offices of the Company, located at Suite 2500, One Dundas Street West, Toronto, Ontario M5G 1Z3, at 9:00 a.m., local time, for the following purposes: 1. To elect five directors to hold office until the next annual meeting of shareholders and qualification of their respective successors. 2. To appoint Toski, Schaefer & Co., P.C. of Williamsville, New York as independent auditors for fiscal year ended December 31, 2005. 3. To transact such other business as may properly come before the annual meeting or any postponement of or adjournment thereof. The Board of Directors has fixed the closing of business on June 13, 2005, as the record date for the determination of shareholders entitled to notice of and to vote at this meeting or any adjournment thereof. The stock transfer books will not be closed. The Company's Annual Report to Stockholders for the year ended December 31, 2004 accompanies this Notice of Annual Meeting and Proxy Statement. All stockholders, whether or not they expect to attend the Meeting in person, are requested either to complete, date, sign, and return the enclosed form of proxy to the attention of John Melnyk at the offices of the Company, located at Suite 2500, One Dundas Street West, Toronto, Ontario M5G 1Z3 or to record their proxy by other authorized means. The proxy may be revoked by the person executing the proxy by filing with the Secretary of the Company an instrument of revocation or duly executed proxy bearing a later date, or by electing to vote in person at the meeting. /s/John Melnyk ----------------------- Industrial Minerals, Inc. John Melnyk, CFO 2 PROXY STATEMENT INDUSTRIAL MINERALS, INC. 2500 One Dundas Street West Toronto, Ontario, Canada M5G 1Z3 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JULY 20, 2005 This Proxy Statement is being furnished to the shareholders of INDUSTRIAL MINERALS, INC., a Delaware corporation, in connection with the solicitation by the Board of Directors of proxies to be used at the Annual Meeting of Shareholders to be held at 9:00 a.m., local time, July 20, 2005 at the offices of the Company, located at Suite 2500, One Dundas Street West, Toronto, Ontario M5G 1Z3, at 9:00 a.m.. The Proxy Statement is first being sent or given to shareholders on or about June 20, 2005. PROXIES ARE BEING SOLICITED BY THE BOARD OF DIRECTORS. WE ARE ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED TO SEND US A PROXY. VOTING RIGHTS Stockholders of record of the Company as of the close of business on June 13, 2005 have the right to receive notice of and to vote at the Annual Meeting. On June 13, 2005, the Company had issued an outstanding 111,587,966 shares of Common Stock (the "Common Stock"), the only class of voting securities outstanding. Each share of Common Stock is entitled to one (1) vote for as many separate nominees as there are directors to be elected and for or against all other matters presented. For action to be taken at the Annual Meeting, a majority of the shares entitled to vote must be represented at the Annual Meeting in person or by proxy. Shares of stock may not be voted cumulatively. Abstentions and broker non-votes each will be included in determining the number of shares present and voting at the Annual Meeting. Abstentions will be counted in tabulations of the votes cast on proposals, whereas broker non-votes will not be counted for purposes of determining whether a proposal has been approved. EXPENSE OF MAILING The expense of preparing and mailing of this Proxy Statement to shareholders of the Company is being paid for by the Company. The Company is also requesting brokers, custodians, nominees, and fiduciaries to forward this 3 Proxy Statement to the beneficial owners of the shares of common stock of the Company held of record by such persons. The Company will not reimburse such persons for the cost of forwarding. PROXIES In voting their Common Stock, stockholders may vote in favor of or against the proposal to approve the proposals on the agenda or may abstain from voting. Stockholders should specify their choice on the accompanying proxy card. All properly executed proxy cards delivered pursuant to this solicitation and not revoked will be voted at the meeting in accordance with the directions given. If no specific instruction are given with regard to the matter to