| Committee Charters
MBMI RESOURCES INC.
CHARTER OF THE AUDIT COMMITTEE
This Charter of the Audit Committee (the "Committee") of the Board of Directors (the "Board") of MBMI Resources Inc. (the "Company") was adopted by the Board on January 31, 2005 and amended June 30, 2005.
Role of Audit Committee
The Committee shall assist the Board in fulfilling its responsibility for oversight of the Company's financial accounting and reporting, the system of internal controls established by management, and the adequacy of internal and independent auditing relative to these activities.
Authority to Retain Experts
The Committee shall have the authority to retain outside counsel or other experts as necessary to assist the Committee in fulfilling its responsibilities.
Reporting
The Audit Committee shall report to the Board.
Appointment and Composition
The Committee and its Chair shall be appointed by the Board. The Chair shall be a member of the Committee.
The Committee shall consist of at least three directors, the majority of whom are outside, or nonmanagement, directors, and a majority of whom are unrelated (as that term is used in the report of the TSX Venture Exchange's Committee on Corporate Governance), that is, who are independent of management and are free from any interest and any business or other relationship which could, or might reasonably be perceived to, materially interfere with their ability to act with a view to the best interests of the Company, other than interests and relationships arising from shareholding.
Each of the members of the Committee shall have a working familiarity with basic finance and accounting practices, and shall have experience with reviewing and approving public company financial statements, either as part of management or as a member of a public company's audit committee.
Duties
The Committee shall:
- Provide for an open avenue of communications between the independent auditors, management and the Board and, at least once annually, meet with the independent auditors independently of management.
- Review the qualifications and evaluate the performance of the independent auditors and make recommendations to the Board regarding the selection, fee arrangements, appointment or termination of the independent auditors. The independent auditors shall be ultimately accountable to the Board and the Committee, as representatives of the Shareholders.
- Receive on an annual basis a formal written statement from the independent auditors that they are in fact independent, and discuss with the auditors any relationships that may impact the auditor's independence and recommend to the Board any actions necessary to oversee the auditor's independence.
- Review and approve the independent auditors' annual engagement letter.
- Review with the independent auditors (1) the proposed scope of their examination with emphasis on accounting and financial areas where the Committee, the independent auditors or management believe special attention should be directed, (2) the results of their audit, including their letter of recommendations for management (3) their evaluation of the adequacy of the Company's system of internal controls, (4) significant areas of disagreement, if any, with management (5) cooperation received from management in the conduct of the audit and (6) significant accounting, reporting, regulatory or industry developments affecting the Company.
- Discuss with management and the independent auditors any issues regarding significant business risks or exposures and assess the steps management has taken to minimize such risk.
- Review with management and the independent auditors the Company's unaudited quarterly financial statements and the Company's audited annual financial statements and make a recommendation to the Board as to approval thereof.
- In reviewing the quarterly and annual financial statements, include a review of estimates, reserves, accruals, write-downs, judgmental areas, audit adjustments, difficulties encountered in performing any audit, and such other review as may be appropriate.
- Perform such other functions as assigned by law, the Company's bylaws or as the Board deems necessary and appropriate.
Committee Meetings and Board Reporting
Meetings will be held as required, but not less than quarterly. Minutes will be recorded and reports of committee meetings will be presented at the next regularly scheduled Board meeting.
Committee Charter Review and Approval
This Audit Committee Charter shall be reviewed, reassessed and approved by the Board annually.
Whistleblower Policy
The Audit Committee shall establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by the Company's employees of concerns regarding questionable accounting or auditing matters. A copy of the procedures is attached as Schedule "A".
June 30, 2005
SCHEDULE "A"
To the Audit Committee Charter
Procedures for the Submission of Complaints or Concerns Regarding Accounting, Internal Accounting Controls, Auditing Matters
The Audit Committee of the Board of Directors of MBMI Resources Inc. (the "Company") has established procedures for: (a) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (b) the submission by employees of the Company and others, on a confidential and anonymous basis, of concerns regarding questionable accounting or auditing matters.
