-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ivz/pHYg0loDzjoDE6TO8VxOkNbW7cSp/iLAj2JjsAa++Mi9zorrObanThRdHT0L oH9O08Qerop9oP1CVSgrxA== 0001047469-05-014720.txt : 20050513 0001047469-05-014720.hdr.sgml : 20050513 20050513143326 ACCESSION NUMBER: 0001047469-05-014720 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050505 FILED AS OF DATE: 20050513 DATE AS OF CHANGE: 20050513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACETEX CORP CENTRAL INDEX KEY: 0001002929 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-98770 FILM NUMBER: 05828412 BUSINESS ADDRESS: STREET 1: 750 WORLD TRADE CENTRE STREET 2: 999 CANADA PLACE CITY: VANCOUVER BC STATE: A1 BUSINESS PHONE: 6046889600 MAIL ADDRESS: STREET 1: 750 WORLD TRADE CENTRE STREET 2: 999 CANADA PLACE CITY: VANCOUVER BRITISH COLUMBIA CAN STATE: A1 ZIP: V6C3E1 6-K 1 a2158186z6-k.txt FORM 6-K FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 REPORT OF A FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES ACT OF 1934 For the month of May 2005 --------------------------------------------------------------- Acetex Corporation - -------------------------------------------------------------------------------- (Translation of registrant's name into English) 750 World Trade Centre, 999 Canada Place, Vancouver, British Columbia, Canada V6C 3E1 - -------------------------------------------------------------------------------- (Translation of principal executive offices) [Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.] Form 20-F Form 40-F /X/ ----------- ----------- [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-______________] This Form 6-K consists of a notice of meeting, proxy and proxy circular in respect of Annual ACETEX CORPORATION NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS Notice is hereby given that the Annual General Meeting of Shareholders of Acetex Corporation (the "Corporation") will be held at The Pan Pacific Hotel, 999 Canada Place, Vancouver, British Columbia, on Wednesday, the 8th day of June, 2005 at 10:00 a.m. for the following purposes: 1. to receive the financial statements of the Corporation for the year ended December 31, 2004 together with the report of the auditors thereon; 2. to elect directors; 3. to appoint auditors; 4. to transact such other business as may properly come before the meeting or any adjournment thereof. Shareholders who are unable to attend the meeting in person are requested to date and sign the enclosed form of proxy and to return it in the envelope provided for that purpose. DATED at Calgary, Alberta May 5, 2005. BY ORDER OF THE BOARD (Signed) ---------------------------------------- David W. Ross Secretary ACETEX CORPORATION FORM OF PROXY PROXY SOLICITED BY MANAGEMENT FOR THE 2005 ANNUAL GENERAL MEETING OF THE SHAREHOLDERS The undersigned shareholder of Acetex Corporation (the "Corporation") hereby appoints Brooke N. Wade, or failing him, Kenneth E. Vidalin, or failing him, David W. Ross or, instead of and to the exclusion of all of the foregoing, _____________________ as nominee, to attend, act and vote for the undersigned at the Annual General Meeting of shareholders of the Corporation, to be held on the 8th day of June, 2005 and at any adjournment thereof in the following manner: 1. For [ ] or withhold from voting [ ] the election of directors as described in the Management Proxy Circular. 2. For [ ] or withhold from voting [ ] in respect of the appointment of KPMG LLP, Chartered Accountants, as auditors of the Corporation. 3. Upon any amendment or variation which may properly be put before the meeting with respect to any matter identified in the notice of the meeting and on any other matter which may properly come before the meeting. The undersigned hereby revokes any proxies dated prior to the date hereof. DATED , 2005. ---------------------------------------- Signature of Shareholder ---------------------------------------- Print Name PLEASE NOTE: 1. A proxy must be signed by the shareholder or the shareholder's attorney authorized in writing. Please sign exactly as your shares are registered. If the shareholder is a corporation, the proxy must be executed under its corporate seal or by a duly authorized officer or attorney. 2. If the Form of Proxy is not dated in the blank space above, the proxy is deemed to bear the date on which it is mailed by the person making the solicitation. 3. You may appoint any person, who need not be a shareholder, as nominee, other than those persons specifically named above, to attend and act on your behalf at the meeting by inserting the name of such person in the blank space provided above or by completing another appropriate Form of Proxy. 4. Your shares will be voted in accordance with your instructions given above. If no instructions are given for a particular item, your shares will be voted for that item. 5. A proxy will not be acted upon unless it is completed as specified herein and received by Computershare Trust Company of Canada at 600, 530 - 8 Avenue S.W., Calgary, Alberta, T2P 3S8 or 100 University Avenue, 11th Floor, Toronto, Ontario, M5J 2Y1 at any time up to 5:00 p.m. (local time) on the last business day preceding the date of the meeting (or any adjournment thereof) or by the Chairman of the meeting prior to the commencement of the meeting on the day of the meeting or the day of any adjournment thereof. Page 2 ACETEX CORPORATION MANAGEMENT PROXY CIRCULAR AS OF 5TH DAY OF MAY, 2005 SOLICITATION OF PROXIES BY MANAGEMENT This Management Proxy Circular is furnished in connection with the solicitation by the management of ACETEX CORPORATION (the "Corporation") of proxies to be used at the Annual General Meeting of Shareholders of the Corporation to be held on the 8th day of June, 2005 at 10:00 a.m. at The Pan Pacific Hotel, 999 Canada Place, Vancouver, British Columbia, and at any adjournment thereof for the purposes set forth in the accompanying Notice of Annual General Meeting. The cost of this solicitation will be borne by the Corporation. APPOINTMENT OF PROXYHOLDERS AND REVOCATION OF PROXIES The persons named in the accompanying Form of Proxy are officers of the Corporation. A shareholder has the right to appoint a person, who need not be a shareholder of the Corporation, other than the persons designated in the accompanying Form of Proxy, to attend and act on behalf of the shareholder at the meeting. To exercise this right, a shareholder may either insert such other person's name in the blank space provided in the accompanying Form of Proxy, or complete another appropriate Form of Proxy. To be valid, a proxy must be dated and signed by the shareholder or the shareholder's attorney authorized in writing. The proxy, to be acted upon, must be deposited with the Corporation, c/o its agent, Computershare Trust Company of Canada, 600, 530 - 8th Avenue S.W., Calgary, Alberta T2P 3S8 or 100 University Avenue, 11th Floor, Toronto, Ontario M5J 2Y1, by the close of business on the last business day prior to the date on which the meeting