be voted upon, then the shares represented by a signed proxy card will be voted "FOR" the approval of the agenda item or director(s) and in the discretion of such proxies to any other procedural matters which may properly come before the meeting or any adjournments thereof. All proxies delivered pursuant to this solicitation are revocable at any time before they are voted at the option of the persons executing them by (i) giving written notice to the Secretary of the Company, (ii) by delivering a later dated proxy card, or (iii) by voting in person at the meeting. All written notices of revocation and other communications with respect to revocations of proxies should be addressed to John Melnyk, CFO, Industrial Minerals, Inc., 2500 One Dundas Street West, Toronto, Ontario, Canada M5G 1Z3. HOLDERS OF COMMON STOCK ARE REQUESTED TO COMPLETE, DATE, AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY TO THE COMPANY AT 2500 ONE DUNDAS STREET WEST, TORONTO, ONTARIO, CANADA M5G 1Z3. The person named as proxy is John Melnyk, a director of the Company. In addition to the solicitation of proxies by mail, the Company, through its directors, officers, and employees, may solicit proxies from stockholders personally or by telephone or other forms of communication. The Company will not reimburse anyone for reasonable out-of-pocket costs and expenses incurred in the solicitation of proxies. The Company also will request brokerage houses, nominees, fiduciaries, and other custodians to forward soliciting materials to beneficial owners, and the Company will reimburse such persons for their reasonable expenses incurred in doing so. All expenses incurred in connection with the solicitation of proxies will be borne by the Company. INTEREST OF PERSONS IN MATTERS TO BE ACTED UPON None. No director or shareholder owning 10% or more of the outstanding shares has indicated her or his intent to oppose any action to be taken at the meeting. No officer or director or shareholder has any interest in any matter to be voted upon. 4 VOTING SECURITIES AND BENEFICIAL OWNERSHIP As of the call date of the meeting, June 13, 2005, the total number of common shares outstanding and entitled to vote was 111,587,966. The holders of such shares are entitled to one vote for each share held on the record date. There is no cumulative voting on any matter on the agenda of this meeting. No additional shares will be issued subsequent to call date and prior to meeting. RECORD DATE Stock transfer records will remain open. June 13, 2005 shall be the record date for determining shareholders entitled to vote and receive notice of the meeting.

(1) Includes Murphy's Investment Corp. and Olympic View Investments, Inc. (beneficially John Melnyk's wife) (2) Includes 150,000 shares through the Bamford Family Trust 5 VOTING REQUIRED FOR APPROVAL A majority of the shares of common stock outstanding at the record date must be represented at the Annual Meeting in person or by proxy in order for a quorum to be present and in order to take action upon all matters to be voted upon, but if a quorum should not be present, the meeting may be adjourned without further notice to shareholders, until a quorum is assembled. Each shareholder will be entitled to cast one vote at the Annual Meeting for each share of common stock registered in such shareholder's name at the record date. Abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum for the transaction of business. Each share of Common Stock entitles the holder thereof to one vote on all matters to come before the Annual Meeting. Holders of shares of Common Stock are not entitled to cumulative voting rights. The favorable vote of a plurality of the votes of the shares of Common Stock present in person or represented by proxy at the Annual Meeting is necessary to elect the nominees for directors of the Company. To take the other actions at the meeting a majority of the shares must vote in favor of the proposals present in person or by Proxy. REMUNERATION AND OTHER TRANSACTIONS WITH MANAGEMENT (a) Cash Compensation. Compensation paid by the Company for all services provided during the year ended December 31, 2004 and year to date June 13, 2005, (1) to each of the Company's executive officers, and (2) to all officers as a group is set forth below under directors.

