Ryjencap Inc. Notice of Annual and Special ... - Empire Industries

NEITHER THE TSX VENTURE EXCHANGE INC. NOR ANY SECURITIES REGULATORY 

AUTHORITY HAS IN ANY WAY PASSED UPON THE MERITS OF THE QUALIFYING 

TRANSACTION DESCRIBED IN THIS CIRCULAR 

RYJENCAP INC. 

NOTICE OF ANNUAL AND SPECIAL MEETING 

and 

MANAGEMENT PROXY CIRCULAR 

WITH RESPECT TO THE 

ANNUAL AND SPECIAL MEETING 

OF SHAREHOLDERS 

TO BE HELD JUNE 15, 2006 

This proxy circular is furnished in connection with the solicitation of proxies by and on behalf of the 

management of RYJENCAP INC. for use at the annual and special meeting of the shareholders of the 

Corporation to be held on June 15, 2006, at the time and place and for the purposes set out in the accompanying 

Notice of Meeting, and any adjournment thereof. No person has been authorized to give any information or 

make any representation in connection with any matters to be considered at the meeting, other than as contained 

in this management proxy circular and, if given or made, any such information or representation must not be 

relied upon as having been authorized. 

May 18,2006

RYJENCAP INC. 

NOTICE OF THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS 

TO BE HELD JUNE 15, 2006 

The board of directors of RYJENCAP INC. (the "Corporation" or "Ryjencap") invites you to attend the annual and special 

meeting of the shareholders of the Corporation (the "Meeting") to be held in the main boardroom of McLeod & Company 

LLP located at 850, 410 - 9 Ave. SW, Calgary AB T2P 3C5, on June 15, 2006 at 10:00 a.m. (Calgary time), for the 

following purposes: 

1. to receive the audited financial statements of the Corporation for the year ended August 31, 2005, and the auditor's 

report on such statements; 

2. to consider and, if thought appropriate, pass, with or without variation, a resolution of the disinterested shareholders 

to approve, as the Corporation’s Qualifying Transaction, the acquisition of all of the issued and outstanding shares 

of Empire Iron Works Ltd., all as more fully disclosed in the management proxy circular dated May 18, 2006 (the 

"Circular") accompanying, and forming part of, this Notice; 

3. subject to the approval of the Qualifying Transaction, to fix the number of directors to be elected at the Meeting at 

four, and to elect the board of directors of the Corporation to serve until the next annual meeting of the Corporation 

or until their successors are duly elected or appointed; 

4. subject to the approval of the Qualifying Transaction, to consider and, if thought appropriate, pass an ordinary 

resolution appointing Scarrow & Donald LLP as auditor of the Corporation and authorizing the directors to fix their 

remuneration; 

5. subject to the approval of the Qualifying Transaction, to consider and, if thought appropriate, pass, with or without 

variation, a special resolution approving the consolidation of the currently issued and outstanding common shares on 

the basis of one "new" common share for each four "old" common shares; 

6. subject to the approval of the Qualifying Transaction to consider and, if thought appropriate, pass, with or without 

variation, a special resolution approving the change of name of the Corporation to "Empire Industries Ltd.", or 

such other name as may be selected by the directors and may be acceptable to applicable regulatory authorities; 

7. subject to the approval of the Qualifying Transaction to consider and, if thought appropriate, pass, with or without 

variation, a special resolution approving the amendment of the Articles of Incorporation of the Corporation to allow 

meetings of shareholders to be held at any place in Canada; 

8. to consider and, if thought appropriate, to pass, with or without variation, an ordinary resolution approving the Stock 

Option Plan; and 

9. to transact such other business as may properly come before the Meeting or any adjournment or adjournments of the 

Meeting. 

All shareholders are invited to attend the Meeting. Only shareholders of record at the close of business on April 26, 2006, are 

entitled to vote at the Meeting. The Circular accompanying this Notice provides additional information relating to the 

matters to be dealt with at the Meeting and is incorporated into and forms part of this Notice. If you are unable to attend the 

Meeting in person, please complete, date and sign the enclosed form of proxy and return it, in the envelope provided to CIBC 

Mellon Trust Company ("CIBC Mellon") through its Proxy Department at Suite 600, 333 - 7th Avenue SW, Calgary, 

Alberta, T2P 2Z1, so that it is received no later than 4:30 p.m. (Calgary time) on June 13, 2006, or by 4:30 p.m. (Calgary 

time) on the second Business Day prior to the date on which any adjournment of the Meeting is held. 

DATED at Surrey, B.C., May 18, 2006 

BY ORDER OF THE BOARD OF DIRECTORS 

(signed) Terry Rogers 

President, CEO and Director

TABLE OF CONTENTS 

GLOSSARY OF TERMS ............................................................................................................................................................................1 

SUMMARY OF THE INFORMATION CIRCULAR ........................................................................................................................6 

The Issuer................................................................................................................................................................................................ 6 

The Meeting............................................................................................................................................................................................ 6 

The Qualifying Transaction.................................................................................................................................................................. 7 

Letter Agreement ..........................................................................................................................................................................7 

The Target Company....................................................................................................................................................................7 

Factors Considered......................................................................................................................................................................7 

Conditions Precedent to the Qualifying Transaction.............................................................................................................7 

Interest of Insiders, Promoters or Control Persons of the Issuer ........................................................................................7 

Non-Arm’s Length Qualifying Transaction.............................................................................................................................8 

Available Funds............................................................................................................................................................................8 

Principal Use of the Funds.........................................................................................................................................................8 

Selected Financial Information..................................................................................................................................................8 

Conditional Listing Approval.............................................................................................................................................................. 9 

Interests of Professionals ...................................................................................................................................................................... 9 

Conflicts of Interest............................................................................................................................................................................. 10 

Recommendation of the Board of Directors.................................................................................................................................... 10 

Risk Factors........................................................................................................................................................................................... 10 

PART I PROXY RELATED INFORMATION..................................................................................................................................11 

Introduction........................................................................................................................................................................................... 11 

Solicitation of Proxies ......................................................................................................................................................................... 11 

Appointment of Proxyholders ............................................................................................................................................................ 11 

Revocation of Proxies ......................................................................................................................................................................... 11 

Advice to Beneficial Holders of Securities...................................................................................................................................... 12 

Exercise of Discretion by Proxyholders ........................................................................................................................................... 13 

Outstanding Voting Shares ................................................................................................................................................................. 13 

Record .................................................................................................................................................................................................... 13 

Shareholder Approval of Resolutions and Quorum....................................................................................................................... 13 

Principal Shareholders......................................................................................................................................................................... 13 

Risk Factors of Empire Iron’s Business........................................................................................................................................... 13 

PART II MATTERS TO B E ACTED ON AT THE MEETING ...................................................................................................18 

Presentation of the Financial Statements ......................................................................................................................................... 18 

Approval of the Qualifying Transaction.......................................................................................................................................... 18 

