FRU.UN $13.65
 

The governance structure of a trust is not the same as for a conventional corporation. The Trust holds a royalty granted by Freehold Resources Ltd. (the operating company), with certain rights under a Trust Indenture, a Unanimous Shareholders Agreement and a Management Agreement (see Material Contracts). The Trust has no directors. The board of directors of Freehold Resources Ltd. has a mandate to supervise the management of the business and affairs of the Trust in the best interests of the Unitholders. The board meets quarterly to review operating and financial results and when required to consider other matters.

Relationship with CN Pension Trust Funds

Rife Resources Management Ltd, the Manager of the Trust, is a wholly-owned subsidiary of Rife Resources Ltd., which is 100% owned by the CN Pension Trust Funds. The CN Pension Trust Funds (the pension funds for employees of the Canadian National Railway Company) holds 22.38% of Freehold's Trust Units as at June 30, 2007. The Manager also manages two other entities on behalf of the CN Pension Trust Funds. These are Rife Resources Ltd., a private oil and gas company, and Canpar Holdings Ltd., a private royalty holding company. The board has addressed potential conflicts of interest of the Manager (which arise primarily out of acquisition activity) through an arrangement that provides for a sharing formula for any acquisitions completed by the Manager on behalf of the Trust.

Board Independence

Freehold has a seven-member board, the majority of whom are independent directors. Unitholders are entitled to elect five directors annually and two directors are elected by the Manager. The Chairman of the board is an independent director, as are the directors who chair the board's three standing committees.

Disclosure and Insider Trading Policies

Policies are in place to ensure that:

  • Freehold has consistent standards and procedures for communication of both material and non-material information;
  • Communication of material information to the investing public (whether positive or negative) is timely, factual and accurate, and is broadly disseminated in a non-selective manner in accordance with all applicable legal and regulatory guidelines; and
  • The directors and officers of Freehold and the employees of the Manager have been given guidelines regarding trading in securities of the Trust, including mandatory blackout periods.