6 Compensation paid by the Company for all services provided during the period ended December 31, 2004, (1) to each of the Company's directors whose cash compensation exceeded $60,000.00 and (2) to all directors as a group is set forth below: None. (b) Compensation Pursuant to Plans. None. (c) Other Compensation. None. Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR value (None) Long Term Incentive Plans - Awards in Last Fiscal Year (None) BOARD OF DIRECTORS Committees and Meetings The Board held two formal meetings during the fiscal year ended December 31, 2004, conferred by telephone on numerous occasions and took actions by unanimous consent, as necessary. The following committees have been formed as of March 18, 2004 and membership as of June 13, 2005 is as follows: 1) Nominating Committee - Members are Larry Van Tol, Stephen W. Weathers and Thomas S. Bamford. Thomas S. Bamford and Stephen W. Weathers are independent Directors as defined by the Sarbanes-Oxley Act of 2002. Larry Van Tol ceased to be an independent director as of his appointment to the position of CEO on November 12, 2004. 2) Audit Committee - Members are Patrick Rogers and Thomas S. Bamford. Patrick Rogers and Thomas S. Bamford are independent Directors as defined by the Sarbanes-Oxley Act of 2002. 3) Compensation Committee - Members are Stephen W. Weathers and Thomas S. Bamford. All Committee Members are independent Directors as defined by the Sarbanes-Oxley Act of 2002. As the compensation committee was discussing compensation surrounding the appointment of Mr. Van Tol to the position of CEO, Mr. Van Tol resigned from this committee on October 20, 2004. 7 (a) Compensation of Directors

Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR value (None) Long Term Incentive Plans - Awards in Last Fiscal Year (None) As of December 31, 2003, the Company adopted an Integrity and Ethics Policy as filed in an 8K dated January 6, 2004 and which is incorporated herein by reference. 8 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS The Securities and Exchange Commission requires disclosure where an executive officer of a company served or serves as a director or on the compensation committee of an entity other than the Company and an executive officer of such other entity served or serves as a director or on the compensation committee of the Company. The Company does not have any such interlocks. Decisions as to executive compensation are made by the Compensation Committee. Indemnification of Directors and Officers As permitted by the Delaware General Corporation Law, the personal liability of its directors for monetary damages for breach or alleged breach of their duty of care is very limited. In addition, as permitted by the Delaware General Corporation Law, the Bylaws of the Company provide generally that the Company shall indemnify its directors and officers to the fullest extent permitted by Delaware law, including those circumstances in which indemnification would otherwise be discretionary. The Company has agreed to indemnify each of its directors and executive officers to provide the maximum indemnity allowed to directors and executive officers by the Delaware General Corporation Law and the Bylaws, as well as certain additional procedural protections. In addition, the indemnification agreements provide generally that the Company will advance expenses incurred by directors and executive officers in any action or proceeding as to which they may be indemnified. The indemnification provision in the Bylaws, and the indemnification agreements entered into between the Company and its directors and executive officers, may be sufficiently broad to permit indemnification of the officers and directors for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"). Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. ANNUAL REPORT The Company's Annual Report on Form 10-K for the year ended December 31, 2004 (the "Form 10-K") is being furnished simultaneously herewith. The Form 10-K is not considered a part of this Proxy Statement. The Company will also furnish to any stockholder of the Company a copy of any exhibit to the Form 10-K as listed thereon, upon request and upon payment of the Company's reasonable expenses of furnishing such exhibit. Requests should be directed to John Melnyk, CFO, 2500 One Dundas Street West, Toronto, Ontario, Canada M5G 1Z3. 