Reason for the EIW Acquisition...............................................................................................................................................18 

Recommendation........................................................................................................................................................................18 

Shareholder Approval................................................................................................................................................................18 

Election of Directors............................................................................................................................................................................ 19 

Appointment of Auditors.................................................................................................................................................................... 20 

Amendments to the Articles of the Corporation............................................................................................................................. 20 

Approval of Stock Option Plan.......................................................................................................................................................... 21 

Interest of Certain Persons in Matters to be Acted Upon.............................................................................................................. 21 

PART III INFORMATION CONCERNING THE ISSUER ..........................................................................................................22 

Corporate Structure .............................................................................................................................................................................. 22 

General Development of the Business.............................................................................................................................................. 22 

Financings ............................................................................................................................................................................................. 22 

Directors and Officers ......................................................................................................................................................................... 22 

Executive Compensation.................................................................................................................................................................... 23 

Compensation of Directors and Executive Officers of the Corporation...........................................................................23 

Selected Consolidated Financial Information and Management Analysis................................................................................. 23 

Information from Inception.......................................................................................................................................................23 

Management Analysis................................................................................................................................................................23 

i

Description of the Securities .............................................................................................................................................................. 24 

Common Shares..........................................................................................................................................................................24 

Preferred Shares.........................................................................................................................................................................24 

Stock Options Terms ..................................................................................................................................................................25 

Escrowed Common Shares ................................................................................................................................................................. 25 

Prior Sales.............................................................................................................................................................................................. 26 

Stock Exchange Price .......................................................................................................................................................................... 27 

Non-Arm's Length Party Transaction............................................................................................................................................... 27 

Interest of Insiders in Material Transactions................................................................................................................................... 27 

Legal Proceedings................................................................................................................................................................................ 27 

Auditors ................................................................................................................................................................................................. 27 

Transfer Agent and Registrar............................................................................................................................................................. 28 

Material Contracts................................................................................................................................................................................ 28 

PART IV INFORMATION CONCERNING EMPIRE IRON WORKS .....................................................................................29 

Name, Incorporation and Ownership.....................................................................................................................................29 

General Development of Business.................................................................................................................................................... 31 

General.........................................................................................................................................................................................31 

History..........................................................................................................................................................................................31 

Principal Products or Services................................................................................................................................................32 

Operations...................................................................................................................................................................................32 

Market..........................................................................................................................................................................................36 

Competitive Conditions.............................................................................................................................................................42 

Marketing Plans, Strategies and Future Developments......................................................................................................43 

Selected Empire Iron Financial Information and Management's Discussion and Analysis .................................................... 44 

Options Outstanding............................................................................................................................................................................ 47 

Warrants................................................................................................................................................................................................. 48 

Cash dividends declared..................................................................................................................................................................... 48 

Management Contracts............................................................................................................................................................52 

Related Party Transactions................................................................................................................................................................. 53 

Empire Iron Private Placement .......................................................................................................................................................... 53 

Legal Proceedings................................................................................................................................................................................ 53 

Material Contracts................................................................................................................................................................................ 53 

PART V INFORMATION CONCERNING THE RESULTING ISSUER .................................................................................54 

Corporate Structure .............................................................................................................................................................................. 54 

Name and Incorporation...........................................................................................................................................................54 

Narrative Description of the Business.............................................................................................................................................. 55 

Stated Business Objectives........................................................................................................................................................55 

Milestones....................................................................................................................................................................................55 

Description of Securities..................................................................................................................................................................... 55 

Pro Forma Consolidated Capitalization ........................................................................................................................................... 55 

Available Funds and Principal Uses ................................................................................................................................................. 57 

Available Funds..........................................................................................................................................................................57 

Principal Use of the Funds.......................................................................................................................................................57 

Dividends.....................................................................................................................................................................................57 

Principal Shareholders......................................................................................................................................................................... 58 

Directors, Officers and Promoters..................................................................................................................................................... 58 

Name, address, position and number of securities held......................................................................................................58 

Management................................................................................................................................................................................59 

Promoters.....................................................................................................................................................................................60 

Corporate Cease Trade Orders or Bankruptcies..................................................................................................................60 

Penalties, Sanctions or Undertakings.....................................................................................................................................60 

Individual Bankruptcies ............................................................................................................................................................60 

Conflicts of Interest............................................................................................................................................................................. 61 

Other Reporting Issuer Experience ................................................................................................................................................... 61 

Executive Compensation.................................................................................................................................................................... 61 

Indebtedness of Directors and Officers ............................................................................................................................................ 62 

ii

Investor Relations Arrangements ...................................................................................................................................................... 62 

Stock Options........................................................................................................................................................................................ 62 

Stock Option Plan ................................................................................................................................................................................ 63 

Escrowed Shares................................................................................................................................................................................... 63 

IPO Escrow Agreement .............................................................................................................................................................63 

Auditors, Transfer Agent and Registrar........................................................................................................................................... 65 

PART VI GENERAL MATTERS ..........................................................................................................................................................66 

Other Material Facts ............................................................................................................................................................................ 66 

Board of Directors Approval.............................................................................................................................................................. 66 

CERTIFICATE OF THE CORPORATION.......................................................................................................................................67 

CERTIFICATE OF EMPIRE IRON WORKS LTD. .......................................................................................................................68 

iii

GLOSSARY OF TERMS 

The following is a glossary of certain terms used in this Circular including the Summary. Terms and 

abbreviations used in the financial statements of the Corporation and in the Schedules to this Circular are defined 

separately and the terms and abbreviations defined below are not used therein, except where otherwise indicated. 

Words importing the singular, where the context requires, include the plural and vice versa and words importing 

any gender include all genders. All dollar amounts in this Circular are in Canadian dollars, unless otherwise 

stated. 

"ABCA" means the Business Corporations Act (Alberta); 

"Affiliate" means a company that is affiliated with another company as described below. 

A company is an "Affiliate" of another company if: 

(a) 

(b) 

one of them is the subsidiary of the other, or 

each of them is controlled by the same person. 

A company is "controlled" by a person if: 

(a) 

(b) 

voting securities of the company are held, other than by way of security only, by or for the benefit 

of that person, and 

the voting securities, if voted, entitle the person to elect a majority of the directors of the 

company. 

A person beneficially owns securities that are beneficially owned by: 

(a) 

(b) 

a company controlled by that person, or 

an Affiliate of that person or an Affiliate of any company controlled by that person. 