or any adjournment thereof is held, or with the chairman of the meeting on the day of the meeting or any adjournment thereof. A shareholder who has given a proxy may revoke it by depositing an instrument in writing (including another proxy) executed by the shareholder or by the shareholder's attorney authorized in writing at the registered office of the Corporation at any time up to and including the last business day prior to the day the meeting or any adjournment thereof is to be held, or with the chairman of the meeting on the day of the meeting at any time before it is exercised on any particular matter or in any other manner permitted by law including attending the meeting in person. VOTING BY PROXIES On any ballot that may be called for regarding the election of directors and appointment of auditors, the Common Shares ("Shares") represented by the enclosed Form of Proxy will be voted or withheld from voting in accordance with the instructions of the shareholder indicated thereon. IN THE ABSENCE OF SUCH INSTRUCTIONS WITH REGARD TO THE ELECTION OF DIRECTORS OR THE APPOINTMENT OF AUDITORS, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE PERSONS NOMINATED FOR ELECTION AS DIRECTORS AND THE APPOINTMENT OF AUDITORS, IN EACH CASE, AS REFERRED TO IN THIS MANAGEMENT PROXY CIRCULAR. The enclosed Form of Proxy confers discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the Notice of Annual General Meeting, and with respect to any other matter which may properly come before the meeting. As of the date of this Management Proxy Circular, management is not aware of any such amendment, variation or other matter proposed or likely to come before the meeting. However, if any such amendment, variation or other matter properly comes before the meeting, it is the intention of the persons named in the enclosed Form of Proxy to vote on such other business in accordance with their judgment. ADVICE TO BENEFICIAL SHAREHOLDERS The information set forth in this section is of significant importance to many Acetex Shareholders, as a substantial number of them do not hold Shares in their own name. Shareholders who do not hold Shares in their own name ("Beneficial Shareholders") should note that only proxies deposited by Acetex Shareholders whose names appear on the records of Acetex as the registered holders of Shares can be Page 3 recognized and acted upon at the Meeting. If Shares are listed in an account statement provided to a Beneficial Shareholder by a broker, then in almost all cases those Shares will not be registered in the Beneficial Shareholder's name on the records of Acetex. Such Shares will more likely be registered under the names of the Beneficial Shareholder's broker or an agent of that broker. In Canada, the majority of such shares are registered under the name of CDS & Co. (the registration name for The Canadian Depositary for Securities, which acts as nominee for many Canadian brokerage firms). Acetex Shares held by brokers or their agents or nominees can only be voted (for or against resolutions) upon the instructions of the Beneficial Shareholder. Without specific instructions, brokers and their agents and nominees are prohibited from voting Shares for the broker's clients. THEREFORE, BENEFICIAL SHAREHOLDERS SHOULD ENSURE THAT INSTRUCTIONS RESPECTING THE VOTING OF THEIR ACETEX SHARES ARE COMMUNICATED TO THE APPROPRIATE PERSON. Applicable regulatory policy requires intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of shareholders' meetings. Every intermediary/broker has its own mailing procedures and provides its own return instructions to clients, which should be carefully followed by Beneficial Shareholders in order to ensure that their Shares are voted at the Meeting. The Form of Proxy supplied to a Beneficial Shareholder by its broker (or the agent of the broker) is similar to the Form of Proxy provided to registered Acetex Shareholders by Acetex. However, its purpose is limited to instructing the registered Acetex Shareholder (the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder. The majority of brokers now delegate responsibility for obtaining instructions from clients to ADP Investor Communications ("ADP"). ADP typically asks Beneficial Shareholders to return the proxy forms to ADP. ADP then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of Shares to be represented at the Meeting. A BENEFICIAL SHAREHOLDER RECEIVING AN ADP PROXY CANNOT USE THAT PROXY TO VOTE ACETEX SHARES DIRECTLY AT THE MEETING - THE PROXY MUST BE RETURNED TO ADP WELL IN ADVANCE OF THE MEETING IN ORDER TO HAVE THE ACETEX SHARES VOTED. Although a Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of voting Acetex Shares registered in the name of his broker (or agent of the broker), a Beneficial Shareholder may attend at the Meeting as proxyholder for the registered Acetex Shareholder and vote the Acetex Shares in that capacity. Beneficial Shareholders who wish to attend at the Meeting and indirectly vote their Acetex Shares as proxyholder for the registered Acetex Shareholder should enter their own names in the blank space on the instrument of proxy provided to them and return the same to their broker (or the broker's agent) in accordance with the instructions provided by such broker (or agent), well in advance of the Meeting. VOTING SHARES AND PRINCIPAL HOLDERS The number of Shares entitled to be voted on each matter to be acted on at the meeting as at May 2, 2005 (the "Record Date") was 34,605,338. Each shareholder is entitled to one vote for each Share shown as registered in the shareholder's name on the list of shareholders prepared as of the Record Date. However, in the event of any transfer of Shares by any such shareholder after such date, the transferee is entitled to vote those Shares if the transferee produces properly endorsed Share Certificates or otherwise establishes that the transferee owns the Shares, and requests Computershare Trust Company of Canada as transfer agent at 600, 530 - 8th Avenue S.W., Calgary, Alberta T2P 3S8 or 100 University Avenue, 11th Floor, Toronto, Ontario M5J 2Y1 to include the transferee's name in the shareholders' list not later than ten days before the meeting. To the knowledge of the Directors and Officers of the Corporation, the persons who beneficially own or exercise control or direction over Shares carrying more than 10% of the votes attached to all the shares of the Corporation entitled to be voted at the meeting are as follows: PERCENTAGE OF COMMON SHARE OWNERSHIP OVER 10%
NAME OF SHAREHOLDER NUMBER OF COMMON SHARES % OF COMMON SHARES Brooke N. Wade 7,966,846 23%
Page 4 ELECTION OF DIRECTORS The number of directors of the Corporation to be elected at the meeting is six. Each nominee for election as director is currently a director of the Corporation. The following table lists certain information concerning the persons proposed to be nominated for election as directors. The information as to common shares has been furnished by the respective nominees individually.