9 BOARD OF DIRECTORS AND OFFICERS The persons listed below are currently Officers and the members of the Board of Directors. Five persons designated with numerals (1), (2), (3), (4) and (5) are nominees for Director for the following term. DIRECTORS AND EXECUTIVE OFFICERS The directors and executive officers of the Company as of June 1, 2005 are as follows: Period of Service As An Officer Or Name Age Position(s) Director ------------------------------------ ------------------------ -------------- Larry Van Tol (1) 61 President & CEO Annual & Director John Melnyk (2) 56 CFO, Secretary/Treasurer Annual & Director Stephen W. Weathers (3) 44 Director Annual Thomas S. Bamford (4) 56 Director Annual Patrick Rogers (5) 59 Director Annual The directors of the Company hold office until the next annual meeting of the shareholders and until their successors have been duly elected and qualified. The officers of the Company are elected at the annual meeting of the Board of Directors and hold office until their successors are chosen and qualified or until their death, resignation, or removal. The Company presently has no executive committee. The principal occupations of each director and officer of the Company for at least the past five years are as follows: MANAGEMENT EXPERIENCE LARRY VAN TOL, age 61, graduated with a Bachleor of Science degree in Business Administration and Economics from the University of Minnesota in 1967. From 1976 to present Mr. Van Tol has been the owner operator of Hilltop Florist and Greenhouse in Mankato, Minnesota. Mr. Van Tol has been a director of Security State Bank in Mankato. He has held this directorship since 1999. Mr. Van Tol is a member of the audit, company policy, compensation, investment and loan approval committees of Security State Bank. Security State bank is privately held and the 3rd largest of Mankato's 28 Banks. Security State bank has one location and $100 million in assets. Mr. Van Tol is also a director of Bancommunity Service Corp. Bancommunity is the privately held holding company of First National Bank of St. Peter, MN and Security State Bank of Mankato. Mr. Van Tol has held this position since 1999. Mr. Van Tol was elected a Director of Industrial Minerals, Inc. on October 24, 2003. JOHN MELNYK, age 56, studied Business Administration and Commerce at the University of Alberta from 1970 to 1974. From 1974 to 1978 he managed a sales territory for McQueen Sales Company, Ltd., a distributor of photographic products. From 1978 to 1982 he was a self-employed sales agent in the photographic industry. In 1982 he purchased an interest in a photo finishing lab which he sold in 1994. From 1994 to present he has been a self-employed business consultant. Mr. Melnyk also served as the President and a director of Murphy's Investment Corp. a privately held Corporation which invests in various ventures. He resigned his position in March 2002. Mr. Melnyk works full time for the Company. 10 STEPHEN W. WEATHERS, age 44, earned his B. S. in Geology from Boise State University. He has worked as an environmental geologist both in the mining industry and oil and gas industry. His duties included permitting, environmental compliance, environmental remediation/reclamation and natural gas asset acquisitions both in the United States and Canada. Mr. Weathers worked for Maxxim Environmental/Terracon from 1997 through 1999 and presently works in the environmental remediation division for a Duke Energy Field Services which is a natural gas processing company (1999-2004). Mr. Weathers previously served as a director of Sun River Mining, Inc. THOMAS S. BAMFORD, age 56, obtained a Bachelor of Science in Geological Engineering from the University of Saskatchewan in 1971, Master of Science (Geology/Geophysics) from the University of Saskatchewan in 1973, and a Masters of Business Administration from the University of Saskatchewan in 1978. Mr. Bamford is a member of the Association of Professional Engineers and Geoscientists of Saskatchewan (APEGS). He became affiliated with APEGS in 1975. Mr. Bamford has held since 1996 an APEGS license to consult. In 1995 Mr. Bamford established and operated a Calgary-based management consulting and database/software development practice with emphasis on the process of analyzing operational and economic performance for the oil and gas industry. Current focus of this consulting practice is to design and organize private financing and structuring for tax-effective and traditional oil and gas investment vehicles in western Canada. Mr. Bamford held the positions of President and CEO (1998-1999) and Chief Financial Officer (1997-1998) of Westlinks Resources Ltd. Mr. Bamford was a director of Westlinks Resources Ltd. from 1997 to 2000. Westlinks Resources Ltd. was an Alberta Stock Exchange traded junior oil and Gas Company, which grew through acquisition, merger and amalgamation. Mr. Bamford began his career in 1975 with Saskatchewan Oil and Gas Corporation (Saskoil) and remained with Saskoil (now Wascana Energy Inc.) through 1995. He participated in various aspects of the technical, operating, administration and financial growth of a start-up, private, oil company (Saskoil) through its transition to a publicly traded senior production company (Wascana Energy). Career development during this period focused on the design and development of new business