In accordance with National Instrument 52-110, the Audit Committee has adopted the following procedures:
- The Company shall promptly forward to the Audit Committee any complaints that it has received regarding financial statement disclosures, accounting, internal accounting controls or auditing matters.
- Any employee of the Company may submit, on a confidential, anonymous basis if the employee so desires, any concerns (the "concern") regarding financial statement disclosures, accounting, internal accounting controls or auditing matters. All such concerns shall be set forth in writing and forwarded in a sealed envelope to the Chairman of the Audit Committee, in care of the Company's Corporate Secretary at:
Cawkell Brodie Glaister LLP
Business Lawyers
1260 -- 1188 West Georgia Street
Vancouver, BC V6E 4A2
Attention: Kenneth A. Cawkell, Corporate Secretary
If an employee would like to discuss the concern with a member of the Audit Committee, the employee should indicate this in the submission and include a telephone number at which he or she might be contacted if the Audit Committee deems it appropriate.
- Following the receipt of any concern submitted hereunder (the "submission"), the Audit Committee will investigate each matter so reported and take such steps, actions or institute such procedures as the Audit Committee deems appropriate.
- The Audit Committee may enlist employees of the Company and/or outside legal, accounting or other advisors, as appropriate, to conduct any investigation of the submission and such other outside advisors shall use reasonable efforts to protect the confidentiality and anonymity of the complainant.
- The Board of Directors stands behind this policy and guarantees that no retaliation of any kind will be taken or permitted to be taken against employees with respect to any submission made in good faith.
- The Audit Committee shall retain the submission and the documentation related thereto as part of the records of the Audit Committee.
AUDIT COMMITTEE
MBMI RESOURCES INC.
Dated June 30 2005
SCHEDULE "A"
To the Audit Committee Charter
Procedures for the Submission of Complaints or Concerns Regarding Accounting, Internal Accounting Controls, Auditing Matters
The Audit Committee of the Board of Directors of MBMI Resources Inc. (the "Company") has established procedures for: (a) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (b) the submission by employees of the Company and others, on a confidential and anonymous basis, of concerns regarding questionable accounting or auditing matters.
In accordance with Multilateral Instrument 52-110, the Audit Committee has adopted the following procedures:
- The Company shall promptly forward to the Audit Committee any complaints that it has received regarding financial statement disclosures, accounting, internal accounting controls or auditing matters.
- Any employee of the Company may submit, on a confidential, anonymous basis if the employee so desires, any concerns (the "concern") regarding financial statement disclosures, accounting, internal accounting controls or auditing matters. All such concerns shall be set forth in writing and forwarded in a sealed envelope to the Chairman of the Audit Committee, in care of the Company's Corporate Secretary at:
Cawkell Brodie Glaister LLP
Business Lawyers
1260 -- 1188 West Georgia Street
Vancouver, BC V6E 4A2
Attention: Kenneth A. Cawkell, Corporate Secretary
If an employee would like to discuss the concern with a member of the Audit Committee, the employee should indicate this in the submission and include a telephone number at which he or she might be contacted if the Audit Committee deems it appropriate.
- Following the receipt of any concern submitted hereunder (the "submission"), the Audit Committee will investigate each matter so reported and take such steps, actions or institute such procedures as the Audit Committee deems appropriate
- The Audit Committee may enlist employees of the Company and/or outside legal, accounting or other advisors, as appropriate, to conduct any investigation of the submission and such other outside advisors shall use reasonable efforts to protect the confidentiality and anonymity of the complainant.
- The Board of Directors stands behind this policy and guarantees that no retaliation of any kind will be taken or permitted to be taken against employees with respect to any submission made in good faith.
- The Audit Committee shall retain the submission and the documentation related thereto as part of the records of the Audit Committee.
AUDIT COMMITTEE
MBMI RESOURCES INC.
Dated June 30 2005
MBMI RESOURCES INC.