"Articles" means the original or restated articles of incorporation, articles of amendment, articles of 

amalgamation, articles of continuance, articles of reorganization, articles of arrangement, articles of dissolution 

and articles of revival and includes an amendment to any of them; 

"Associate" when used to indicate a relationship with a person or company, means 

(a) 

(b) 

(c) 

(d) 

an issuer of which the person or company beneficially owns or controls, directly or indirectly, 

voting securities entitling him to more than 10% of the voting rights attached to outstanding 

securities of the issuer, 

any partner of the person or company, 

any trust or estate in which the person or company has a substantial beneficial interest or in 

respect of which a person or company serves as trustee or in a similar capacity, 

in the case of a person, a relative of that person, including 

(i) 

(ii) 

that person’s spouse or child, or 

any relative of the person or of his spouse who has the same residence as that person; 

but 

1

(e) 

where the Exchange determines that two persons shall, or shall not, be deemed to be associates 

with respect to a Member firm, Member corporation or holding company of a Member 

corporation, then such determination shall be determinative of their relationships in the 

application of Rule D with respect to that Member firm, Member corporation or holding 

company. 

"Available Funds" means the funds that will be available to the Corporation on Completion of the Qualifying 

Transaction, as set out in "Part V – Information Concerning the Resulting Issuer – Available Funds and Principal 

Purposes"; 

"Business Day" means any day other than a Sunday, Saturday or a day on which banking institutions in Calgary, 

Alberta, are authorized or obligated by law to close; 

"CEO" means Chief Executive Officer; 

"Circular" means this management proxy circular dated May 18, 2006 together with all schedules and including 

the summary of this proxy circular, distributed by the Corporation in connection with the Meeting; 

"Closing" means the closing of the EIW Acquisition; 

"Common Shares" means the common shares of the Corporation, as presently constituted; 

"company", unless specifically indicated otherwise, means a corporation, incorporated association or 

organization, body corporate, partnership, trust, association or other entity other than an individual; 

"Completion of the Qualifying Transaction" means the date the Final Exchange Bulletin is issued by the 

Exchange in respect of the Corporation’s Qualifying Transaction; 

"Control Person" means any person or company that holds or is one of a combination of persons or companies 

that holds a sufficient number of any of the securities of the Corporation so as to affect materially the control of 

the Corporation, or that holds more than 20% of the outstanding voting securities of the Corporation except where 

there is evidence showing that the holder of those securities does not materially affect the control of the 

Corporation; 

"Corporation" means Ryjencap Inc., a corporation incorporated under the ABCA; 

"CPC" means a CPC within the meaning of Exchange Policy 2.4; 

“EIW Acquisition” means the acquisition of Ryjencap of all of the issued and outstanding securities of Empire 

Iron at the time of Closing; 

“EIW Private Placement” means a private placement financing by Empire Iron in conjunction with the 

Qualifying Transaction of Ryjencap for a total of $6,075,000; 

"Empire Iron" means Empire Iron Works Ltd., a private corporation subsisting under The Corporations Act 

(Manitoba); 

"Exchange" means the TSX Venture Exchange Inc.; 

"Final Exchange Bulletin" means the Exchange Bulletin which is issued following closing of the Qualifying 

Transaction and the submission of all required documentation and that evidences the final Exchange acceptance 

of the Qualifying Transaction. 

2

"Insider", if used in relation to the Corporation, means: 

(a) 

(b) 

(c) 

(d) 

a director or senior officer of the Corporation; 

a director or senior officer of a company that is an Insider or subsidiary of the Corporation; 

a Person that beneficially owns or controls, directly or indirectly, voting shares carrying more 

than 10% of the voting rights attached to all outstanding voting shares of the Corporation; or 

the Corporation itself if it holds any of its own securities. 

"IPO Escrow Agreement" means the escrow agreement entered into among Ryjencap, CIBC Mellon Trust 

Company and various security holders of Ryjencap, dated May 27, 2005; 

"Majority of the Minority Approval" means the approval of the Qualifying Transaction by the majority of the 

votes cast by Shareholders, other than: 

(a) 

(b) 

(c) 

Non-Arm’s Length Parties to the Corporation; 

Non-Arm’s Length Parties to the Qualifying Transaction; and 

in the case of a Related Party Transaction: 

(i) 

(ii) 

if the Corporation holds its own shares, the Corporation, and 

a person acting jointly or in concert with a person referred to in paragraph (a) or (b) in 

respect of the transaction 

at a properly constituted meeting of the Shareholders of the Corporation. 

"Meeting" means the annual and special meeting of shareholders to be held on June 15, 2006; 

"Notice of Meeting" means the notice of the annual and special meeting of the shareholders forming a part of 

this Circular; 

"Non-Arm’s Length Party" means in relation to a company, a promoter, officer, director, other Insider or 

Control Person of that company (including the Corporation) and any Associates or Affiliates of any of such 

Persons, and in relation to an individual, means any Associate of the individual or any company of which the 

individual is a promoter, officer, director, Insider or Control Person; 

"Non-Arm’s Length Parties to the Qualifying Transaction" means the Vendors and Empire Iron and includes, 

in relation to the Significant Assets, the Non-Arm’s Length Parties of the Vendors, and all other parties to or 

associated with the Qualifying Transaction and Associates or Affiliates of all such other parties. 

"Non-Arm’s Length Qualifying Transaction" means a proposed Qualifying Transaction where the same party 

or parties or their respective Associates or Affiliates control the CPC and the Significant Assets which are to be 

subject to the proposed Qualifying Transaction; 

"Option" means an option to purchase Common Shares issued under the Stock Option Plan; 

"ordinary resolution" means a resolution passed by a majority of the votes cast by the shareholders who voted 

in respect of that resolution; 

"person" means a company or individual; 

3

"Principal" means 

(a) 

(b) 

(c) 

(d) 

a Person who acted as a Promoter of the Corporation within two years before the Final Exchange 

Bulletin; 

a director or senior officer of the Corporation or any of its material operating subsidiaries at the 

time of the Final Exchange Bulletin; 

a 20% holder – a Person that holds securities carrying more than 20% of the voting rights 

attached to the Corporation’s outstanding securit ies immediately after the Final Exchange 

Bulletin; 

a 10% holder – a Person that 

(i) 

(ii) 

holds securities carrying more than 10% of the voting rights attached to the Corporation’s 

outstanding securities immediately after the Final Exchange Bulletin; and 

has elected or appointed, or has the right to elect or appoint, one or more directors or 

senior officers of the Corporation or any of its material operating subsidiaries. 

A company, more than 50% held by one or more Principals and a Principal’s spouse and relatives living 

at the same address as the Principal will also be treated as Principals and any securities of the 

Corporation held by this entity or person holds will be subject to escrow requirements. 

These percentages include, in all instances, securities that may be issued under outstanding convertible 

securities. 

