6-K 1 kmagm08.txt KOLA MINING AGM MATERIALS FOR 2008 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of OCTOBER, 2008. Commission File Number: 0-30920 KOLA MINING CORP. -------------------------------------------------------------------------------- (Translation of registrant's name into English) #1305 - 1090 West Georgia Street, Vancouver, British Columbia, V6E 3V7, Canada -------------------------------------------------------------------------------- (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: FORM 20-F [X] FORM 40-F [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _______ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _______ Indicate by check mark whether the registrant by furnishing the information contained in this Form, is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. YES [ ] NO [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3- 2(b): 82-_____________ SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned, thereunto duly authorized. KOLA MINING CORP. ------------------------------------- Date: October 31, 2008 /s/ Cary Pinkowski ------------------------------ ------------------------------------- Cary Pinkowski, Chairman KOLA MINING CORP. 2008 ANNUAL NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS GENERAL INFORMATION CIRCULAR MEETING PLACE: SUITE 598 999 CANADA PLACE VANCOUVER, BRITISH COLUMBIA TIME: 10:00 A.M. (PACIFIC TIME) DATE: THURSDAY, NOVEMBER 20, 2008 KOLA MINING CORP. NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS NOTICE IS HEREBY GIVEN that the annual general meeting (the "Meeting") of the shareholders (the "Shareholders") of Kola Mining Corp. (the "Company") will be held at Suite 598, 999 Canada Place, Vancouver, British Columbia, on Thursday, November 20, 2008 at 10:00 a.m. (Pacific Time), for the following purposes: 1. To receive the audited consolidated financial statements of the Company for the fiscal year ended May 31, 2008, together with the auditors report thereon; 2. To determine the number of Directors at seven; 3. To elect Directors; 4. To appoint Auditors and to authorize the Directors to fix their remuneration; 5. To consider and, if thought fit, pass with or without amendment, an ordinary resolution to approve an amendment to the Company's Stock Option Plan to increase the number of shares issuable on the exercise of options under the Plan from 10,777,000 shares to 17,600,800 shares, details of which are set out in the attached Information Circular; and 6. To transact such other business as may properly come before the Meeting. Accompanying this Notice of Meeting is a Management Information Circular, a Form of Proxy and an Annual Request for Financial Statements Form. The accompanying Management Information Circular provides information relating to the matters to be addressed at the Meeting and is incorporated into this Notice. Only Shareholders of record on October 15, 2008 are entitled to receive notice of and vote at the Meeting. Shareholders are entitled to vote at the Meeting either in person or by proxy. Those Shareholders who are unable to attend the Meeting are requested to read, complete, sign, date and return the enclosed form of Proxy in accordance with the instructions set out in the Proxy and in the Information Circular accompanying this Notice. Please advise the Company of any change in your mailing address. DATED at Vancouver, British Columbia, this 15th day of October, 2008. BY ORDER OF THE BOARD /s/ NICK DEMARE Nick DeMare Director and Chief Financial Officer KOLA MINING CORP. (THE "COMPANY") SUITE 598 - 999 CANADA PLACE VANCOUVER, BRITISH COLUMBIA CANADA V6C 3E1 INFORMATION CIRCULAR (Containing information as at October 15, 2008 unless indicated otherwise) SOLICITATION OF PROXIES THIS INFORMATION CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES BY THE MANAGEMENT OF THE COMPANY FOR USE AT THE ANNUAL GENERAL MEETING OF SHAREHOLDERS OF THE COMPANY (AND ANY ADJOURNMENT THEREOF) (THE "MEETING") TO BE HELD ON THURSDAY, NOVEMBER 20, 2008 AT THE TIME AND PLACE AND FOR THE PURPOSES SET FORTH IN THE ACCOMPANYING NOTICE OF MEETING. While it is expected that the solicitation will be primarily by mail, proxies may be solicited personally or by telephone by the regular employees of the Company at nominal cost. All costs of solicitation by management will be borne by the Company. THE CONTENTS AND THE SENDING OF THIS INFORMATION CIRCULAR HAVE BEEN APPROVED BY THE DIRECTORS OF THE COMPANY. APPOINTMENT AND REVOCATION OF PROXIES The individuals named in the accompanying form of proxy are Directors and/or Officers of the Company. A SHAREHOLDER WISHING TO APPOINT SOME OTHER PERSON (WHO NEED NOT BE A SHAREHOLDER) TO REPRESENT HIM AT THE MEETING HAS THE RIGHT TO DO SO, EITHER BY STRIKING OUT THE NAMES OF THOSE PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY AND INSERTING THE DESIRED PERSON'S NAME IN THE BLANK SPACE PROVIDED IN THE FORM OF PROXY OR BY COMPLETING ANOTHER FORM OF PROXY. A proxy will not be valid unless the completed form of proxy is received by Computershare Investor Services Inc., Attention: Proxy Department, 9th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, or by fax at 1-866-249-7775 (the "Transfer Agent"), not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time for holding the Meeting or any adjournment thereof, or delivered to the Chairman of the Meeting prior to the commencement of the Meeting. A shareholder who has given a proxy may revoke it by an instrument in writing executed by the shareholder or by his attorney authorized in writing or, where the shareholder is a corporation, by a duly authorized officer or attorney of the corporation, and delivered to the registered and records office of the Company, at Suite 300, 576 Seymour Street, Vancouver, British Columbia, V6B 3K1, at any time up to and including the last business day preceding the day of the Meeting or if adjourned, any reconvening thereof, or to the Chairman of the Meeting on the day of the Meeting or, if adjourned, any reconvening thereof or in any other manner provided by law. A revocation of a proxy does not affect any matter on which a vote has been taken prior to the revocation. ADVICE TO BENEFICIAL SHAREHOLDERS ONLY REGISTERED SHAREHOLDERS OR DULY APPOINTED PROXYHOLDERS ARE PERMITTED TO VOTE AT THE MEETING. SHAREHOLDERS WHO DO NOT HOLD THEIR SHARES IN THEIR OWN NAME (REFERRED TO HEREIN AS "BENEFICIAL SHAREHOLDERS") ARE ADVISED THAT ONLY PROXIES FROM SHAREHOLDERS OF RECORD CAN BE RECOGNIZED AND VOTED AT THE