NUMBER OF COMMON SHARES PRESENT POSITIONS DATE FIRST BENEFICIALLY NAME AND MUNICIPALITY OF AND OFFICES WITH BECAME A PRESENT PRINCIPAL OWNED OR RESIDENCE THE CORPORATION DIRECTOR OCCUPATION CONTROLLED - ------------------------ ----------------- ----------------- ---------------------------- ---------------- Brooke N. Wade, Chairman, Chief December 1, 1994 Chairman and Chief Executive 7,966,846 Vancouver, B.C. Executive Officer Officer of the Company. and Director Kenneth E. Vidalin, President, Chief December 1, 1994 President and Chief 2,530,565 Vancouver, B.C. Operating Officer Operating Officer of the and Director Company. John B. Zaozirny, Q.C. Director January 19, 1995 Counsel, McCarthy Tetrault. 36,960 Calgary, Alberta John L. Garcia, Ph.D. Director May 11, 1995 Managing Director 536,960 London, U.K. AEA Investors Inc. Pierre Dutheil Director November 22, 1995 Independent Corporate Advisor 36,960 Paris, France Arnold L. Cader Director October 17, 2003 Independent Business 38,613 Toronto, Ontario Consultant
Management does not anticipate that any of the nominees for election as directors will be unable to serve as a director, but if that should occur for any reason prior to the meeting, the persons named in the enclosed Form of Proxy reserve the right to vote for another nominee in their discretion. Each director elected will hold office until the next Annual General Meeting or until his successor is elected or appointed, unless his office is earlier vacated. REMUNERATION OF DIRECTORS AND OFFICERS (A) COMPENSATION OF NAMED EXECUTIVE OFFICERS The aggregate compensation paid to the five highest paid officers and employees of the Corporation (other than directors) for the year ending December 31, 2004 was US $2,361,074. The compensation disclosed in the following table is that paid to the Chief Executive Officer and the four other executive officers of the Company for the Company's three most recently completed financial years (collectively referred to as the "Named Executive Officers"). Page 5 SUMMARY COMPENSATION TABLE (All in US Dollars unless otherwise stated)
- --------------------------------------------------------------------------------------------------------------------- LONG-TERM COMPENSATION ANNUAL COMPENSATION AWARDS - ----------------------------------------------------------------------------------------------------------------------- NAME AND OTHER ANNUAL ALL OTHER PRINCIPAL COMPENSATION(2) OPTIONS COMPENSATION POSITION YEAR SALARY BONUS ($) ($) GRANTED (#) ($) - ----------------------------------------------------------------------------------------------------------------------- Brooke N. Wade, 2004 $425,000 $141,667 $ 5,142 NIL NIL Chairman and Chief 2003 $325,000 $162,500 $ 4,710 NIL NIL Executive Officer 2002 $325,000 $ 41,250 $13,445 NIL NIL - ----------------------------------------------------------------------------------------------------------------------- Kenneth E. Vidalin, 2004 $300,000 $ 75,000 $ 3,349 NIL $ 36,895(3) President and Chief 2003 $250,000 $125,000 $ 2,360 NIL NIL Operating Officer 2002 $250,000 $ 25,000 $11,252 NIL NIL - ----------------------------------------------------------------------------------------------------------------------- Lori Bondar, 2004 $176,923 $ 62,500 $ 516 150,000 $162,004(4) Chief Financial Officer(1) (employment commenced April 13, 2004) - ----------------------------------------------------------------------------------------------------------------------- Jean Pierre Soufflet, 2004 (EURO) 270,000 (EURO) 149,400 (EURO) 6,439 NIL (EURO) 1,530 Vice President and 2003 (EURO) 270,000 (EURO) 80,551 (EURO) 5,897 NIL (EURO) 1,530(5) General Manager Acetex 2002 (EURO) 270,000 (EURO) 79,987 (EURO) 6,300 NIL (EURO) 1,530(5) Chimie - ----------------------------------------------------------------------------------------------------------------------- Gary Connaughty, 2004 $350,000 $ 59,500 $31,230 NIL NIL President AT Plastics(1) 2003 $145,833 $157,500 $10,555 NIL $719,775(6) (employment commenced August 6, 2003) - -----------------------------------------------------------------------------------------------------------------------
- ----------------- (1) Compensation shown since date of hire Page 6 (B) OPTIONS TO PURCHASE SECURITIES The Employee Stock Option Plan allows the Board of Directors to determine eligibility for options, the number of shares to be covered by each option and the terms of each option at its discretion. The exercise price may be fixed by the directors but in no case may be less than the closing market price on the day preceding the date of grant, or if no trades occur on such day, the next previous day on which trading took place. The aggregate number of options that may be granted to any one person may not exceed 5% of the number of issued and outstanding shares of the Corporation. Neither Mr. Vidalin nor Mr. Wade may receive any additional options under the Plan as amended. Any option awarded under the Plan has a maximum term of ten years from the date on which it is granted and all such options are non-transferable. EQUITY PLAN COMPENSATION INFORMATION The following table sets out information concerning the Acetex Option Plan as of December 31, 2004.
