Corporate Governance

Constating Document - Articles

July 3, 2018

Charter of the Reserves Committee

July 3, 2018

Charter of the Compensation Committee

July 3, 2018

Charter of the Audit Committee

July 3, 2018

Charter of the Governance and Nominating Committee

July 3, 2018

Charter of the Board of Directors

July 3, 2018

Position Description for the Lead Director of the Board of Directors

July 3, 2018

Position Description for the Chairman of the Board of Directors

July 3, 2018

Majority Voting Policy

July 3, 2018

Code of Business Conduct and Ethics

July 2, 2018

Significant Differences in DXI’s Corporate Governance Practices Compared to NYSE MKT Corporate Governance Standards

As a Canadian corporation listed on the NYSE MKT, DXI is not required to comply with most of the NYSE MKT corporate governance standards, so long as it complies with Canadian and TSX corporate governance requirements.  In order to claim such an exemption, however, DXI must disclose the significant difference between its corporate governance practices and those required to be followed by U.S. domestic companies under the NYSE MKT corporate governance standards.

DXI’s corporate governance practices meet or exceed all applicable Canadian requirements.  They also incorporate some best practices derived from the NYSE MKT rules, and comply with applicable United States securities laws and rules adopted by the United States Securities and Exchange Commission (the “SEC”).  Further information about DXI’s corporate governance practices is included in DXI’s Information Circulars prepared in respect of its annual meetings of shareholders.

The following is a summary of the significant ways in which DXI’s corporate governance practices differ from those required to be followed by U.S. domestic issuers under NYSE MKT’s corporate governance standards.  Except as described in this summary, DXI is in compliance with the NYSE MKT corporate governance standards in all significant respects.

Quorum Requirements

The rules of the NYSE MKT require a quorum of at least 33-1/3% of the shares issued and outstanding and entitled to vote for a meeting of a listed company's shareholders. The TSX does not specify a quorum requirement for a meeting of a listed company's shareholders. DXI’s current required quorum at any meeting of shareholders (unless a greater number of persons are required to be present or a greater number of shares are required to be represented by the Business Corporations Act (British Columbia) (the “BCBCA”) or any special rights attached to any class or series of shares issued by DXI), as set forth in DXI’s Articles, is one or more shareholders present in person or represented by proxy.  DXI’s current quorum requirement is not prohibited by, and does not constitute a breach of, the BCBCA, applicable Canadian securities laws or the rules and policies of the TSX.

Approval of Equity Compensation Plans

Subject to certain exceptions, the rules of the NYSE MKT require shareholder approval of all equity compensation plans and material amendments to such plans.  The circumstances in which the NYSE MKT rules require shareholder approval with respect to equity compensation plans are broader than under the rules of the TSX.  For example, the NYSE MKT rules require shareholder approval for any compensation arrangement in which an officer, director, employee or consultant may receive options or stock (including stock purchased in the open market for re-distribution), while the TSX rules provide that only the creation of or certain material amendments to equity compensation plans that provide for new issuances of securities are subject to shareholder approval.  DXI follows the TSX rules with respect to the requirements for shareholder approval of equity compensation plans and material amendments to such plans.

Approval of Certain Private Placements

The rules of the NYSE MKT require a listed company to obtain shareholder approval for certain types of securities issuances, including private placements that may result in the issuance of common shares (or securities convertible into common shares) equal to 20% or more of presently outstanding shares, for a price that is less than the greater of the book or market value of the common shares. Under TSX rules, shareholder approval is required only for issuances of securities in excess of 25% of the issued and outstanding shares.  In the event that the NYSE MKT's shareholder approval requirements are triggered by an issuance of DXI’s securities, DXI will, if permitted by the TSX, seek an exemption from the NYSE MKT shareholder approval requirements on the basis that it should be allowed to rely on the TSX shareholder approval rules.

Proxy Solicitation Requirements

The rules of the NYSE MKT require the solicitation of proxies and delivery of proxy statements for all shareholder meetings of a listed company, and that proxies be solicited pursuant to a proxy statement that conforms to the proxy rules of the SEC.  As a "foreign private issuer" as defined under the United States Securities Exchange Act of 1934, as amended, DXI is exempt from the proxy rules of the SEC, and instead DXI solicits proxies in accordance with the BCBCA, applicable Canadian securities laws and the rules and policies of the TSX, which are consistent in material respects with the SEC’s proxy rules..

Governance and Nominating Committee

Members: Ronnie Bozzer (Chairman), Craig Sturrock, Ross Gorrell
ROLE AND RESPONSIBILITIES
  • developing a set of corporate governance principles and guidelines applicable to the Company and reviewing and approving the Company’s annual disclosure of corporate governance compliance;
  • establishing a long-term plan for composition of the Board;
  • assessing periodically the effectiveness of the Board as a whole and each committee of the Board;
  • establishing a process for identifying, recruiting and appointing new directors and recommending nominees for election to the Board;
  • reviewing, recommending and overseeing the education and orientation program for new Board members and continuing education for directors;
  • reviewing periodically the size of the Board to ensure its continued effectiveness;
  • assessing the effectiveness of, and ensuring there is a succession plan for, the Chairman of the Board;
  • reviewing and determining director compensation annually to ensure such compensation properly reflects the responsibilities and risks involved in being a director (this includes, but is not limited to reviewing the purpose of, and recommending grants under, the Company’s stock option plan);
  • developing written position descriptions for the Chairs of the Committees and the Chairman of the Board;
  • reviewing the general responsibilities and function of the Board, its committees, their mandates and the roles of the Chairman of the Board and the Chief Executive Officer;
  • assessing the needs of the Board in terms of frequency, location and conduct of Board and committee meetings;
  • in respect of matters within the Governance and Nominating Committee’s purview and delegation, assisting the Board in its oversight of the Company’s compliance with legal and regulatory compliance;
  • considering, and when appropriate, granting waivers from the application of the Policy on Business Conduct and Ethics to executive officers and directors. All material waivers shall be promptly disclosed to shareholders in accordance with securities legislation;
  • considering requests from individual directors or committees to engage outside advisors; and
  • review annually the directors and officers insurance policy and make recommendations for renewal or amendment or replacement of the insurers.