MEETING. Beneficial Shareholders who complete and return an instrument of proxy must - 2 - indicate thereon the person (usually a brokerage house) who holds their shares as a registered Shareholder. Every intermediary (broker) has its own mailing procedure, and provides its own return instructions, which should be carefully followed. The instrument of proxy supplied to Beneficial Shareholders is identical to that provided to registered Shareholders. However, its purpose is limited to instructing the registered Shareholder how to vote on behalf of the beneficial Shareholder. If 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 such Shareholder's name on the records of the Company. Such shares will more likely be registered under the name 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 Depository for Securities, which company acts as nominee for many Canadian brokerage firms). Common shares held by brokers or their nominees can only be voted (for or against resolutions) upon the instructions of the Beneficial Shareholder. Without specific instructions, brokers/nominees are prohibited from voting shares for their clients. The directors and officers of the Company do not know for whose benefit the common shares registered in the name of CDS & Co. are held. In accordance with National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer, the Company has distributed copies of the Notice of Meeting, this Information Circular and the Proxy to the clearing agencies and intermediaries for onward distribution to Beneficial Shareholders. Applicable regulatory policy requires intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of Shareholders' meetings unless the Beneficial Shareholders has waived the right to receive meeting materials. Every intermediary/broker has its own mailing procedures and provides its own return instructions, which should be carefully followed by Beneficial Shareholders in order to ensure that their common shares are voted at the Meeting. Often the form of proxy supplied to a Beneficial Shareholder by its broker is identical to the form of proxy provided by the Company to the registered Shareholders. However, its purpose is limited to instructing the registered Shareholder how to vote on behalf of the Beneficial Shareholder should a beneficial Shareholder receiving such a form wish to vote at the Meeting, the beneficial Shareholder should strike out the names of the Management Proxyholders named in the form and insert the beneficial Shareholder's name in the blank provided and return the materials to the broker as directed. The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge Investor Communication Solutions, Canada ("Broadridge"), formerly Independent ADP Investor Communications Services. Broadridge typically applies a special sticker to the proxy forms, mails those forms to the Beneficial Shareholders and asks Beneficial Shareholders to return the proxy forms to Broadridge. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of common shares to be represented at the Meeting. A BENEFICIAL SHAREHOLDER RECEIVING A PROXY WITH AN BROADRIDGE STICKER ON IT CANNOT USE THAT PROXY TO VOTE COMMON SHARES DIRECTLY AT THE MEETING - THE PROXY MUST BE RETURNED TO BROADRIDGE WELL IN ADVANCE OF THE MEETING IN ORDER TO HAVE THE COMMON SHARES VOTED. All references to Shareholders in this Information Circular and the accompanying Instrument of Proxy and Notice of Meeting are to Shareholders of record unless specifically stated otherwise. VOTING OF PROXIES Shares represented by properly executed proxies in favour of persons designated in the enclosed form of proxy WILL BE VOTED FOR ALL MATTERS TO BE VOTED ON AT THE MEETING AS SET OUT IN THIS INFORMATION CIRCULAR OR WITHHELD FROM VOTING IF SO INDICATED ON THE FORM OF PROXY. The shares represented by proxies will, on any poll where a choice with respect to any matter to be acted upon has been specified in the form of proxy, be voted in accordance with the specification made. SUCH SHARES WILL ON A POLL BE VOTED IN FAVOUR OF EACH MATTER FOR WHICH NO CHOICE HAS BEEN SPECIFIED BY THE SHAREHOLDER. The enclosed form of proxy when properly completed and delivered and not revoked confers discretionary authority upon the person appointed proxy thereunder to vote with respect to amendments or variations of matters identified in the Notice of Meeting, and with respect to other matters which may properly come before the Meeting. In the event that amendments or variations to matters identified in the Notice of Meeting are properly brought before the Meeting or - 3 - any further or other business is properly brought before the Meeting, it is the intention of the persons designated in the enclosed form of proxy to vote in accordance with their best judgement on such matters or business. At the time of the printing of this Information Circular, the management of the Company knows of no such amendment, variation or other matter which may be presented to the Meeting. VOTING SHARES AND PRINCIPAL HOLDERS THEREOF Issued and Outstanding: 88,004,125 common shares without par value Authorized Capital: unlimited common shares without par value Only shareholders of record at the close of business on October 15, 2008 (the "Record Date") who either personally attend the Meeting or who have completed and delivered a form of proxy in the manner and subject to the provisions described above shall be entitled to vote or to have their shares voted at the Meeting. Each shareholder is entitled to one vote for each common share registered in his name on the list of shareholders, which is available for inspection during normal business hours at the Transfer Agent and at the Meeting. To the knowledge of the directors and officers of the Company, the only person who or corporation which beneficially own, directly or indirectly, or exercise control or direction over shares carrying more than 10% of the votes rights attached to shares of the Company, the approximate number of the shares so owned, controlled or directed by such person, and the percentage of voting shares of the Company represented by such shares at October 15, 2008 is as follows: -------------------------------------------------------------------------------- SHAREHOLDER NUMBER OF PERCENTAGE OF NAME AND ADDRESS SHARES HELD ISSUED SHARES -------------------------------------------------------------------------------- Stargate Solutions Ltd. 9,093,750(1) 10.33%(1) British Virgin Islands -------------------------------------------------------------------------------- (1) The