- ------------------------------------------------------------------------------------------------------------------ PLAN CATEGORY NUMBER OF ACETEX SHARES TO WEIGHTED AVERAGE EXERCISE NUMBER OF OPTIONS BE ISSUED UPON EXERCISE OF PRICE OF OUTSTANDING REMAINING AVAILABLE FOR OUTSTANDING OPTIONS OPTIONS FUTURE ISSUANCE - ------------------------------------------------------------------------------------------------------------------ Equity compensation plans 3,214,566 $6.95 564,218 approved by Acetex Shareholders - ------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES DURING THE MOST RECENT COMPLETED FINANCIAL YEAR AND FINANCIAL YEAR END VALUES
- ----------------------------------------------------------------------------------------------------------------------------- SECURITIES UNEXERCISED OPTIONS AT VALUE OF IN-THE-MONEY OPTIONS ACQUIRED ON AGGREGATE VALUE FY-END AT FY-END EXERCISE REALIZED (#) (CDN $) NAME (#) ($) EXERCISABLE/ UNEXERCISABLE EXERCISABLE/ UNEXERCISEABLE (a) (b) (c) (d) (e) - ----------------------------------------------------------------------------------------------------------------------------- Brooke N. Wade NIL NIL NIL NIL - ----------------------------------------------------------------------------------------------------------------------------- Kenneth E. Vidalin NIL NIL 781,088/NIL 1,687,150 / NIL - ----------------------------------------------------------------------------------------------------------------------------- Lori Bondar NIL NIL NIL/150,000 NIL/ $489,000 - ----------------------------------------------------------------------------------------------------------------------------- Jean Pierre Soufflet NIL NIL 200,000/NIL $327,000 / NIL - ----------------------------------------------------------------------------------------------------------------------------- Gary Connaughty NIL NIL 70,832 / 41,666 $277,123 / $112,915 - -----------------------------------------------------------------------------------------------------------------------------
Page 7 OPTION REPRICINGS TABLE OF OPTION REPRICINGS (CDN DOLLARS)
- -------------------------------------------------------------------------------------------------------------------- LENGTH OF MARKET PRICE ORIGINAL OF SECURITIES EXERCISE PRICE OPTION TERM SECURITIES AT TIME OF AT TIME OF REMAINING AT UNDER OPTION REPRICING OR REPRICING OR NEW EXERCISE DATE OF REPRICED OR AMENDMENT AMENDMENT PRICE REPRICING OR NAME DATE OF REPRICING AMENDED ($/SECURITY) ($/SECURITY) ($/SECURITY) AMENDMENT - -------------------------------------------------------------------------------------------------------------------- Gary Connaughty October 17, 2003 16,666 $5.25 $15.00 $6.10 7 years - -------------------------------------------------------------------------------------------------------------------- Gary Connaughty October 17, 2003 20,833 $5.25 $13.62 $6.10 8 years - -------------------------------------------------------------------------------------------------------------------- Gary Connaughty October 17, 2003 45,833 $5.25 $11.58 $6.10 9 years - --------------------------------------------------------------------------------------------------------------------
These options had originally been granted to Mr. Connaughty in his capacity as the Chief Executive Officer of AT Plastics Inc. and became Acetex Options on the acquisition of AT Plastics Inc. by Acetex on August 5, 2003. These downward repricings were made so that the exercise price of Mr. Connaughty's options was equal to the market price of Acetex Shares on such acquisition date. DEFINED BENEFIT PLAN DISCLOSURE PENSION PLAN TABLE FOR AT PLASTICS DESIGNATED EXECUTIVE PENSION PLAN
- ------------------------------------------------------------------------------------------------------------ REMUNERATION YEARS OF SERVICE - ------------------------------------------------------------------------------------------------------------ $ 15 20 25 30 35 - ------------------------------------------------------------------------------------------------------------ 125,000 33,323 44,431 55,539 66,646 77,754 - ------------------------------------------------------------------------------------------------------------ 150,000 40,823 54,431 68,039 81,646 95,254 - ------------------------------------------------------------------------------------------------------------ 175,000 48,323 64,431 80,539 96,646 112,754 - ------------------------------------------------------------------------------------------------------------ 200,000 55,823 74,431 93,039 111,646 130,254 - ------------------------------------------------------------------------------------------------------------ 225,000 63,323 84,431 105,539 126,646 147,754 - ------------------------------------------------------------------------------------------------------------ 250,000 70,823 94,431 118,039 141,646 165,254 - ------------------------------------------------------------------------------------------------------------ 300,000 85,823 114,431 143,039 171,646 200,254 - ------------------------------------------------------------------------------------------------------------ 400,000 115,823 154,431 193,039 231,646 270,254 - ------------------------------------------------------------------------------------------------------------ 500,000 145,823 194,431 243,039 291,646 340,254 - ------------------------------------------------------------------------------------------------------------ 600,000 175,823 234,431 293,039 351,646 410,254 - ------------------------------------------------------------------------------------------------------------ 700,000 205,823 274,431 343,039 411,646 480,254 - ------------------------------------------------------------------------------------------------------------ 800,000 235,823 314,431 393,039 471,646 550,254 - ------------------------------------------------------------------------------------------------------------
* AMOUNTS RELATE TO REMUNERATION IN CDN DOLLARS The compensation covered by the pension plan table shown above is in respect of designated executives of AT Plastics Inc., a Subsidiary of Acetex Corporation. The only named Executive Officer of Acetex who is a member of this plan is Mr. Gary Connaughty who is not currently receiving any compensation from the plan. The basis on which the benefits under this plan are computed is base salary and incentive payments (as shown on the Summary compensation Table set forth above), but excluding taxable benefits Page 8 and special one-time incentive payments, received or deemed to have been received from and determined by a participating company or a company associated with a participating company (all as shown on the Summary Compensation Table set forth above). Benefits are payable on a joint and survivor basis with 60% continuing to the surviving spouse. The above amounts are not subject to any deduction for social security or other amounts such as Canada Pension Plan or Quebec Pension Plan amounts. Mr. Gary Connaughty's credited service under the plan as at December 31, 2004 was 4.0 years. PENSION PLAN TABLE FOR AT PLASTICS EMPLOYEE PENSION PLAN
- ------------------------------------------------------------------------------------------------------------ REMUNERATION YEARS OF SERVICE - ------------------------------------------------------------------------------------------------------------ $ 15 20 25 30 35 - ------------------------------------------------------------------------------------------------------------ 50,000 7,500 10,000 12,500 15,000 17,500 - ------------------------------------------------------------------------------------------------------------ 75,000 11,250 15,000 18,750 22,500 26,250 - ------------------------------------------------------------------------------------------------------------ 100,000 15,000 20,000 25,000 30,000 35,000 - ------------------------------------------------------------------------------------------------------------ 125,000 18,750 25,000 31,250 37,500 43,750 - ------------------------------------------------------------------------------------------------------------ 150,000 22,500 30,000 37,500 45,000 52,500 - ------------------------------------------------------------------------------------------------------------ 175,000 26,250 35,000 43,750 52,500 61,250 - ------------------------------------------------------------------------------------------------------------ 200,000 30,000 40,000 50,000 60,000 70,000 - ------------------------------------------------------------------------------------------------------------