"private placement" means an issuance from treasury of securities for cash without prospectus disclosure, in 

reliance on one or more of the exemptions under applicable securities laws, including the issuance of shares, 

convertible securities or debt; 

"Promoter" means 

(a) 

(b) 

a person or company, acting alone or in conjunction with one or more other persons or companies or a 

combination of them, that, directly or indirectly, takes the initiative in founding, organizing or 

substantially reorganizing the business of an issuer (within the meaning of the Alberta Securities Act), 

or 

a person or company that, directly or indirectly, receives in consideration of services or property, or 

both, 

(i) 10% or more of any class of securities of the issuer, or 

(ii) 10% or more of the proceeds from the sale of any class of securities of a particular issue, 

in connection with the founding, organizing or substantial reorganizing of the business of the issuer, but 

does not include a person or company that receives securities or proceeds solely 

(iii) as underwriting commissions, or 

(iv) in consideration of property transferred to the issuer, if that person or company does not otherwise 

take part in founding, organizing or substantially reorganizing the business; 

"Proxy" means the form of proxy that accompanies this Circular; 

"Qualifying Transaction" means, generally, a transaction where a CPC acquires Significant Assets, other than 

cash, by way of purchase, amalgamation, merger or arrangement with another company by other means; 

4

"Resulting Issuer" means the Corporation as it exists upon issuance of the Final Exchange Bulletin; 

"Ryjencap" means Ryjencap Inc. (the Corporation); 

"Significant Asset" means, generally, one or more assets or businesses which, when purchased, optioned or 

otherwise, acquired by the Corporation together with any other concurrent transactions, results in the Corporation 

meeting the minimum listing requirements of the rules of policies of the Exchange; 

"special resolution" means a resolution passed by a majority of not less than 2/3 of the votes cast by the 

shareholders who voted in respect of that resolution or signed by all the shareholders 

"Sponsor" has the meaning specified in Exchange Policy 2.2 – Sponsorship and Sponsorship Requirements; 

"Stock Option Plan" means the Corporation’s stock option plan being submitted for approval by the 

shareholders of the Corporation at the Meeting; 

"Target Company" means a company to be acquired by a CPC as its Significant Asset pursuant to a Qualifying 

Transaction; 

"Transaction Escrow Agreement" means the Escrow Agreement to be entered into in connection with the 

Completion of the Qualifying Transaction, pursuant to Exchange Policy 5.4; and 

"Vendors" means one or all of the beneficial owners of the Significant Assets (other than a Target 

Company(ies). 

5

SUMMARY OF THE INFORMATION CIRCULAR 

The following is a summary of information relating to Ryjencap, Empire Iron and the Resulting Issuer established 

on Completion of the Qualifying Transaction and should be read together with the more detailed information as 

well as the financial statements contained elsewhere in this Circular. 

The Issuer 

Ryjencap Inc. was incorporated by Certificate of Incorporation issued pursuant to the provisions of the ABCA on 

January 18, 2005. Ryjencap is a company whose purpose is to identify and evaluate opportunities for the 

acquisition of Significant Assets with a view to completing a Qualifying Transaction, allowing it to list itself at 

the Exchange as a regular issuer. To date, Ryjencap has had no material operations of any kind. 

The Corporation completed its initial public offering on June 29, 2005, pursuant to which it raised gross proceeds 

of $1,000,000. The Common Shares were initially listed and posted for trading on the Exchange on July 14, 

2005, under the symbol RYJ.P. On the day the Common Shares of Ryjencap last traded prior to the 

announcement of Ryjencap's Qualifying Transaction (March 15, 2005), the closing price was $0.11. 

The Meeting 

The Meeting will be held on June 15, 2006, 10:00 a.m. (Calgary time) in the main boardroom of McLeod & 

Company, LLP, located at 850, 410 - 9 Ave. SW, Calgary AB T2P 3C5. The Meeting has been called for the 

following purposes: 

1. to consider and, if thought appropriate, pass, with or without variation, a resolution of the disinterested 

shareholders to approve, as the Corporation’s Qualifying Transaction, the acquisition of all of the issued 

and outstanding share of Empire Iron Works Inc., all as more fully disclosed in the management proxy 

circular dated May 18, 2006 (the "Circular") accompanying, and forming part of, this Notice; 

2. subject to the approval of the Qualifying Transaction, to fix the number of directors to be elected at the 

Meeting at four, and to elect the board of directors of the Corporation to serve until the next annual 

meeting of the Corporation or until their successors are duly elected or appointed; 

3. subject to the approval of the Qualifying Transaction, to consider and, if thought appropriate, pass an 

ordinary resolution appointing Scarrow & Donald LLP as auditor of the Corporation and authorizing the 

directors to fix their remuneration; 

4. subject to the approval of the Qualifying Transaction, to consider and, if thought appropriate, pass, with 

or without variation, a special resolution approving the consolidation of the currently issued and 

outstanding common shares on the basis of one "new" common share for each four "old" common shares; 

5. subject to the approval of the Qualifying Transaction to consider and, if thought appropriate, pass, with or 

without variation, a special resolution approving the change of name of the Corporation to "Empire 

Industries Ltd.", or such other name as may be selected by the directors and may be acceptable to 

applicable regulatory authorities; 

6. subject to the approval of the Qualifying Transaction to consider and, if thought appropriate, pass, with or 

without variation, a special resolution approving the amendment of the Articles of Incorporation of the 

Corporation to allow meetings of shareholders to be held at any place in Canada; 

7. to consider and, if thought appropriate, to pass, with or without variation, an ordinary resolution 

approving the Stock Option Plan; and 

8. to transact such other business as may properly come before the Meeting or any adjournment or 

adjournments of the Meeting. 

6

The Qualifying Transaction 

Letter Agreement 

On March 9, 2006, Ryjencap entered into a letter agreement pursuant to which Ryjencap proposes to acquire all 

of the issued and outstanding shares of Empire Iron, subject to certain conditions, including approval of the 

Exchange (the "EIW Acquisition"). Ryjencap and the shareholders of Empire Iron will enter into a formal 

agreement in respect of the EIW Acquisition (the "Acquisition Agreement") containing customary terms, 

conditions, representations and warranties for this type of transaction. 

Empire Iron had 32,500,000 shares issued and outstanding prior to the EIW Private Placement. On May 9, 2006, 

Empire Iron completed a private placement of 13,500,000 common shares (the "EIW Private Placement"). In 

addition to these shares, there will be 300,000 Empire Iron shares issued to Bretman Financial Corporation 

(finder's fee). Bretman Financial Corporation is controlled by Faryl Perkins who is the spouse of Gary Perkins. 

Mr. Gary Perkins is a principal of Surefund Capital Corporation, the company the Resulting Issuer intends to 

engage for investor relation services on Completion of the Qualifying Transaction (see also, “Part V Information 

Concerning the Resulting Issuer - Investor Relations Arrangements”). 

The Corporation's 12,000,000 Common Shares issued and outstanding at the time of EIW Acquisition will be 

consolidated on the basis of one "new" common share for each four "old" Common Shares. Currently outstanding 

options for directors and officers to acquire 1,200,000 Common Shares and outstanding options to Canaccord 

Capital Corporation will also be adjusted on the same basis. It is expected that Ryjencap will issue a maximum of 

46,300,000 post-consolidated Common Shares for the EIW Acquisition. In addition, there will be 3,000,000 postconsolidated 

Common Shares of Ryjencap issued and outstanding for a total maximum of 49,300,000 postconsolidated 

Common Shares issued and outstanding on Completion of the Qualifying Transaction. 