Company has been advised that control of these shares is spread between the shareholders of this company such that no one person will control more than 34% of these shares. APPOINTMENT OF AUDITORS Unless such authority is withheld, the persons named in the accompanying proxy intend to vote for the appointment of Davidson & Company LLP, Chartered Accountants, as auditors of the Company and to authorize the directors to fix their remuneration. Davidson & Company was first appointed on November 25, 2005. ELECTION OF DIRECTORS The Board of Directors presently consists of eight directors and it is intended to determine the number of directors at seven and to elect seven directors for the ensuing year. The term of office of each of the present directors expires at the Meeting. The persons named below will be presented for election at the Meeting as management's nominees and the persons named in the accompanying form of proxy intend to vote for the election of these nominees. Management does not contemplate that any of these nominees will be unable to serve as a director. Each director elected will hold office until his/her successor is elected or appointed, unless his/her office is earlier vacated in accordance with the Articles of the Company, or with the provisions of the BUSINESS CORPORATIONS ACT (British Columbia). Management proposes that the number of directors for the Company be determined at seven for the ensuing year subject to such increases as may be permitted by the Articles of the Company. In the following table and notes thereto is stated the name of each person proposed to be nominated by management for election as a director, the country in which he/she is ordinarily resident, all offices of the Company now held by him/her, his/her principal occupation, the period of time for which he/she has - 4 - been a director of the Company, and the number of shares of the Company beneficially owned by him/her, directly or indirectly, or over which he/she exercises control or direction, as at the date hereof.
---------------------------------------------------------------------------------------------------------------------------- NUMBER OF SHARES BENEFICIALLY OWNED, DIRECTLY OR INDIRECTLY, OR OVER NAME, PROVINCE AND PRINCIPAL OCCUPATION AND, IF NOT PREVIOUS WHICH CONTROL OR COUNTRY OF RESIDENCE AT PRESENT AN ELECTED DIRECTOR, SERVICE DIRECTION IS AND POSITION(1) OCCUPATION DURING THE PAST 5 YEARS(1) AS A DIRECTOR EXERCISED(2) ---------------------------------------------------------------------------------------------------------------------------- IGOR KOVARSKY President and CEO of the Company from June 1, May 05/08 Nil British Columbia, Canada 2008 to present. Prior to joining Kola Mining, Mr. Kovarsky worked with Centerra President, Chief Executive Gold Inc. and its predecessor Cameco Gold Officer and Director since 1992. There he served in various roles including Director and Vice President, Government Affairs & Business Development for Centerra's subsidiaries in Kyrgyzstan, Mongolia and its head office in Toronto. ---------------------------------------------------------------------------------------------------------------------------- CARY PINKOWSKI Independent Business Advisor. Sep.14/05 3,691,548 British Columbia, Canada Chairman and Director ---------------------------------------------------------------------------------------------------------------------------- NICK DEMARE(3) Chartered Accountant. President of Chase Oct.07/02 246,056 British Columbia, Canada Management Ltd. Chief Financial Officer and Director ---------------------------------------------------------------------------------------------------------------------------- DOUGLAS S. TURNBULL President Lakehead Geological Services Inc. Sep.14/05 1,595,100 British Columbia, Canada from January 1990 to present. Director ---------------------------------------------------------------------------------------------------------------------------- OLEG KIM General Director Bulakashu Mining Company Sep.14/05 850,000 Bishkek, Kyrgyz Republic Ltd. from June 2004 to present. Director ---------------------------------------------------------------------------------------------------------------------------- GRIGORY A. ALEKSENKO(3) Managing partner and co-founder of AGA Jul.24/07 Nil Moscow, Russia Management Ltd., a leading, Moscow based consulting company specializing in Russian Director financial and M&A markets. Capital. ---------------------------------------------------------------------------------------------------------------------------- BRIAN MCEWEN(3) Professional Geoscientist. President of Aug.04/07 Nil Alberta, Canada Buffalo Gold Ltd. and Dynasty Gold Corp. Director ----------------------------------------------------------------------------------------------------------------------------
- 5 - NOTES: (1) The information as to country of residence and principal occupation, not being within the knowledge of the Company, has been furnished by the respective Directors individually. (2) The information as to common shares beneficially owned or over which a Director exercises control or direction, not being within the knowledge of the Company, has been furnished by the respective directors individually. (3) Denotes member of Audit Committee. STATEMENT OF EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE "Named Executive Officer" means each Chief Executive Officer ("CEO") and each Chief Financial Officer ("CFO") of the Company, regardless of the amount of compensation of that individual, and each of the Company's three most highly compensated executive officers, other than the CEO and CFO, who were serving as executive officers at the end of the most recently completed financial year and whose total salary and bonus exceeds $150,000. In addition, disclosure is also required for any individual whose total salary and bonus during the most recent completed year exceeds $150,000, whether or not they were an executive officer at the end of the most recent fiscal year. During the financial year ended May 31, 2008, the Company had three Named Executive Officers, Mr. Douglas Turnbull, the Company's former President and CEO, Mr. Cary Pinkowski, the Company's former President and CEO, and Mr. Nick DeMare, the Company's CFO. The following table sets forth all annual and long-term compensation awarded, paid to or earned by the Company's Named Executive Officers during the financial years ended May 31, 2006, 2007 and 2008.