* AMOUNTS RELATE TO REMUNERATION IN CDN DOLLARS Compensation covered by the plan includes regular salaries and wages plus payments in respect of shift and Sunday premiums, vacation pay (but not pay in lieu of vacation) and payments in respect of overtime, but excluding incentive and/or any form of bonus payment. Effective January 1, 2002 compensation covered by the plan will be limited to $200,000 per annum. Benefits are payable in monthly installments for the lifetime of the retiree. The above amounts are not subject to any deduction for social security or other amounts such as Canada Pension Plan or Quebec Pension Plan amounts. There is no Named Executive Officer who is entitled to benefits under the above plan. TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITIES AND EMPLOYMENT CONTRACTS Acetex entered into a contract of employment with Brooke N. Wade as Chairman and Chief Executive Officer on December 1, 1994 and amended such contract May 4, 2004. This contract provides that upon an involuntary termination without cause, or if Mr. Wade resigns within one year following a change of control, Mr. Wade will be entitled to receive any accrued bonus, three years' salary, bonus and benefits. Acetex entered into a contract of employment with Kenneth E. Vidalin as President and Chief Operating Officer on December 1, 1994 and amended such contract May 4, 2004. This contract provides that upon an involuntary termination without cause, or if Mr. Vidalin resigns within one year following a change of control, Mr. Vidalin will be entitled to receive any accrued bonus, three years' salary, bonus and benefits. Acetex entered into a contract of employment with Jean Pierre Soufflet as Vice President Acetex Europe on August 8, 2000 and amended such contract September 16, 2004. The contract provides that upon involuntary termination without cause, whether or not following a change of control Mr. Soufflet will be entitled to receive three years' salary. AT Plastics entered into a contract of employment with Gary Connaughty on June 12, 2000 and amended this contract on November 13, 2003. This contract provides that Mr. Connaughty will be entitled to receive the greater of his retention bonus or one and one half years' base salary, benefits and anticipated bonus upon his involuntary without cause termination whether or not following a change of control. With respect to the AT Plastics Designated Pension Plan, this contract provides that upon an involuntary termination without cause, Mr. Connaughty's employment shall be deemed to continue for the period which is the lesser of (i) thirty-six (36) months following the date of termination or (ii) the period between the date of termination and the earlier of Mr. Connaughty's death, retirement or attainment of Page 9 age 65. Mr. Connaughty shall not be entitled to receive any benefits under the aforementioned pension plan until the date on which his employment is deemed terminated as provided in the preceding sentence. Acetex entered into a contract of employment with Lori Bondar as Chief Financial Officer on April 13, 2004. This contract provides that if Ms. Bondar is constructively or actually terminated without cause within 6 months following a change of control, or if Ms. Bondar resigns within 6 months following a change of control, Ms. Bondar will be entitled to receive any accrued bonus, three years' salary, bonus and benefits. If Ms. Bondar is terminated without cause without a change of control (i) if such termination occurs within 2 years of the date of the contract, Ms. Bondar shall be entitled to receive her accrued bonus plus 12 months of her salary and bonus; and (ii) if such termination occurs after two years of the date of the contract, Ms. Bondar shall be entitled to receive her accrued bonus plus 12 months of her salary and bonus plus 1/12 of her salary and bonus for each full year of service. COMPOSITION OF COMPENSATION COMMITTEE Acetex's Compensation Committee, which is entitled as the Human Resources and Corporate Governance Committee, is comprised of John L. Garcia, John B. Zaozirny, Q.C., and Pierre Dutheil, none of whom are or have ever been officers or employees of Acetex or any of its Subsidiaries. Mr. Dutheil is indebted to the Corporation as discussed below under the heading "Indebtedness of Directors and Executive Officers". REPORT ON EXECUTIVE COMPENSATION BY THE COMPENSATION COMMITTEE Acetex's compensation policies are designed to take into account the circumstances surrounding the initial formation of Acetex and generally to reward executive officers for long term strategic management which results in the enhancement of shareholder value. Accordingly, Mr. Wade, being the largest shareholder of Acetex, was not awarded any stock options and is paid a base salary which the Committee believes to be reasonable given Mr. Wade's responsibilities, position and experience. Mr. Vidalin was previously awarded significant stock options in order that Mr. Vidalin's compensation would be commensurate with appreciation in shareholder value and in order to ensure that Mr. Vidalin was a significant equity holder in Acetex. Mr. Vidalin's salary is also believed by the Committee to be reasonable given Mr. Vidalin's responsibilities, position and experience. Ms. Bondar is currently paid a salary the Committee believes to be fair given Ms. Bondar's responsibilities, position and experience. The Compensation Committee awarded bonuses to Mr. Wade, Mr. Vidalin,Ms. Bondar, Mr. Soufflet and Mr. Connaughty in respect of the 2004 fiscal year. Submitted on behalf of the Compensation Committee by: John L. Garcia, Chairman Pierre Dutheil John B. Zaozirny, Q.C. INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS AGGREGATE INDEBTEDNESS AS OF MAY 2, 2005
- ---------------------------------------------------------------------------------------- AGGREGATE INDEBTEDNESS ($) - ---------------------------------------------------------------------------------------- PURPOSE TO ACETEX OR ITS SUBSIDIARIES TO ANOTHER ENTITY (a) (b) (c) - ---------------------------------------------------------------------------------------- Share purchases CDN $210,000 Nil - ---------------------------------------------------------------------------------------- Other Nil Nil - ----------------------------------------------------------------------------------------
Page 10 Pierre Dutheil received a loan of CDN $210,000 on July 11, 1995. The purpose of the loan was to allow the borrower to acquire securities of the Corporation. As at the date hereof the aggregate amount of indebtedness of all Officers and Directors of the Corporation is CDN $210,000. The following table sets forth the current indebtedness and the largest aggregate amount of any indebtedness of each Director and Officer to the Corporation or any of its subsidiaries since the commencement of the Corporation's last completed financial year:
- ----------------------------------------------------------------------------------------------------------- LARGEST AMOUNT AMOUNT NUMBER OF OUTSTANDING DURING OUTSTANDING COMMON NAME AND PRINCIPAL YEAR ENDED AS AT THE DATE SHARES SECURITY FOR POSITION DECEMBER 31, 2004 HEREOF PURCHASED INDEBTEDNESS - ----------------------------------------------------------------------------------------------------------- Pierre Dutheil CDN $210,000 CDN $210,000 36,960 36,960 Common Director Shares - -----------------------------------------------------------------------------------------------------------