The Target Company 

Empire Iron is a private Manitoba corporation which has its registered office and principal place of business 

located in Winnipeg, Manitoba. 

Factors Considered 

The board of directors of the Corporation has concluded that the EIW Acquisition with Empire Iron as the 

Corporation’s Qualifying Transaction would be in the best interest of the shareholders. In order to arrive at such 

conclusion, the following factors were considered: (i) the growth strategy for Empire Industries, (ii) the business 

prospects for Empire Iron and the financial projections, (iii) the successful past experience of the officers and 

directors and (iv) the risk factors and the solutions proposed in order to address them. 

Conditions Precedent to the Qualifying Transaction 

The closing of the Qualifying Transaction is subject to the satisfaction of various conditions, including, but not 

limited to: (i) the satisfactory conclusion of a due diligence, (ii) the approval of the Qualifying Transaction by all 

regulatory bodies having jurisdiction, including the Exchange, (iii) the approval of the Qualifying Transaction by 

the shareholders of the Corporation by Majority of the Minority Approval, and (iv) the completion of the EIW 

Private Placement. 

Interest of Insiders, Promoters or Control Persons of the Issuer 

Other than as set out in this Circular, none of the directors or senior officers of the Corporation, nor any person 

who has held such a position since the beginning of the last completed financial year of the Corporation, nor any 

proposed nominee for election as a director of the Corporation, has any material interest, direct or indirect by way 

7

of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting. (See “Part V – 

Information Concerning the Resulting Issuer – Conflicts of Interests”) 

Non-Arm’s Length Qualifying Transaction 

The Qualifying Transaction does not constitute a Non-Arm’s Length Qualifying Transaction. The parties 

to the Qualifying Transaction are not Non-Arm’s Length Parties. 

Available Funds 

Upon Completion of the Qualifying Transaction, the Available Funds to the Resulting Issuer will be as set out in 

the following table , including the EIW Private Placement ($6,075,000), from the following sources: 

Source 

Funds 

Ryjencap working capital as at February 28, 2006 $800,000 

Empire Iron working capital as at March 31, 2006 (1) $3,567,500 

Proceeds from EIW Private Placement $6,075,000 

(1) Based on management prepared financial statements. 

Principal Use of the Funds 

Total $10,442,500 

The Resulting Issuer intends to use part of the Available Funds for the following purposes, listed by order of 

priority, assuming completion of the EIW Placement: 

Proposed Use 

Amount 

Acquisitions $3,000,000 

Debenture repayments $1,220,000 

Facility expansion at owned site in Alberta $2,000,000 

Commissions and closing costs $600,000 

Working capital $3,622,500 

Total $10,442,500 

The Resulting Issuer intends to use the Available Funds for the purposes mentioned above, once the Qualifying 

Transaction has been completed, however, it is possible that, for valid commercial reasons, the Available Funds 

will be reallocated to take advantage of current business opportunities. Funds received as a result of the exercise 

of options to acquire Common Shares will be allocated to the Resulting Issuer’s general working capital. 

Selected Financial Information 

The following table sets out certain financial information regarding Ryjencap once the Qualifying Transaction and 

other adjustments have occurred. The following information should be read in conjunction with the audited 

financial statements of Ryjencap for the period ended August 31, 2005, attached to this Circular as Schedule 

"B", the unaudited financial statements of Ryjencap for the period ended February 28, 2006, attached to this 

8

Circular as Schedule "C", the audited financial statements of Empire Iron for the years ended December 31, 

2005, and December 31, 2004, and the unaudited financial statements for the year ended December 31, 2003, 

attached to this Circular as Schedule "D", and the pro forma financial statements for Empire Iron as at December 

31, 2005, attached to this Circular as Schedule "E". 

ASSETS 

Proforma - Post 

Qualifying 

Transaction and 

(1) (2) 

Financing 

CURRENT ASSETS $ 25,500,727 

LONG TERM ASSETS $ 6,823,798 

$ 32,324,525 

LIABILITIES AND SHAREHOLDERS' EQUITY 

CURRENT LIABILITIES $ 17,492,202 

LONG TERM LIABILITIES $ 3,094,175 

$ 20,586,377 

SHAREHOLDERS' EQUITY 

Capital Stock $ 11,864,494 

Deficit $ (126,346) 

$ 11,738,148 

$ 32,324,525 

(1) See the notes to the pro forma financial statements included as Schedule “E” for assumptions and adjustments. The pro forma financial statements 

may not reflect the financial situation that would have been obtained if the events contemplated in this Circular had been effective at the dates 

indicated or the forecasted financial situation for the coming periods. 

(2) Includes $6,075,000 from the EIW Private Placement and $1,600,000 from the private placement completed on April 24, 2006. 

Conditional Listing Approval 

Subject to the Corporation filing certain documents, the Exchange has conditionally approved the Qualifying 

Transaction. 

Interests of Professionals 

None of McLeod & Company LLP, counsel to Ryjencap, or Scarrow & Donald LLP, the proposed auditor for the 

Resulting Issuer, or any director, officer employee or partner of these parties received or will receive a direct or 

indirect interest in the property of the Resulting Issuer or of any associate or affiliate of the Resulting Issuer. As 

at the date of this Circular, each of these partnerships and all directors, officers, employees and partner thereof, 

beneficially own, respectively, directly or indirectly, less than 1% of the securities of each of Ryjencap and 

Empire Iron, and their respective associates and affiliates. In addition, and except as disclosed in this Circular, no 

other director, officer, employee of any of these partnerships or companies is currently expected to be elected, 

appointed or employed as a director, senior officer or employee of the Resulting Issuer or of an associate or 

9

affiliate of the Resulting Issuer, or as a promoter of any such entity or of an associate or affiliate of any such 

entity. 

Conflicts of Interest 

There are potential conflicts of interest to which the officers and directors of the Corporation will be subject in 

connection with the operations of the Corporation. The officers and directors are engaged and will continue to be 

engaged in businesses on their own behalf and situations may arise where these officers and directors will be in 

direct competition with the Corporation. Conflicts, if any, will be subject to the procedures and remedies under 

the ABCA. (see Part V - “Information Concerning the Resulting Issuer – Conflicts of Interest”). 

Recommendation of the Board of Directors 

The board of directors of the Corporation has unanimously determined that the Completion of the Qualifying 

Transaction is in the best interests of the Corporation and is fair to the shareholders of the Corporation. The 

directors have authorized the submission of the Qualifying Transaction to the shareholders of the Corporation for 

approval. 

Risk Factors 

The Resulting Issuer will be subject to numerous risk factors, including those outlined under the heading “Part I – 

Proxy Related Information - Risk Factors”. 