------------------------------ -------------------------------------- ANNUAL COMPENSATION LONG TERM COMPENSATION ------------------------------ -------------------------------------- AWARDS PAYOUTS ---------------------------- ------- RESTRICTED OTHER SECURITIES SHARES OR ALL ---------------------- ----- ANNUAL UNDER RESTRICTED OTHER NAME AND COMPEN- OPTIONS/SARS SHARE LTIP COMPEN- PRINCIPAL POSITION YEAR(1) SALARY BONUS SATION GRANTED UNITS PAYOUTS SATION ($) ($) ($) (#)(2) ($) ($) ($) ---------------------- ----- ------------------------------ ---------------------------- -------- -------- Douglas Turnbull(3)(4) 2008 139,300(5) nil nil 300,000/nil n/a n/a nil former President 2007 82,975(5) nil nil nil/nil n/a n/a 14,776(6) & CEO 2006 61,025(5) nil nil 300,000/nil n/a n/a nil ---------------------- ----- ------------------------------ ---------------------------- -------- -------- Cary Pinkowki(4) 2008 25,000 nil nil 525,000 n/a n/a 40,000(7) former President 2007 n/a n/a n/a n/a n/a n/a n/a & CEO 2006 n/a n/a n/a n/a n/a n/a n/a ---------------------- ----- ------------------------------ ---------------------------- -------- -------- Nick DeMare(3) 2008 nil nil nil 100,000/nil n/a n/a 81,000(8) CFO 2007 nil nil nil 40,000/nil n/a n/a 76,850(8) 2006 nil nil nil 300,000(9)/nil n/a n/a 86,458(8) ---------------------- ----- ------------------------------ ---------------------------- -------- --------
NOTES: (1) FISCAL YEAR ENDED MAY 31. (2) REPRESENTS STOCK OPTIONS GRANTED DURING A PARTICULAR YEAR. SEE "OPTIONS AND OTHER RIGHTS TO ACQUIRE SECURITIES". (3) ON SEPTEMBER 14, 2005, MR. DEMARE RESIGNED AS PRESIDENT AND CEO OF THE COMPANY. MR. DOUGLAS TURNBULL WAS APPOINTED AS PRESIDENT AND CEO TO FILL THE VACANCY. (4) ON MARCH 11, 2008, MR. TURNBULL RESIGNED AS PRESIDENT AND CEO OF THE COMPANY AND MR. PINKOWSKI, THE CHAIRMAN OF THE COMPANY, WAS APPOINTED AS PRESIDENT AND CEO OF THE COMPANY TO FILL THE VACANCY. ON JUNE 1, 2008, MR. - 6 - PINKOWSKI RESIGNED AS THE PRESIDENT AND CEO OF THE COMPANY AND MR. KOVARSKY WAS APPOINTED AS THE PRESIDENT AND CEO OF THE COMPANY TO FILL THE VACANCY. (5) BILLED BY LAKEHEAD GEOLOGICAL SERVICES INC., A PRIVATE CORPORATION OWNED BY MR. DOUGLAS TURNBULL, FOR SERVICES PROVIDED BY MR. TURNBULL. (6) BILLED BY COLOURWORKS PRESENTATION INC., A PRIVATE CORPORATION OWNED BY THE SPOUSE OF MR. TURNBULL, FOR PROFESSIONAL SERVICES. (7) BILLED BY GP CAPITAL GROUP LTD., A PRIVATE CORPORATION OWNED BY MR. PINKOWSKY, FOR PROFESSIONAL SERVICES RENDERED. (8) PAID TO CHASE MANAGEMENT LTD. ("CHASE"), A PRIVATE CORPORATION OWNED BY MR. NICK DEMARE. CHASE PERSONNEL PROVIDES ACCOUNTING, PROFESSIONAL, SECRETARIAL AND ADMINISTRATIVE SERVICES TO THE COMPANY. SEE ALSO "MANAGEMENT CONTRACTS". (9) INCLUDES 25,000 STOCK OPTIONS GRANTED TO CHASE. LONG TERM INCENTIVE PLAN AWARDS - AWARD IN MOST RECENTLY COMPLETED FINANCIAL YEAR The Company has no long-term incentive plans in place and therefore there were no awards made under any long-term incentive plan to the Name Executive Officers during the Company's most recently completed financial year. A "Long-Term Incentive Plan" is a plan under which awards are made based on performance over a period longer than one financial year, other than a plan for options, SARs (stock appreciation rights) or restricted share compensation. OPTIONS AND SHARE APPRECIATION RIGHTS The following table sets forth stock options granted by the Company during the financial year ended May 31, 2008 to the Named Executive Officers of the Company:
---------------------------------------------------------------------------------------------------------------------- % OF TOTAL MARKET VALUE OF SECURITIES OPTIONS GRANTED EXERCISE OR SECURITIES UNDERLYING UNDER OPTIONS IN FINANCIAL BASE PRICE(2) OPTIONS ON DATE OF GRANT EXPIRATION NAME GRANTED (#) YEAR(1) ($/SECURITY) ($/SECURITY) DATE ---------------------------------------------------------------------------------------------------------------------- Douglas Turnbull 300,000 9.82% 1.20 1.20 Oct. 26/12 ---------------------------------------------------------------------------------------------------------------------- Cary Pinkowski 200,000 6.55% 1.71 1.71 May 18/12 325,000 10.64% 1.20 1.20 Oct. 26/12 ------- ----- 525,000 17.19% ======= ===== ---------------------------------------------------------------------------------------------------------------------- Nick DeMare 100,000 3.27% 1.20 1.20 Oct. 26/12 ----------------------------------------------------------------------------------------------------------------------
NOTES: (1) PERCENTAGE OF ALL STOCK OPTIONS GRANTED DURING THE FINANCIAL YEAR. (2) THE EXERCISE PRICE OF STOCK OPTIONS WAS SET ACCORDINGLY TO THE RULES OF THE TSX VENTURE. THE EXERCISE PRICE OF STOCK OPTIONS MAY ONLY BE ADJUSTED IN THE EVENT THAT SPECIFIED EVENTS CAUSE DILUTION OF THE COMPANY'S SHARE CAPITAL. The following table sets forth details of all exercises of stock options during the financial year ended May 31, 2008 by the Named Executive Officers, and the financial year end value of unexercised options:
---------------------------------------------------------------------------------------------------------------------- VALUE OF UNEXERCISED IN UNEXERCISED THE MONEY OPTIONS AT SECURITIES OPTIONS/SARS AT FINANCIAL YEAR-END(1) ACQUIRED ON AGGREGATE VALUE FINANCIAL YEAR-END EXERCISABLE/ NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE UNEXERCISABLE (#) ($) (#) ($) ---------------------------------------------------------------------------------------------------------------------- Douglas Turnbull nil n/a 600,000/n/a 30,000/n/a ---------------------------------------------------------------------------------------------------------------------- Cary Pinkowski nil n/a 925,000/n/a 40,000/n/a ---------------------------------------------------------------------------------------------------------------------- Nick DeMare nil n/a 440,000(2)/n/a 30,000/n/a ----------------------------------------------------------------------------------------------------------------------