Page 11 (C) PERFORMANCE GRAPH The following graph assumes that CDN$100 was invested on December 31, 1999 in Common Shares of the Corporation and in Common Shares of the S&P/TSX Composite Index (formerly the TSE 300 Composite Index). [PERFORMANCE GRAPH]
- ------------------------------------------------------------------------------------------------ AT DECEMBER 31 1999 2000 2001 2002 2003 2004 - ------------------------------------------------------------------------------------------------ Acetex Common 100 131.15 98.36 76.23 108.36 144.43 - ------------------------------------------------------------------------------------------------ S&P/TSX Composite Index 100 107.46 93.95 82.38 104.08 119.03 - ------------------------------------------------------------------------------------------------
(D) CORPORATE GOVERNANCE MANDATE FOR THE BOARD OF DIRECTORS & DIRECTOR ATTRIBUTES The Board of Directors is responsible for overseeing the management of the Corporation's business and affairs. The Board of Directors has the statutory authority and obligation to act in good faith, with a view to protect and enhance the value of the Corporation in the interest of all shareholders. To this end, members of the Board of Directors are expected to exercise independent judgment and the utmost honesty and integrity, adhering to all the Corporation's policies and procedures, legal requirements and regulatory regimes. COMPOSITION OF THE BOARD OF DIRECTORS The Board of Directors currently consists of six members. The articles of the Corporation provide for a minimum of three directors and a maximum of ten. The Board of Directors is responsible to fix, from time to time, the number of directors within the minimum and maximum number permitted by the articles of the Corporation. A majority of the Board of Directors are unrelated. Two of the current directors (Brooke N. Wade and Kenneth E. Vidalin) hold management responsibilities in the Corporation and are therefore considered to be related directors. Four of the directors (John B. Zaozirny, Q.C., John L. Garcia, Pierre Dutheil and Arnold L. Cader) were, during the 2004 fiscal year, independent of management and free from any interest and any business or other relationship (including interests or relationships with the Corporation's Page 12 significant shareholder) which could, or could reasonably be perceived to, materially interfere with their ability to act with a view to the best interests of the Corporation, other than interests and relationships arising from shareholdings. RELATIONSHIP TO MANAGEMENT The Board of Directors together with the CEO works towards the development of position descriptions for the Board and for the CEO including the definition of limits to management's responsibilities. In addition, the Board works with the CEO to develop the corporate objectives for which the CEO will be responsible. Brooke N. Wade is Chairman of the Board and Chief Executive Officer of the Corporation. Mr. Wade currently holds directly or indirectly or beneficially controls approximately 23% of the outstanding Shares. In order to ensure that the Board of Directors can function independently of management, the responsibility for administering the Board's relationship to management has been assigned to the Human Resources and Corporate Governance Committee, all the members of which are unrelated directors. COMMITTEES OF THE BOARD OF DIRECTORS The Board of Directors does not have an Executive Committee. It has formed three Committees, the functions and membership of which are as follows: Audit Committee - The Audit Committee is charged with the responsibility of reviewing all annual financial statements and each of the Corporation's interim financial statements and to report thereon to the Board. The Audit Committee inquires into matters affecting financial reporting, systems of internal accounting and financial controls, audit procedures and audit plans and makes recommendations to the Board with respect to these and similar financial matters. The Audit Committee has the responsibility of ensuring that management has implemented an effective system of internal control. Members of the Committee are to review financial plans and objectives of the Corporation from time to time and to review with management the risks inherent in the Corporation's business and any risk management programs that may be desirable or necessary. The Audit Committee has direct communication with the Corporation's internal and external auditors. The Audit Committee is composed of John B. Zaozirny, Q.C., John L. Garcia, Arnold L. Cader and Pierre Dutheil, all of whom are unrelated directors. Human Resources and Corporate Governance Committee - The Human Resources and Corporate Governance Committee is charged with hiring persons to senior executive positions, succession planning, and terms of employment and compensation, including recommendations to the Board as to awards under the Corporation's Employee Stock Option Plan. The Committee is responsible for recommending nominees for appointment to the Board and determining the adequacy and form of compensation for members of the Board. The Committee is responsible to assess the effectiveness of the Board as a whole, the effectiveness of the Committees of the Board and the contribution of individual directors and to review the appropriate size of the Board. The Committee encourages new directors to receive an orientation program and education program. The Committee is charged with administering the relationship of the Board and management, monitoring shareholder concerns, corporate governance issues and formalizing responses to Toronto Stock Exchange guidelines. The Human Resources and Corporate Governance Committee is comprised of John L. Garcia, John B. Zaozirny, Q.C., and Pierre Dutheil, all whom are unrelated directors. Mr. Dutheil is indebted to the Corporation as discussed above. Environment Committee - The Environment Committee is responsible to review the policies and practices of the Corporation with respect to matters relating to the environment, occupational health and safety. The Committee is composed of Pierre Dutheil, John L. Garcia, John B. Zaozirny, Q.C. and Kenneth E. Vidalin. CORPORATE GOVERNANCE PRACTICES Extensive regulatory changes are in progress, many arising from the United States Sarbanes-Oxley Act and anticipated further changes arising from discussions between the TSX and the Ontario Securities Commission. The Corporation continues to follow the changes and as clarification on each is available, appropriate action will be taken. Page 13 The Corporation's governance procedures as compared with the TSX corporate governance disclosure guidelines are set out in Exhibit A to this circular. (E) COMPENSATION OF DIRECTORS & ATTENDANCE AT MEETINGS Directors' compensation is paid to each of the Directors of the Corporation (other than Mr. Wade and Mr. Vidalin). During the year ended December 31, 2004, annual retainers and meeting fees were paid on the following basis:
(US Dollars) - ------------------------------------------------------------------------------------- Annual Board Retainer Fee $37,500 - ------------------------------------------------------------------------------------- Annual Audit Committee Retainer Fee $ 5,000 - ------------------------------------------------------------------------------------- Annual Retainer Fee for Chairman of Human Resources and $ 5,000 Corporate Governance Committee - ------------------------------------------------------------------------------------- Annual Retainer Fee for Chairman of Environment Committee $ 2,500 - ------------------------------------------------------------------------------------- Board Meeting Attendance Fee $1,250 per meeting - -------------------------------------------------------------------------------------