Audit Committee

Members:  Craig Sturrock (Chairman), Ronnie Bozzer, Stan Page
ROLE AND RESPONSIBILITIES
  • overseeing the integrity of the Company’s financial statements
  • reviewing and recommending to the Board for approval, the Company’s annual financial statements and accompanying annual management’s discussion and analysis;
  • reviewing the Company’s interim financial statements and accompanying interim management’s discussion and analysis prior to their publication, filing or delivery to shareholders;
  • reviewing the annual and all interim earnings press releases prior to their filing or publication;
  • recommending to the Board the auditors who will be proposed at the annual shareholders’ meeting for appointment as the Company’s external auditor for the ensuing year;
  • evaluating the qualifications and ensuring the independence of the Company’s auditor;
  • reviewing and pre-approving the terms of the annual external audit engagement plan, as well as non-audit services the auditor is to perform;
  • reviewing results of external audit activities;
  • reviewing the Company’s ongoing relationship with its auditor and the performance of the auditor;
  • maintaining direct access to the Company’s external auditor and meeting separately when deemed necessary;
  • reviewing and assessing regularly:
    1. the quality and acceptability of accounting policies and financial reporting practices used by the Company;
    2. any significant proposed changes in financial reporting and accounting policies and practices to be adopted by the Company;
    3. any new or pending developments, in accounting and reporting standards that may affect the Company;
    4. the key financial estimates and judgments of management that may be material to the financial reporting of the Company;
    5. policies related to financial disclosure risk assessment and management;
    6. responses by management to material information requests from government or regulatory authorities which may have an impact on the financial reporting of the Company; and
    7. the accounting treatment of large transactions through presentations by management and the Company’s auditor;
  • reviewing and obtaining reasonable assurance that the Company’s internal financial control and information systems are properly designed and effectively implemented to produce accurate, appropriate and timely financial information and disclosure;
  • reviewing insurance coverage of significant business risks;
  • reviewing corporate policies within the scope of its responsibility and monitoring compliance with such policies;
  • in respect of matters within the Audit Committee’s purview and delegation, assisting the Board in its oversight of the Company’s compliance with legal and regulatory requirements;
  • directing and supervising the investigation into any matter brought to the Committee’s attention within the scope of its duties; and
  • reporting to the Board at each regularly scheduled meeting following any Audit Committee meeting.
Charter of the Audit Committee

Compensation Committee

Members:  Craig Sturrock (Chairman), Ronnie Bozzer, Stan Page
ROLE AND RESPONSIBILITIES
  • reviewing succession plans for key management positions within the Company and its subsidiaries;
  • reviewing and making recommendations to the Board as to the election or appointment of executive officers of the Company;
  • reviewing management development policies and practices and staffing plans in the Company;
  • reviewing and recommending to the Board for approval the compensation and benefit policies of the Company and its subsidiaries, the terms and conditions of employee benefit plans, including incentive-compensation plans and equity-based compensation plans;
  • leading the process for assessing the performance of the Chief Executive Officer;
  • developing a written position description for the Company’s Chief Executive Officer and reviewing the employment agreements and annual performance contracts of the Chief Executive Officer and executive officers;
  • reviewing and approving the compensation levels of executive officers. In considering the Chief Executive Officer's compensation level, the Committee reviews and approves the corporate goals and objectives relevant to the Chief Executive Officer's compensation, evaluates the Chief Executive Officer's performance in light of those goals and objectives, and determines and approves the Chief Executive Officer's compensation level based on this evaluation;
  • reviewing and approving employee stock option grants in accordance with the terms of the Employee Stock Option Plan;
  • reviewing human resource strategies and policies;
  • producing and reviewing the Company’s disclosure of executive compensation; and
  • In respect of matters within the Compensation Committee’s purview and delegation, assisting the Board in its oversight of the Company’s compliance with legal and regulatory requirements.
Compensation Charter DXI Energy Inc.

Reserves Committee

Members:  Craig Sturrock (Chairman), Ronnie Bozzer, Stan Page
ROLE AND RESPONSIBILITIES
  • reviewing the Company’s procedures relating to the disclosure of information with respect to oil and gas activities;
  • reviewing the Company’s procedures for providing information to the qualified reserves evaluator or auditor who reports on reserves data;
  • meeting with management and the qualified reserves evaluator or auditor to review the reserves data and the report of the qualified reserves evaluator or auditor and to determine whether any restrictions affect the ability of the qualified reserves evaluator or auditor to report on reserves data without reservation;
  • reviewing and recommending to the Board for approval the content and filing of the Company’s annual statement of reserves data and other oil and gas information;
  • reviewing and recommending to the Board for approval the filing of the annual report on reserves data by the qualified reserves evaluator or auditor;
  • reviewing and recommending to the Board for approval the content and filing of the Company's annual report of management and directors on oil and gas disclosure; and
  • in respect of matters within the Reserves Committee’s purview and delegation, assisting the Board in its oversight of the Company’s compliance with legal and regulatory requirements.
Reserves Charter DXI Energy Inc.