- 7 - NOTES: (1) THE CLOSING PRICE OF THE COMPANY'S COMMON SHARES ON MAY 31, 2008 WAS $0.30. (2) INCLUDES 25,000 OPTIONS GRANTED TO CHASE. TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITIES AND EMPLOYMENT CONTRACTS The Company does not have any compensatory plan(s), contract(s) or arrangement(s) with respect to the resignation, retirement or any other termination of the Named Executive Officers' employment, a change of control of the Company or a change in the Named Executive Officers' responsibilities following a change in control, which entitle a Named Executive Officer to receive from the Company an amount, including all period payments or installments, exceeding $100,000. COMPENSATION OF DIRECTORS CASH COMPENSATION During the financial year ended May 31, 2008, the Company paid US$48,454 salaries and $41,526 for professional fees to Mr. Oleg Kim, a director who is not a Named Executive Officer of the Company. NON-CASH COMPENSATION The following table sets forth stock options granted by the Company during the financial year ended May 31, 2008 to the current and former directors who are not the Named Executive Officers of the Company:
-------------------------------------------------------------------------------------------------------------------- % OF TOTAL MARKET VALUE OF SECURITIES OPTIONS/SARS SECURITIES UNDER GRANTED TO UNDERLYING OPTIONS/SARS EMPLOYEES IN EXERCISE OR OPTIONS/SARS ON EXPIRATION NAME GRANTED FINANCIAL YEAR BASE PRICE THE DATE OF GRANT DATE (#) (%) ($/SECURITY) ($/SECURITY) -------------------- ------------ ------------- ------------ ----------------- ---------- 99,000 7.89% 1.65 1.06 Jun. 12/10 Directors as a group 500,000 16.37% 1.20 0.96 Jul. 24/12 who are not the Named 100,000 3.27% 1.20 1.20 Aug. 04/12 Executive Officers 350,000 11.46% 1.20 1.20 Oct. 26/12 ------- ----- 950,000 31.10% ======= ===== --------------------------------------------------------------------------------------------------------------------
The following table sets forth details of all exercises of stock options during the financial year ended May 31, 2008 by the current and former directors who are not the Named Executive Officers, and the financial year end value of unexercised options:
----------------------------------------------------------------------------------------------------------------------- VALUE OF UNEXERCISED IN UNEXERCISED THE MONEY OPTIONS AT SECURITIES OPTIONS/SARS AT FINANCIAL YEAR-END (1) ACQUIRED ON AGGREGATE FINANCIAL YEAR-END EXERCISABLE/ NAME EXERCISE VALUE REALIZED EXERCISABLE/UNEXERCISABLE UNEXERCISABLE (#) ($) (#) ($) ----------------------------------------------------------------------------------------------------------------------- Directors, as a group, who are not the Named nil n/a 1,275,000/n/a 27,500/n/a Executive Officers -----------------------------------------------------------------------------------------------------------------------
NOTE: (1) THE CLOSING PRICE OF THE COMPANY'S COMMON SHARES ON MAY 31, 2008 WAS $0.30. - 8 - SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The following table sets out, as of the end of the Company's financial year ended May 31, 2008, all information required with respect to compensation plans under which equity securities of the Company are authorized for issuance:
---------------------------------------------------------------------------------------------------------------------- NUMBER OF SECURITIES REMAINING NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE AVAILABLE FOR FUTURE ISSUANCE ISSUED UPON EXERCISE OF EXERCISE PRICE OF UNDER EQUITY COMPENSATION PLANS OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES WARRANTS AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN (a)) ---------------------------------------------------------------------------------------------------------------------- Plan Category (a) (b) (c) ---------------------------------------------------------------------------------------------------------------------- Equity compensation plans 6,175,000(1) 0.79 See Note (1) approved by securityholders ---------------------------------------------------------------------------------------------------------------------- Equity compensation plans not approved by securityholders n/a n/a n/a ---------------------------------------------------------------------------------------------------------------------- Total 6,175,000 0.79 See Note (1) ----------------------------------------------------------------------------------------------------------------------
NOTE: (1) THE COMPANY CURRENTLY HAS IN PLACE A FIXED STOCK OPTION PLAN (THE "PLAN") WHEREBY THE MAXIMUM NUMBER OF COMMON SHARES THAT MAY BE RESERVED FOR ISSUANCE PURSUANT TO THE PLAN WAS SET AT 10,777,000 SHARES, BEING 20% OF THE ISSUED SHARES OF THE COMPANY ON OR ABOUT THE DATE THE PLAN WAS APPROVED BY SHAREHOLDERS, AND 1,502,000 OPTIONS REMAIN AVAILABLE FOR GRANT UNDER THE PLAN AS SO APPROVED. SEE ALSO "PARTICULARS OF OTHER MATTERS TO BE ACTED UPON - A. AMENDMENT OF STOCK OPTION PLAN". INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS At no time during the Company's last completed financial year, was any director, executive officer or senior officer of the Company, proposed management nominee for election as a director or each associate or affiliate of any such director, executive or senior officer or proposed nominee is or has been indebted to the Company or any of its subsidiaries or is and has been indebted to another entity where such indebtedness is or has been the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or any of its subsidiaries, other than routine indebtedness. INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS Other than as described in this Information Circular, the Company has not acquired assets or services from any insider, promoter or member of management of the Company, or their respective associates or affiliates, during the preceding fiscal year. Other than as set forth above or elsewhere in this Information Circular and other than transactions carried out in