10

PART I 

PROXY RELATED INFORMATION 

Introduction 

This proxy circular is furnished in connection with the solicitation of proxies by and on beha lf of management of 

the Corporation for use at the Meeting to be held on June 15, 2006, at the time and place and for the purposes set 

out in the accompanying Notice of Meeting, and any adjournment thereof. No person has been authorized to give 

any information or make any representation in connection with any matters to be considered at the meeting, other 

than as contained in this management proxy circular and, if given or made, any such information or representation 

must not be relied upon as having been authorized by the Corporation. 

Solicitation of Proxies 

Management of the Corporation is mailing this Circular to those shareholders entitled to receive notice of the 

Meeting. Proxies may also be solicited personally or by telephone by directors or officers of the Corporation at 

no additional cost. In accordance with National Instrument 54-101, arrangements have been made with brokerage 

houses and other intermediaries, clearing agencies, custodians, nominees and fiduciaries to forward solicitation 

materials to the beneficial owners of the Common Shares held of record by such persons and the Corporation 

shall reimburse such persons for reasonable fees and out-of-pocket expenses incurred by them in so doing. The 

cost of any solicitation will be borne by the Corporation. 

Appointment of Proxyholders 

The individuals named in the accompanying form of Proxy, namely Terry Rogers and Mark Ferguson are officers 

and/or directors of the Corporation and the management designees, and each has indicated his willingness to 

represent as proxy any Shareholder who may appoint him. A shareholder has the right to appoint some other 

person, who need not be a shareholder, to represent the shareholder at the Meeting by inserting such person’s 

name in the blank space provided in the Proxy and striking out the names of the management designees, or by 

completing another proper form of proxy. 

The instrument appointing a Proxy must be in writing and be signed by the shareholder or his attorney, 

duly authorized in writing, or, where the shareholder is a company, by a duly authorized officer or 

attorney of the company. If the Proxy is executed by an attorney for an individual shareholder or by an 

officer or attorney of a corporate shareholder, the instrument so empowering the officer or attorney, or a 

notarized copy thereof, must accompany the Proxy. An instrument of Proxy will only be valid if it is duly 

completed, signed, dated and returned to CIBC Mellon Trust Company, Suite 600, 333 - 7 Avenue SW, 

Calgary, Alberta, T2P 2Z1, not later than 48 hours (excluding Saturdays, Sundays and holidays) before the 

time set for the Meeting or any adjournment thereof, or delivered to the Chairman of the Meeting prior to 

the commencement of the Meeting or any adjournment of the Meeting . 

Revocation of Proxies 

A shareholder has the right to revoke a Proxy by, in addition to any manner of revocation permitted by law, 

delivering an instrument in writing, executed by the Shareholder or by the shareholder’s attorney authorized in 

writing or, where the shareholder is a company, by a duly authorized officer or attorney of the company and 

delivered at any time up to and including the last Business Day preceding the day of the Meeting, or any 

adjournment thereof, at which the Proxy is to be used, either to the registered office of the Corporation or to CIBC 

11

Mellon Trust Company, Suite 600, 333 - 7 Avenue SW, Calgary, Alberta, T2P 2Z1, or with the Chairman of the 

Meeting prior to commencement of the Meeting, or any adjournment thereof before any vote in respect of which 

the Proxy to be used shall have been taken. 

Advice to Beneficial Holders of Securities 

The information set out in this section is of significant importance to many shareholders of the Corporation, as a 

substantial number of shareholders do not hold shares in their own name. Shareholders who do not hold their 

shares in their own name (referred to in this Circular as "Beneficial Shareholders ") are advised and should note 

that only Proxies deposited by shareholders whose names appear on the records of the Corporation as the 

registered holders of Common Shares can be recognized and acted upon at the Meeting. If 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 the shareholder’s name on the records of the Corporation. Such shares will more likely be registered 

under the name of the shareholder’s broker or an agent or nominee of that broker. In Canada, most of such shares 

are registered under the name of CDS (the registration name for The Canadian Depositary for Securities Limited, 

which acts as depositary for many Canadian brokerage firms). 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 or nominees are prohibited from voting shares for the broker's clients. The 

directors and officers of the Corporation do not know for whose benefit the Common Shares registered in the 

name of CDS are held, therefore, Beneficial Shareholders should ensure that instructions respecting the voting of 

their Common Shares are communicated to the appropriate person. 

Applicable regulatory policies require intermediaries/brokers to seek voting instructions from Beneficial 

Shareholders in advance of shareholders’ meetings. Every intermediary/broker has its own mailing procedures 

and provides to clients its own return instructions, which should be carefully followed by Beneficial Shareholders 

in order to ensure that their 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 to registered Shareholders, however, its 

purpose is limited to instructing the registered shareholder (broker, or agent or nominee 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 Independent Investor Communications Corporation ("ADP"). ADP 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 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 a Proxy with an ADP sticker on it cannot use that Proxy to vote his or her shares directly at 

the Meeting. The Proxy must be returned to ADP well in advance of the Meeting in order to have the shares 

voted at the Meeting. 

Although a Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of voting 

shares registered in the name of his or her broker (or an agent or nominee of the broker), a Beneficial Shareholder 

may attend the Meeting as proxyholder for the registered shareholder and vote the shares in that capacity. 

Beneficial Shareholders who wish to attend the Meeting and indirectly vote their shares as proxyholders for the 

registered shareholder, should enter their own names in the blank space on the form of Proxy provided to them 

and return the same to their broker (or the broker’s agent or nominee) in accordance with the instructions provided 

by such broker (or agent or nominee), well in advance of the Meeting. 

The Circular provides a detailed description of the Qualifying Transaction, the Meeting and the 

Corporation. Please give this material your careful consideration, and, if you require assistance, consult 

your financial, income tax or other professional advisor. 

12

Exercise of Discretion by Proxyholders 

The enclosed Proxy confers discretionary authority upon the holders named therein with respect to amendments 

to, or variations of, matters identified in the Notice of Meeting and other matters not so identified which may 

properly be brought before the Meeting. At the date of this Circular, management knows of no such amendments, 

variations or other matters to come before the Meeting. If any other matter comes before the Meeting, the 

persons named in the Proxy will vote in accordance with their judgment on such matter. 

Outstanding Voting Shares 

The Corporation has authorized capital consisting of an unlimited number of Common Shares and Preferred 

Shares, all without nominal or par value. The only shares of the Corporation that have been issued, as at the date 

of this Circular, are 12,000,000 Common Shares. The holders of Common Shares are entitled to one vote for each 

Common Share held. 

Record 

The board of directors of the Corporation has fixed the close of business on April 26, 2006, as the record date (the 

"Record Date ") for the purposes of determining the holders of Common Shares entitled to receive notice of and 

to vote at the Meeting. In accordance with the provisions of the ABCA, the Corporation has prepared a list of the 

holders of Common Shares on the Record Date. A person named in the list is entitled to vote the shares shown 

opposite his name at the meeting to which the list relates, except to the extent that, (a) the person has transferred 

the ownership of any of his shares after the record date, and (b) the transferee of those shares (i) produces 

properly endorsed share certificates, or (ii) otherwise establishes that he owns the shares, and demands, not later 

than 10 days before the meeting, that his name be included in the list before the meeting, in which case the 

transferee is entitled to vote his shares at the meeting. 