CHARTER OF THE CORPORATE GOVERNANCE COMMITTEE
Purposes and Responsibilities
The Corporate Governance Committee shall advise the Board with respect to: (a) Board organization, membership and function; (b) committee structure, membership and operations; (c) succession planning for the executive officers of the Company; (d) the Company's Corporate Governance Policy, its operation and any modifications to such policy; and (e) other matters relating to corporate governance and the rights and interests of the Company's shareholders.
Membership and Qualifications
The Corporate Governance Committee shall consist of three or more members, all of whom are outside, or nonmanagement, directors, and a majority of whom are unrelated directors.
Specific Responsibilities
The Corporate Governance Committee will:
- Assess the directors on an ongoing basis;
- Assess, on at least an annual basis, the effectiveness of the Board as a whole;
- Assess, on at least an annual basis, the size and composition of the Board;
- Where the Committee considers that the Board's size, composition or effectiveness should be enhanced by additional members, identify potential nominees to the Board;
- Assess, on at least an annual basis, the effectiveness of each Committee;
- Advise the Board on all matters relating to corporate governance;
- Adopt its own process by which the Committee shall make its effectiveness assessments;
- Approve procedures designed to provide that adequate orientation and training are provided to new members of the Board; and
- Periodically review and comment on the succession plan put forward by senior management. Consider and recommend to the Board candidates for successor to the Chief Executive Officer of the Company and, with appropriate consideration of the Chief Executive Officer's recommendations, candidates for successors to other executive officers.
In discharging its responsibilities, the Corporate Governance Committee will meet annually and otherwise as required. Minutes will be recorded and reports of Corporate Governance Committee meetings will be presented at the next regularly scheduled Board meeting.
MBMI RESOURCES INC.
CHARTER OF THE COMPENSATION COMMITTEE
Purposes and Responsibilities
The Compensation Committee shall evaluate the compensation of the executive officers of the Company and assure that they are compensated effectively in a manner consistent with the Company's business, stage of development, financial condition and prospects, and the competitive environment. The Committee shall also communicate to the shareholders regarding the Company's compensation policies, as required by the applicable securities regulatory bodies. In addition, the Company shall evaluate and make recommendations to the Board regarding the compensation of the outside directors.
Membership and Qualifications
The Compensation Committee shall consist of three or more members who are outside directors, a majority of whom must be unrelated directors. The Committee members shall be appointed by the Board annually immediately following each annual general meeting of the shareholders of the Company, until the earlier of the next annual general meeting, or their replacement.
Specific Responsibilities
The Compensation Committee will:
- Disclose the Compensation Committee's policies applicable to the Company's executive officers in the manner required by the applicable securities authorities' rules and regulations.
- Annually determine the salary and bonus of each of the Company's executive officers. "Executive Officers" shall include the President, Vice President Corporate Development, Vice President Exploration / Designated Qualified Person, and all Senior Vice Presidents and Vice Presidents.
- Annually review all other forms of compensation of each of the Company's executive officers, including without limitation, car allowances and benefits.
- Grant incentive stock options to purchase common stock of the Company under the stock option plan of the Company.
- Amend and otherwise administer the stock option plan of the Company.
Bonuses shall be performance-based. Performance shall be measured through advances in achieving and furthering the Company's business objectives, and in particular, through advancements in research and development, raising additional capital, and securing strategic alliances to further the Company's research and development or licensing and distribution activities.
In establishing compensation packages for executive officers, the Compensation Committee shall seek to accomplish the following goals:
- to motivate the Company's executive officers to achieve important corporate and personal performance objectives and reward them when such objectives are met;
- to recruit and subsequently retain highly qualified executive officers by offering overall compensation which is competitive with that offered for comparable positions in other mining companies; and
- to align the interests of the Company's executive officers with the long-term interests of shareholders through participation in the Company's incentive stock option plan.
In discharging its responsibilities, the Compensation Committee will meet at least annually, and otherwise as required. Minutes will be recorded and reports of Compensation Committee meetings will be presented at the next regularly scheduled Board meeting.
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