the ordinary course of business of the Company or any of its subsidiaries, none of the Directors or senior officers of the Company, a proposed management nominee for election as a Director, any Shareholder beneficially owning Common Shares carrying more than 10% of the voting rights attached to the common shares nor an Associate or affiliate of any of the foregoing persons had since June 1, 2007 (being the commencement of the Company's last completed financial year) any material interest, direct or indirect, in any transactions which materially affected or would materially affect the Company or any of its subsidiaries, other than as disclosed in a prior information circular or as disclosed in this information circular. - 9 - MANAGEMENT CONTRACTS KOVARSKY EMPLOYMENT AGREEMENT Pursuant to an employment agreement (the "Kovarsky Agreement'), the Company has retained Igor Kovarsky as an employee of the Company in the capacity as the President and CEO of the Company. The term of the Kovarsky Agreement is for a period of five years, commencing June 1, 2008 and terminating on May 31, 2013, subject to earlier termination in accordance with the Kovarsky Agreement. The Kovarsky Agreement may be extended by the consent of both parties for additional terms of five years at the end of the initial term of the agreement. Pursuant to the terms of the Kovarsky Agreement, Mr. Kovarsky shall devote his full time to the Company's business at a remuneration of $20,000 per month, plus benefits and insurance. The Kovarsky Agreement also required the Company to grant to Mr. Kovarsky stock options to purchase 1,000,000 common shares of the Company. On July 24, 2008, the Company granted Mr. Kovarsky stock options to purchase 1,000,000 common shares of the Company at a price of $0.36 per share, expiring July 24, 2013. Pursuant to the Kovarsky Agreement, in the event that Mr. Kovarsky's employment is terminated by the Company without cause or in the event of a constructive dismissal of Mr. Kovarsky (which would be deemed to occur in certain circumstances on a change of control of the Company), the Company must pay Mr. Kovarsky a lump sum equal to six months salary. CHASE AGREEMENT The Company has a management contract with Chase Management Ltd. ("Chase"), a company owned by Mr. Nick DeMare, whereby the Company is paying Chase $3,000 per month for accounting, professional, management and administrative services provided to the Company. In addition, the Company may engage Chase to perform extra services in which case Chase will charge the Company for its employees at competitive rates. The Company is also paying Chase $2,000 per month for the services of Mr. DeMare in his capacity as CFO of the Company. During the financial year ended May 31, 2008, the Company has been billed a total of $81,000 by Chase for the services of Mr. DeMare and Chase personnel. INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON Other than as set forth in this Information Circular, no person who has been a Director or senior officer of the Company at any time since the beginning of the last financial year, nor any proposed nominee for election as a Director, nor any Associate or affiliate of any of the foregoing, has any material interest, directly or indirectly, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon other than the election of Directors or the appointment of auditors. Directors and senior officers may, however, be interested in the increase in the number of options that may be granted by the Company's Board of Directors with respect to "Amendment of Stock Option Plan", and certain directors and senior officers are interested in the approval of options granted to them in "Approval of Certain Stock Options Previously Granted", both as referred to under "Particulars of Matters to be Acted Upon". DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES Effective June 30, 2005, NATIONAL INSTRUMENT 58-101 - DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES ("NI 58-101") was adopted by the Canadian Securities Administrators. NI 58-101 requires issuers to disclose their governance practices in accordance with that instrument. The Company is a "venture issuer" within the meaning of NI 58-101. A discussion of the Company's governance practices within the context of NI 58-101 is set out below: - 10 - BOARD OF DIRECTORS The Company has three independent directors, namely: Messrs. Grigory A. Aleksenko, Brian McEwen and Leonid Oparin. The Company has four directors who are not independent because they are executive officers of the Company, namely: Mr. Igor Kovarsky, President and CEO, Mr. Cary Pinkowski, Chairman, Mr. Nick DeMare, CFO and Oleg Kim, Vice President of Operations. In addition, Mr. Douglas Turnbull is considered to be not independent under NI 58-101 because he was the President and CEO of the Company until March 11, 2008. DIRECTORSHIPS As of the date of this information circular, three of the directors of the Company are also serving as directors of other reporting issuers, details of which are as follows: NICK DEMARE: Aguila American Resources Ltd., Andean American Mining Corp., Astral Mining Corporation, Atlas Minerals Inc., Ausex Capital Corp., Enterprise Oil Limited, GeoPetro Resources Company, GGL Diamond Corp., Golden Peaks Resources Ltd., Halo Resources Ltd., Lariat Energy Ltd., Lumex Capital Corp., Mawson Resources Limited, Mirasol Resources Ltd., Rochester Resources Ltd., Salazar Resources Limited, Sinchao Metals Corp., Tinka Resources Limited and Tumi Resources Limited DOUGLAS TURNBULL: Buffalo Gold Ltd., Grizzly Diamonds Ltd. and Oromin Explorations Ltd. BRIAN MCEWEN: Buffalo Gold Ltd., Dynasty Gold Corp. and Kinbauri Gold Corp. ORIENTATION AND CONTINUING EDUCATION The CEO and/or the CFO are responsible for providing an orientation for new directors. Director orientation and on-going training will include presentations by senior management to familiarize directors with the Company's strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its principal officers and its internal and