Shareholder Approval of Resolutions and Quorum 

Approval of any matter that is submitted to a vote of shareholders at the Meeting by ordinary resolution is, unless 

otherwise indicated in this Circular, by simple majority (affirmative vote of at least 50% plus one) of the votes 

cast thereon. Approval of any matter that is submitted to a vote of shareholders at the meeting by special 

resolution is by special majority (affirmative vote of at least 2/3 of the votes cast). With respect to the Qualifying 

Transaction, the resolution must be approved by Majority of the Minority Approval. A quorum at the Meeting 

will consist of at least one person present in person, who is a shareholder entitled to vote at the Meeting, or Proxy 

or representative for an absent shareholder entitled to vote at the Meeting, holding not less than 5% of the issued 

and outstanding Common Shares. 

Principal Shareholders 

To the knowledge of the directors and senior officers of the Corporation, as of the date of this Circular, there are 

no shareholders (other than securities depositories) who beneficially own, directly or indirectly, or exercise 

control or discretion over voting securities carrying more than 10% of the voting rights attached to any class of 

voting securities of the Corporation. 

Risk Factors of Empire Iron’s Bus iness 

Operating Results 

Empire Iron (or, the “Company”) may experience fluctuations in future quarterly operating results that may be 

caused by many factors, including: (i) changes in the level of contract awards such that ongoing fixed operating 

expenses are not recovered, and (ii) competitive factors. Consequently, Empire Iron believes that period-to- 

13

period comparisons of its operating results will not necessarily be meaningful and should not be relied upon as an 

indication of future performance. It is likely that Empire Iron's future quarterly operating results from time to 

time will not meet the expectations of securities analysts or investors, which may have a material adverse effect 

on the market price of the Resulting Issuer's shares. 

There is no assurance that Empire Iron will earn profits in the future, or that profitability will be sustained. Steel 

design and fabrication businesses typically require significant financial resources, and there is no assurance that 

future revenues will be sufficient to generate the funds required to continue Empire Iron’s business development 

and marketing activities. Empire Iron has been in business for over forty years and management believes it has 

developed systems, policies and procedures to mitigate this risk. 

Reliance on Key Personnel 

If the proposed Qualifying Transaction is approved, the Resulting Issuer will carry on the business of structural 

steel design, fabrication and erection. This business involves a certain degree of risk which even a combination of 

experience, knowledge and diligence may not be able to overcome. Shareholders must rely on the ability, 

expertise, judgment, direction and integrity of the management of Empire Iron. The Resulting Issuer’s success 

will be dependent on the services of a number of key personnel, including its executive officers and other key 

employees, the loss of any one of whom could have an adverse effect on its operations and business prospects. 

The Resulting Issuer's future performance is dependent on the services of Guy Nelson, Chairman and CEO, 

Campbell McIntyre, President and CFO, and Thor Gaul, Vice President Operations. The Resulting Issuer will 

have employment agreements with Messrs. Nelson, McIntyre and Gaul. In addition, the Resulting Issuer's 

continued success will depend heavily on its ability to attract and retain highly qualified engineering, project 

management and technical support, skilled trades personnel for the shop and field construction operations, 

marketing and sales personnel. Failure to hire and retain such personnel could have a material adverse effect. The 

Corporation feels that by becoming a publicly traded company it will have more flexibility than its other private 

competitors to implement attractive incentive plans for key employees to attract and retain the necessary 

employees. 

Labour Relations 

The primary value-added component of the structural steel fabrication business is the conversion of structural 

steel and associated miscellaneous steel products into fully fabricated, installed structures for the non-residential 

construction sector of the economy. This conversion process employs skilled tradespersons in the controlled 

environment of a fabrication facility. It also employs machinery and equipment to perform the required 

fabricating activities, such as; steel cleaning, cutting, punching, drilling, welding, coping, painting, steel member 

identification. The Company also provides structural steel field installation services with skilled tradespersons. 

Again, this is considered a primary value-added service provided by the Company. The cost of skilled 

tradespersons in the field and shop is subject to multi-year, collective agreements with a variety of unions. The 

increasing shortage of skilled tradespersons in the steel fabrication industry is increasing the wage expectations 

and concessions of all steel fabricators, especially those companies that provide their services closest to the active 

markets (such as Alberta). 

The largest component of the Company’s overall expenses is salary, wages and benefits. Any significant increase 

in these expenses could impact the financial results of the Company. In addition, the Empire Iron is at risk if 

there are any labour disruptions. Each of its four unionized shop facilities is subject to its own collective 

agreement. In addition, the field erection business activity is subject to three different collective agreements. 

Management feels the staggering and independence of each collective mitigates the issue of work stoppage that 

may arise at any one location. The Company also believes it has fostered a positive relationship with its workers 

as is evidenced by zero work stoppages over 40 years of operations. 

14

Cost of Raw Material 

The principal cost of raw material is structural steel and associa ted other steel products used for bracing and joint 

connections. Steel costs can approximate as high as 40 percent of any given job. A typical sales process for the 

custom structural steel fabrication business would be for a job to be tendered by the owner or the owner’s 

engineer or a general contractor working on behalf of the owner. Jobs being tendered in the ICI sector tend to 

restrict the potential bidders to those that have been pre-qualified in terms of their competency. Pre-qualified 

custom fabricators would, as part of the estimating process, determine how much and what type of steel is 

required, and as part of the bidding process, ensure that the required steel is readily available at an agreed price for 

the specific job being tendered. These supply and pricing arrangements are negotiated directly with steel 

manufacturers or steel supply companies that buy and warehouse steel products. Therefore, management is of the 

view that, the cost of the raw material tends to be a fully reimbursed cost. This is particularly critical because of 

the ongoing fluctuations in the commodity price of steel. 

Competitive Market 

Empire Iron encounters and expects to continue to encounter competition in the structural steel fabrication market 

that services the non-residential construction industry. Competitors tend to be based in Western Canada and are 

virtually all privately or family owned businesses. From time to time, competitors out of Korea, Ontario and 

Quebec have bid on work and been awarded work in Western Canada. Incremental transportation costs, 

scheduling issues and quality standards have tended to make these options less attractive to owners and owners’ 

engineers. 

Due to the competitive nature of the business, the Corporation must compete on price and quality of service. A 

significant portion of the Company’s business is to provide a contracted scope of work to clients on a fixed price 

or unit price basis. There can be no assurance that the fixed price commitment adequately recovers the full cost of 

providing the contracted scope of work. Nor can there be any assurance that the contracted scope of work is so 

clear as to prevent disagreements over the interpretation of what has been contracted for. Management is of the 

view that the Company’s over forty years of experience in the industry provides it with the necessary expertise to 

resolve any disputes that may arise in a manner that is satisfactory to the Company’s overall requirements. 