opportunities, processes, methods and systems as well as providing special project leadership to these initiatives. He held the following positions at Wascana Energy Inc. (formerly askoil), Reserves and Evaluations Engineer (04/1975-09/1977), Educational Leave (09/1977-04/1978), Reservoir Engineer (04/1978-12/1979), Director Planning and Special Projects (01/1980-04/1983), Acting Vice-President, Finance (11/1981-04/1982), Manager, Exploration Geology (04/1983-11/1985), Manager, Business Development (11/1985-06/1987), Manager, Corporate Planning (06/1987-08/1989), Manager, Research (05/1992-04/1994), Manager, Special Projects (05/1992-04/1994) and Manager, Budgets and Reserves, (05/1994-12/1995). Mr. Bamford was appointed a Director of Industrial Minerals, Inc. on October 24, 2003. 11 PATRICK ROGERS, age 59, graduated with a Bachelor of Science degree in Accounting from Mankato State University (now known as Minnesota State University - Mankato) in 1969. From 1969 to 1973 Mr. Rogers served in the United States Air Force and in 1973 returned to Mankato, Minnesota to purchase a one-third interest in a local accounting firm in which he eventually acquired a 100% interest. Mr. Rogers earned his Certified Public Accountant (CPA) designation in 1974 and the Certified Valuation Analyst (CVA) designation granted by the National Association of Certified Valuation Analysts (NACVA) in 1997. Today Mr. Rogers is a tax partner and former board member with the firm of Wolf, Etter and Co., a 100 person Certified Public Accounting firm with 3 offices in Minnesota and a total of 45 Certified Public Accountants on staff. 11 AUDITORS General. Toski, Schaefer, & Co., P.C. ("TSC") was the Company's principal auditing accountant firm for the years ended December 31, 2004 and 2003. The Company's Board of Directors has considered whether the provision of audit services is compatible with maintaining TSC's independence. Audit Fees. The following table sets out fees billed to the Company by TSC. 2004 2003 2002 Audit Fees $12,000 $9,000 $4,000 Audit Related Fees $5,000 $4,800 $4,800 The Company had no audit committee for 2002 and 2003 thus the Board of Directors acted as the audit committee for the years 2002 and 2003. The Board had no "pre-approval policies and procedures" in effect for the auditors' engagement for the audit year 2002 and 2003. The audit committee for the year 2004 recommended TSC for the audit year 2004 and the shareholders at an annual meeting held in Toronto, Ontario, Canada appointed TSC the company's auditors for the 2004 audit year. The auditors' full time employees performed all audit work. All Other Fees. There were no tax fees or other fees in 2002, 2003 or 2004. 12 Proposal #1 NOMINATION AND ELECTION OF DIRECTORS The Company's Bylaws currently provide for the number of directors of the Company to be established by resolution of the Board of Directors and that number is five. The Board has nominated five (5) persons. At this Annual Meeting, a Board of five (5) directors will be elected. Except as set forth below, unless otherwise instructed, the proxy holders will vote the proxies received by them for Management's nominees named below. The five nominees are presently directors of the Company. The term of office of each person elected as a director will continue until the next Annual Meeting of Stockholders, until resignation, or until a successor has been elected and qualified. The proxies solicited hereby cannot be voted for a number of persons greater than the number of nominees named below. The Certificate of Incorporation of the Company does not permit cumulative voting. A plurality of the votes of the holders of the outstanding shares of Common Stock represented at a meeting at which a quorum is presented may elect directors. THE DIRECTORS NOMINATED BY MANAGEMENT ARE: Larry Van Tol John Melnyk Stephen W. Weathers Thomas S. Bamford Patrick Rogers The biographical information of Messrs. Van Tol, Melnyk, Weathers, Bamford and Rogers are contained on pages 10, 11 and 12, under "Management Experience." Unless marked to the contrary on the ballot, all proxies will be voted in favor of the Management's nominees. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" MANAGEMENT'S NOMINEES. Required Approval For action to be taken at the Annual Meeting, a quorum must be present, which, under Delaware General Corporation Laws, is a simple majority. To be considered approved, the nominees must receive the affirmative vote of the holders of a majority of the shares represented and voting at the Annual Meeting. 