independent auditors. ETHICAL BUSINESS CONDUCT The Company does not have a written code of ethical business conduct for its directors, officers and employees. Each director, officer and employee is expected to comply with relevant corporate and securities laws and, where applicable, the terms of their employment agreements. NOMINATION OF DIRECTORS When a board vacancy occurs or is contemplated, any director may make recommendations to the board as to qualified individuals for nomination to the board. In identifying new candidates, the directors will take into account the mix of director characteristics and diverse experiences, perspectives and skills appropriate for the Company at that time. COMPENSATION From time to time, the independent directors of the Board will review the compensation payable to the CEO and CFO. The directors receive no compensation in their capacity as directors other than the grant of stock options from time to time, which allocation is made by the Board as a whole. OTHER BOARD COMMITTEES The board has no standing committees other than the Audit Committee. - 11 - ASSESSMENTS The Board of Directors of the Company does not conduct any formal evaluation of the performance and effectiveness of the members of the Board, the Board as a whole or any committee of the Board. AUDIT COMMITTEE THE AUDIT COMMITTEE'S CHARTER The following is the text of the Company's Audit Committee Charter: "MANDATE The primary function of the audit committee (the "Committee") is to assist the board of directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Company's systems of internal controls regarding finance and accounting and the Company's auditing, accounting and financial reporting processes. The Committee's primary duties and responsibilities are to: o Serve as an independent and objective party to monitor the Company's financial reporting and internal control system and review the Company's financial statements. o Review and appraise the performance of the Company's external auditors. o Provide an open avenue of communication among the Company's auditors, financial and senior management and the Board of Directors. COMPOSITION The Committee shall be comprised of three directors as determined by the Board of Directors, the majority of whom shall be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his independent judgment as a member of the Committee. At least one member of the Committee shall have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of the Audit Committee Charter, the definition of "financially literate" is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company's financial statements. The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders' meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership. MEETINGS The Committee shall meet a least twice annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Financial Officer and the external auditors in separate sessions. RESPONSIBILITIES AND DUTIES To fulfill its responsibilities and duties, the Committee shall: - 12 - Documents/Reports Review (a) Review and update the Charter annually. (b) Review the Company's financial statements, MD&A and any annual and interim earnings, press releases before the Company publicly discloses this information and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors. External Auditors (a) Review annually, the performance of the external auditors who shall be ultimately accountable to the Board of Directors and the Committee as representatives of the shareholders of the Company. (b) Recommend to the Board of Directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval. (c) Review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements. (d) Review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Company's external auditors. Provided the pre-approval of the non-audit services is presented to the Committee's first scheduled meeting following such approval such authority may be delegated by the Committee to one or more independent members of the Committee. FINANCIAL REPORTING PROCESSES (a) In consultation with the external auditors, review with management the integrity of the Company's financial reporting process, both internal and external. (b) Consider the external auditors' judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting. (c) Consider and approve, if appropriate, changes to the Company's auditing and accounting principles and practices as suggested by the external auditors and management. (d) Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information. (e) Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements. (f) Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented. (g) Review any complaints or concerns about any questionable accounting, internal accounting controls or auditing matters. (h) Review certification process. (i) Establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. - 13 - OTHER Review any related-party transactions." COMPOSITION OF THE AUDIT COMMITTEE The following are the members of the Committee: -------------------------------------------------------------------------------- INDEPENDENT (1) FINANCIALLY LITERATE (1) -------------------------------------------------------------------------------- Nick DeMare N Y -------------------------------------------------------------------------------- Grigory Aleksenko Y Y -------------------------------------------------------------------------------- Brian McEwen Y Y -------------------------------------------------------------------------------- NOTE: (1) AS DEFINED BY MULTILATERAL INSTRUMENT 52-110 ("MI 52-110"). RELEVANT EDUCATION AND EXPERIENCE Nick DeMare is a Chartered Accountant with significant experience working with resource issuers as a chief financial officer and as an officer or director of numerous reporting companies. Grigory Aleksenko is the managing partner and cofounder of AGA Management Ltd., a leading, Moscow based consulting company specializing in Russian financial and M&A markets. Brian McEwen has over 25 years of mineral exploration and