Directors are reimbursed for their reasonable expenses incurred attending meetings plus a travel allowance of US $800 where applicable. For the fiscal year ended December 31, 2004 the remuneration paid to the directors in aggregate was US $209,250 (See also Statement of Corporate Governance Practices.) Page 14 SUMMARY OF ATTENDANCE OF DIRECTORS FOR THE 12 MONTH PERIOD ENDED DEC. 31, 2004
- --------------------------------------------------------------------------- DIRECTOR BOARD MEETINGS ATTENDED % ATTENDED - --------------------------------------------------------------------------- Arnold Cader 4 of 5 80 - --------------------------------------------------------------------------- Pierre Dutheil 5 of 5 100 - --------------------------------------------------------------------------- John Garcia, Ph.D. 5 of 5 100 - --------------------------------------------------------------------------- Kenneth E. Vidalin 5 of 5 100 - --------------------------------------------------------------------------- Brooke N. Wade 5 of 5 100 - --------------------------------------------------------------------------- John B. Zaozirny, Q.C. 5 of 5 100 - ---------------------------------------------------------------------------
(F) APPOINTMENT OF AUDITORS & COMPENSATION OF AUDITORS FOR NON-AUDIT SERVICES At the Annual General Meeting of Shareholders, it is proposed to appoint KPMG LLP, Chartered Accountants, as auditors of the Corporation to hold office until the next Annual General Meeting of Shareholders a remuneration to be fixed by the Board of Directors. KPMG LLP, Chartered Accountants were first appointed auditors of the Corporation on May 14, 1996. In 2003 and 2004 KPMG LLP were paid fees as follows:
(CDN DOLLARS) - ---------------------------------------------------------------------------------------------- AUDIT FEES AUDIT RELATED FEES TAX FEES ALL OTHER FEES TOTAL - ---------------------------------------------------------------------------------------------- 2003 $562,000 $182,000 $ 1,000 NIL $745,000 - ---------------------------------------------------------------------------------------------- 2004 $432,000 $149,000 $85,000 NIL $666,000 - ----------------------------------------------------------------------------------------------
AVAILABILITY OF DOCUMENTS Management anticipates that this Management Proxy Circular and the accompanying Form of Proxy will be mailed to shareholders on or about May 12, 2005. Unless otherwise stated, information contained herein is given as at May 12, 2005. Financial information is provided in the Corporation's Consolidated Financial Statements and Management's Discussion and Analysis (MD&A) for its most recently completed financial year. Copies of this Management Proxy Circular, as well as the Corporation's latest Annual Information Form and Annual Report (which includes the Corporation's audited financial statements and MD&A) for the year ended December 31, 2004, may be obtained from the Corporation's Web site at www.acetex.com or by mail upon request from the Corporate Secretary, 750 World Trade Centre, 999 Canada Place, Vancouver, British Columbia, V6C 3E1. You may also access our disclosure documents and any reports, statements or other information that we file with the Canadian provincial securities commission or other similar regulatory authorities through the Internet on the Canadian System Electronic Document Analysis and Retrieval, which is commonly known by the acronym SEDAR, and which may be accessed at www.sedar.com. SEDAR is the Canadian equivalent of the U.S. Securities and Exchange Commission's Electronic Document Gathering and Retrieval System, which is commonly known by the acronym EDGAR and which may be accessed at www.sec.gov. APPROVAL OF CIRCULAR BY ACETEX'S BOARD OF DIRECTORS This Circular and the sending, communication and delivery thereof to the Acetex Securityholders have been authorized and approved by the Board of Directors. DATED at Calgary, Alberta this 5th day of May, 2005. BY ORDER OF THE BOARD OF DIRECTORS (signed) Brooke N. Wade Chairman Page 15 EXHIBIT A CORPORATE GOVERNANCE PROCEDURES
CORPORATION TSX GUIDELINE ALIGNMENT THE CORPORATION'S GOVERNANCE PROCEDURES - ----------------------------------------------------------------------------------------------------------------------------------- 1. The Board should explicitly yes The Board, either directly or through Board committees, is responsible assume responsibility for for management or supervision of management of the business and stewardship of th Corporation affairs of the Corporation with the objective of enhancing shareholder and specifically for: value. The Board has adopted a formal mandate setting out its responsibilities. (i) adoption of a strategic yes The Board approves strategic plans of the Corporation. These plans planning process include details of the opportunities and risks of the business. The Board endeavours to hold annual strategy sessions which allow the directors to appreciate planning priorities and provide an opportunity for directors to give constructive feedback to management. Throughout the year, directors also receive strategic updates at regular Board meetings. (ii) identification of the yes The Board, through its Audit Committee, considers risk issues and principal business risks approves corporate policies addressing the management of the risk and and implementation of risk return from credit, market, liquidity and operational risk and such management system other risk management controls as are considered by the Committee to be appropriate for prudent business practice. (iii) succession planning, including yes The Board's Human Resources and Corporate Governance Committee reviews appointing, training and succession planning for senior management, including development and monitoring senior management monitoring of senior management. (iv) communications policy yes The Board has approved a Disclosure Policy covering the timely dissemination of all material information. The policy establishes consistent guidance for determining what information is material, how it is to be disclosed and, to avoid selective disclosure, making all material disclosures on a widely disseminated basis. The Corporation seeks to communicate with its shareholders and other stakeholders through its annual report, quarterly reports, annual information form, news releases, web site, briefing sessions and group meetings. (v) integrity of internal control yes The Audit Committee of the Board requires management to implement and and management information maintain appropriate systems of internal control. The Committee meets systems with the Chief Financial Officer and the Corporation's external auditors to assess the adequacy and effectiveness of these systems. In addition the Board and the Audit Committee have arranged for the Corporation to have Ernst & Young LLP act as internal auditor and report directly to the Audit Committee and the Board. 2. A majority of directors yes Four of six directors standing for election are "unrelated" and have should be "unrelated". no connection or professional association with the Corporation other than as directors. These directors have no other connection or professional relationship with each other. 3. Disclosure for each director yes Based on information provided by directors as to their individual the principles supporting the circumstances, the Board has determined that two of the six persons determination of whether proposed for election to the Board for 2005. are "related". These directors are "unrelated" related persons are the Chairman and Chief Executive Officer (Mr. Wade) and the President and Chief Operating Officer (Mr. Vidalin).