13 PROPOSAL #2 APPOINTMENT OF TOSKI, SCHAEFER & CO., P.C. Toski, Schaefer, & Co., P.C., Independent Public Accountants, of Williamsville, New York, have been appointed as the Certifying accountants for the period through fiscal year 2005 and shareholders are asked to ratify such appointment. Ratification of the appointment of Toski, Schaefer, & Co., P.C., as the Company's independent public accountants for the fiscal year ending December 31, 2005 will require the affirmative vote of a majority of the shares of Common Stock represented in person or by proxy and entitled to vote at the Annual Meeting. In the event the stockholders do not ratify the appointment of Toski, Schaefer, & Co., P.C. for the forthcoming fiscal year, such appointment will be reconsidered by the Board. Representatives of Toski, Schaefer, & Co., P.C. are not expected to be present at the Annual Meeting and will not make statements. Unless marked to the contrary, proxies received will be voted "FOR" ratification of the appointment of Toski, Schaefer, & Co., P.C. as independent accountants for the Company's year ending December 31, 2005. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE COMPANY'S INDEPENDENT ACCOUNTANTS. SHAREHOLDER PROPOSALS Shareholders are entitled to submit proposals on matter appropriate for shareholder action consistent with regulations of the Securities and Exchange Commission. Should a shareholder intend to present a proposal at next year's annual meeting, it must be received by the secretary of the Company at 2500 One Dundas Street West, Toronto, Ontario, Canada M5G 1Z3, not later than 30 days prior to fiscal year end, in order to be included in the Company's proxy statement and form of proxy relating to that meeting. It is anticipated that the next annual meeting will be held in July, 2006. 14 Other Matters. Management knows of no business that will be presented for consideration at the Annual Meeting other than as stated in the Notice of Annual Meeting. If, however, other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying form of proxy to vote the shares represented thereby on such matters in accordance with their best judgment. Dated: June 13, 2005 By Order of the Board of Directors By:/s/John Melnyk ---------------------------------- John Melnyk, CFO, Secretary/Treasurer and Director 15 BALLOT -------------------------------------------------------------------------------- INDUSTRIAL MINERALS, INC. 2500 One Dundas Street West Toronto, Ontario, Canada M5G 1Z3 PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS, JULY 20, 2005 The undersigned hereby appoints John Melnyk proxy, with full power of substitution, for and in the name or names of the undersigned, to vote all shares of Common Stock of Industrial Minerals, Inc. held of record by the undersigned at the Annual Meeting of Stockholders to be held at the offices of the Company, located at Suite 2500, One Dundas Street West, Toronto, Ontario M5G 1Z3, at 9:00 a.m., local time, and at any adjournment thereof, upon the matters described in the accompanying Notice of Annual Meeting and Proxy Statement, receipt of which is hereby acknowledged, and upon any other business that may properly come before, and matters incident to the conduct of, the meeting or any adjournment thereof. Said person is directed to vote on the matters described in the Notice of Annual Meeting and Proxy Statement as follows, and otherwise in their discretion upon such other business as may properly come before, and matters incident to the conduct of, the meeting and any adjournment thereof. 1. To elect a Board of five (5) directors to hold office until the next annual meeting of stockholders or until their respective successors have been elected and qualified: Nominees: Larry Van Tol, John Melnyk, Stephen W. Weathers, Thomas S. Bamford, and Patrick Rogers [_] FOR: nominees listed above (except as marked to the contrary below). [_] WITHHOLD authority to vote for nominee(s) specified below. INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), write the applicable name(s) in the space provided below. -------------------------------------------------------------------------------- 2. To appoint Toski, Schaefer & Co., P.C. of Williamsville, New York as independent auditors for fiscal year ended December 31, 2005. [_] FOR [_] AGAINST [_] ABSTAIN 3. To transact such other business as may properly come before the Annual Meeting. [_] FOR [_] AGAINST [_] ABSTAIN YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND RETURN THIS PROXY CARD PROMPTLY TO THE COMPANY AT 2500 ONE DUNDAS STREET WEST, TORONTO, ONTARIO, CANADA M5G 1Z3. THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, WILL BE VOTED "FOR" THE STATED PROPOSALS. ---------------------- -------------------------------- Number of Shares owned Signature of Stockholder -------------------------------- Signature if held jointly Dated: __________________________, 2005 IMPORTANT: If shares are jointly owned, both owners should sign. If signing as attorney, executor, administrator, trustee, guardian or other person signing in a representative capacity, please give your full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.