production experience including project management, economic evaluation and mine planning for various mining concerns throughout the world. Mr. McEwen is an officer and director of other reporting companies. As such each has acquired a knowledge and understanding of the financial issues and accounting principles that are relevant in assessing this Company's financial disclosures and internal control systems. AUDIT COMMITTEE OVERSIGHT At no time since the commencement of the Company's most recently completed financial year was a recommendation of the Committee to nominate or compensate an external auditor not adopted by the Board of Directors. RELIANCE ON CERTAIN EXEMPTIONS At no time since the commencement of the Company's most recently completed financial year has the Company relied on the exemption in Section 2.4 of MI 52-110 (De Minimis Non-audit Services), or an exemption from MI 52-110, in whole or in part, granted under Part 8 of Multilateral Instrument 52-110. PRE-APPROVAL POLICIES AND PROCEDURES The Committee has adopted specific policies and procedures for the engagement of non-audit services as described above under the heading "External Auditors". EXTERNAL AUDITOR SERVICE FEES (BY CATEGORY) The aggregate fees billed by the Company's external auditors in each of the last two fiscal years for audit fees are as follows: -------------------------------------------------------------------------------- AUDIT FINANCIAL AUDIT RELATED ALL OTHER YEAR ENDING FEES FEES TAX FEES FEES -------------------------------------------------------------------------------- May 31, 2008 $39,116 - - - -------------------------------------------------------------------------------- May 31, 2007 $35,000 - - - -------------------------------------------------------------------------------- - 14 - EXEMPTIONS In respect of the most recently completed financial year, the Company is relying on the exemption set out in section 6.1 of the Instrument with respect to compliance with the requirements of Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of the Instrument. PARTICULARS OF OTHER MATTERS TO BE ACTED UPON AMENDMENT OF STOCK OPTION PLAN At the Meeting, shareholders will also be asked to approve, with or without amendment, an Ordinary Resolution approving an amendment to the Company's Stock Option Plan to increase the number of shares issuable on the exercise of options under the Plan by 6,823,800 shares from 10,777,000 shares (equal to 10,777,000 shares approved at the 2007 annual general meeting less nil options exercised since that meeting) to 17,600,800 shares, which equals 20% approximately of the current issued share capital of the Company (88,004,125 shares). Management considers it necessary to have the maximum number of options available for grant as the Company grows and retains new employees and consultants. If the Company's issued share capital increases or if further options are exercised between the date of this circular and the meeting date, the resolution will be amended accordingly to provide for the maximum increase allowable under the Policies of the TSX Venture Exchange. The Company has outstanding options to buy 9,175,000 shares. If the increase in the number of options that may be granted under the Plan is approved, the Company will have unallocated options remaining under the Plan to purchase 8,425,800 shares. The resolution approving the amendment to the Plan requires confirmation by a majority of the votes cast by disinterested shareholders at the Meeting (as determined by the Policies of the TSX Venture Exchange) and also requires the approval of the TSX Venture Exchange. OTHER MATTERS Management of the Company knows of no other matters to come before the Meeting other than those referred to in the Notice of Meeting accompanying this Information Circular. However, if any other matters properly come before the Meeting, it is the intention of the persons named in the form of proxy accompanying this Information Circular to vote the same in accordance with their best judgment of such matters. ADDITIONAL INFORMATION Additional information relating to the Company is on SEDAR at www.sedar.com. Shareholders may contact the Company at Suite 598 - 999 Canada Place, Vancouver, British Columbia, Canada, V6C 3E1or by telephone at 604-688-4110 to request copies of the Company's financial statements and MD&A for its most recently completed financial year. Financial information is provided in the Company's comparative financial statements and MD&A for its most recently completed financial year. KOLA MINING CORP. (the "Company") 2009 REQUEST FOR ANNUAL AND INTERIM FINANCIAL STATEMENTS National Instrument 51-102 requires the Company to send annually to the registered holders and beneficial owners of its securities ('Securityholders") a form to allow Securityholders to request a copy of the Company's annual financial statements and related MD&A, interim financial statements and related MD&A, or both. If you wish to receive such mailings, please complete and return this form to: KOLA MINING CORP. C/O SUITE 1305, 1090 WEST GEORGIA STREET VANCOUVER, BC V6E 3V7 FAX: (604) 683-1585 The undersigned Securityholder hereby elects to receive: [ ] Interim Financial Statements for the first, second and third financial quarters of 2009 and the related MD&A, and / or [ ] Annual Financial Statements for the fiscal year ended May 31, 2009 and related MD&A. Please note that a request form will be mailed each year and Securityholders must return such form each year to receive the documents indicated above. NAME: ___________________________________________________________________ ADDRESS: ___________________________________________________________________ ___________________________________________________________________ POSTAL CODE: ___________________________________________________________________ I confirm that I am a registered I beneficial (circle one) securityholder of the Company. Signature of Securityholder: __________________________________ Date: __________________ CUSIP: 500427 10 9