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CORPORATION TSX GUIDELINE ALIGNMENT THE CORPORATION'S GOVERNANCE PROCEDURES - ----------------------------------------------------------------------------------------------------------------------------------- 4. The Board should appoint a yes The Human Resources and Corporate Governance Committee is composed Committee of Directors composed exclusively of outside directors, all of whom are "unrelated" to the exclusively of outside Corporation. This Committee is responsible for identifying and directors, a majority of whom recommending to the Board suitable director candidates. are "unrelated" directors, with responsibility for proposing new nominees to the Board and for assessing directors on an ongoing basis. 5. The Board should implement a no The Board is considering how to best assess its own effectiveness and process, to be carried out by that of its committees and individual directors. an appropriate committee, for assessing the effectiveness of the board, its committees and the contribution of individual directors. 6. Provide orientation and yes On an ongoing basis, presentations are made to all directors on education programs for recruits various aspects of the Corporation's operations. Site visits to the to the Board of Directors. Corporation's plants are arranged for all directors periodically. 7. The Board should examine its yes The Board is of the view that the current membership has the necessary size and undertake, where breadth and diversity of experience and its current size is appropriate appropriate, a program to to provide for effective decision-making. establish the size of the board which facilitates effective decision-making. 8. The Board of Directors should yes The Human Resources and Corporate Governance Committee of the Board review the adequacy and form of annually reviews the compensation paid to directors to ensure that it compensation of directors in is competitive, aligns the interests of directors with those of light of the risks and shareholders and is consistent with the risks and responsibilities responsibilities involved in involved in being an effective director. being an effective director. 9. Committees should generally yes All Board committees are composed solely of outside directors who are be composed of outside "unrelated", except for the Environment Committee, of which the directors, a majority of whom President and Chief Operating Officer is one of three members. are unrelated.
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CORPORATION TSX GUIDELINE ALIGNMENT THE CORPORATION'S GOVERNANCE PROCEDURES - ----------------------------------------------------------------------------------------------------------------------------------- 10. The Board should assume yes The Human Resources & Corporate Governance Committee monitors best responsibility for, or practices for governance and annually reviews the Corporation's assign to a Committee of governance practices. The Board is responsible for the Corporation's Directors responsibility for, response to these governance guidelines. developing the approach to corporate governance issues. This committee would, among other things, be responsible for the Corporation's response to these governance guidelines. 11. The Board of Directors, together yes Position descriptions are being developed for the Board and the Chief with the Chief Executive Officer, Executive Officer. These guidelines will define the roles and should develop position responsibilities of the Board and management and delineate the lines descriptions for the Board and of accountability that exist within the Corporation. The guidelines for the Chief Executive Officer, will set out those matters requiring Board approval and those of which including the definition of the the Board must be advised following action by management. The Human limits to management's Resources and Corporate Governance Committee reviews and approves responsibilities. The Board corporate objectives which the Chief Executive Officer is responsible should approve or develop for meeting. The Committee also conducts the annual assessment of the corporate objectives which the Chief Executive Officer's performance against these objectives for Chief Executive Officer is purposes of determining his bonus. responsible for meeting and assess the Chief Executive Officer against these objectives. 12. The Board should implement yes Given that the Chairman and Chief Executive Officer has a substantial structures and procedures which interest in the Corporation the Board believes that the interests of ensure that it can function the Corporation and the management are aligned and that it is not independently of management. An necessary or appropriate to have any non-executive chair or lead appropriate structure would be to directors. However, the unrelated directors of the Board meet (i) appoint a chair of the board separately and apart from management to discuss the Corporation's who is not a member of management affairs and the performance of management. with responsibility to ensure that the Board discharges its responsibilities or (ii) assign this responsibility to an outside director, sometimes referred to as the "lead director". The chair or lead director should ensure that the board carries out its responsibilities effectively which will involve the Board meeting on a regular basis without management present and may involve assigning the responsibility for administering the board's relationship to management to a committee of the Board.
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CORPORATION TSX GUIDELINE ALIGNMENT THE CORPORATION'S GOVERNANCE PROCEDURES - ----------------------------------------------------------------------------------------------------------------------------------- 13. The Audit Committee should yes The Audit Committee is composed of unrelated directors and has be composed of only unrelated determined that all members of the Committee are financially literate. directors. All of the members Two of four members have accounting or related financial expertise of the committee should be and one of the members is a financial expert. The roles and financially literate and at responsibilities of the Audit Committee are set out in the Committee's least one member should have mandate and an overview of those roles and responsibilities is accounting or related financial included in the Report of the Audit Committee in this Proxy Circular. expertise. Each Board shall determine the definition of and The Audit Committee meets separately (without the management present) criteria for "financial with the Auditors and discusses with them the various aspects of the literacy" and "accounting or Committee's mandate. related financial expertise". The Board should adopt a As outlined in its mandate, the Audit Committee requires management to charter for the Audit Committee implement and maintain appropriate internal controls. which sets out the roles and responsibilities of the The Audit Committee mandate, which sets out the roles and committee. The Audit Committee responsibilities of the Committee, is reviewed by the Board annually. should have direct communication channels with the internal and the external auditors to discuss and review specific issues as appropriate. The Audit Committee duties should include oversight responsibility for management reporting on internal control. While it is management's responsibility to design and implement an effective system of internal control, it is the responsibility of the Audit Committee to ensure that management has done so. 14. Implement a system to enable an yes Individual directors may, with the concurrence of the Chair of the individual director to engage Human Resources & Corporate Governance Committee or the Audit outside advisors at the Committee, engage outside advisors at the expense of the Corporation. Corporation's expense in appropriate circumstances. The engagement of the outside advisor should be subject to the approval of an appropriate Committee of the Board.
Page 19 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Acetex Corporation ----------------------- (Registrant) DATE: May 12, 2005 By: "Lori Bondar" ----------------------- Lori Bondar Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----