Non-residential Construction Activity in Western Canada 

The demand for fabricated structural steel tends to fluctuate directly with non-residential construction activity. A 

decline in the demand for fabricated structural steel products can occur if deteriorating economic conditions 

reduce non-residential capital expenditures which could have an adverse effect on the Resulting Issuer’s business, 

results of operations and financial condition. 

Empire Iron’s business is primarily influenced by the overall level of capital spending in the mining and oil and 

gas industries in Western Canada. The Company’s activity level is therefore dependent on oil and gas prices and 

commodity prices. Lower commodity prices results in lower corporate profits which provides less available funds 

for spending on capital projects. 

Technological Change 

Extensive advances in specialized software have been made that, if deployed successfully, can increase the 

productivity of the employees and the profitability of the structural steel fabrication companies. This software has 

been designed to perform the following operational duties of the business; 

• estimating steel bill of materials and labour hours required for a job, electronic drafting of 

detailed fabrication drawings, 

15

• downloading of electronic shop drawings to specialized CNC machinery and equipment that will 

perform repetitious steel conversion activities (cutting, drilling, coping, burning, punching, 

automatic welding) 

• inventory purchasing and management and document and production control 

• job costing and comparison to estimates made for labour, materials, steel, and machinery time 

usage 

Empire Iron assesses the “labour/capital” tradeoff that is associated with the increased usage of software to 

enhance employee productivity and increase profitability. Management’s view is that the increasing cost of 

labour and the expected tight supply of skilled tradespersons has now reached a stage where a number of prudent 

capital expenditures can be made that have very rapid paybacks to help mitigate the shortage of skilled 

tradespersons available in the shops. Management is also of the view that its multi-shop, multi-provincial 

strategy helps mitigate this problem because the shortage of skilled tradespersons varies significantly in 

Edmonton, Vancouver, Winnipeg and Welland. 

Contract Work 

Empire Iron has been delivering structural steel fabrication and industrial construction services for many years 

and the nature of the majority of the contracts awarded and performed are done on a “lump-sum” or “fixed price” 

basis. In other words, a scope of work is performed by Empire Iron and a product deliverable commitment is 

contractually agreed to. Empire’s reputation depends on its ability to perform its contractual obligations. There 

have been instances where the cost of delivering the contracted scope exceeds the contracted payments. There 

have also been instances where there are disagreements over what the contracted scope actually is. 

Notwithstanding these potential circumstances, Empire Iron has a policy of performing the required scope of 

work first to the best of its ability and if any contract dispute should arise, document it appropriately and resolve it 

with the client after the job is complete. 

Public Company Scrutiny and Performance Requirements 

After the Completion of the Qualifying Transaction, the Resulting Issuer may be affected by the possible 

volatility of its stock price. The shareholders of the Resulting Issuer will be shareholders of a public company 

and their ability to sell their shares at their initial purchase price or at a profit may be limited by market factors. 

Completion of the Qualifying Transaction 

The completion of the proposed Qualifying Transaction is subject to the receipt of shareholder approval from 

Ryjencap Inc. and Empire Iron, and is also subject to the approval of the Exchange, which approvals may not be 

obtained. 

Additional Funding Requirements/Ability to Continue as a Going Concern 

Empire Iron’s cash flow may not be sufficient to fund its ongoing activities at all times. From time to time, the 

Company may require additional financing. Failure to obtain such financing on a timely basis could cause the 

Company to miss certain acquisition opportunities or reduce its operations. If Empire Iron’s revenues decrease, it 

will affect the its ability to expend the necessary capital to maintain its operations 

If additional financing is raised by the issuance of shares or other forms of convertible securities from treasury, 

control of Empire Iron may change and shareholders may suffer additional dilution. If adequate funds are not 

available, or are not available on acceptable terms, Empire Iron may not be able to take advantage of 

opportunities, or otherwise respond to competitive pressures and remain in business. 

16

Interest/Financing 

Empire Iron had $1,818,418 term loans as at December 31, 2005, subject to fixed principal and interest payments. 

It may encounter difficulty in servicing these payments if activity levels drop off significantly in the future. The 

Company feels that this level of term debt is appropriate for its forecasted level of business activity and 

profitability. 

At December 31, 2005, Empire Iron had an authorized operating line of credit (“Operating Loan”) totaling 

$7,500,000 to fund current operations. At December 31, 2005, $4,565,000 was drawn on the Operating Loan. The 

Operating Loan bears interest at the bank prime rate plus 1.75 percent. Due to the significantly high level of 

activity in 2005, a “bulge” facility of the Operating Loan was agreed to by its principal lender. This “bulge” 

amount is for a term period only, to the extent that the Operating Loan will be reduced to $4,500,000 as at May 

15, 2006. The facility is renewable annually based on Empire Iron maintaining compliance with standard debt 

covenants. The facility is secured by a general security agreement covering all of the Company’s assets. 

There can be no assurance that the principal lender will continue with its present arrangement in respect of 

covenants and margining. Management is of the view that its growth plan, financing plan and current financial 

period profitability will all combine to restore and strengthen the balance sheet. 

Environment/Regulatory 

Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger 

fines and liability and potentially increased capital expenditures and operating costs. The discharge of paint from 

the Empire Iron operations may give rise to liabilities to governments and third parties and may require the 

Company to incur costs to remedy such discharge. Although the Company believes that it is in material 

compliance with current applicable environmental regulations, no assurance can be given that environmental laws 

will not result in an increase in the costs of the its activities or otherwise adversely affect the Company’s financial 

condition, results of operations or prospects. 

Empire Iron maintains insurance consistent with industry practice to protect against losses due to sudden and 

accidental environmental contamination, accidental destruction of assets, and other operating accidents or 

disruption. The Company also has operational and emergency response procedures, and safety and environmental 

programs in place to reduce potential loss exposure. Empire Iron believes that it is in substantial compliance, in 

all material respects, with all current environmental legislation and is taking such steps as it believes are prudent 

to ensure that compliance will be maintained. 

Currency Fluctuations 

Empire Iron has exported some fabricated steel products over the years to the United States, but generally 

speaking this has aggregated less than 5% of revenue in any given year. The duration of most contracts is less 

than three months, so large currency fluctuations tend not to be a material concern. 

17

PART II 

MATTERS TO BE ACTED ON AT THE MEETING 

The Meeting has been called for the shareholders of the Corporation to consider and, if thought appropriate, to 

pass resolutions, as required, in relation to the following matters. To the knowledge of the directors of the 

Corporation, the only matters to be dealt with at the Meeting are those matters set out in the accompanying Notice 

of Meeting and detailed below. 

Presentation of the Financial Statements 

The audited financial statements of the Corporation for the year ended August 31, 2005, and the auditor's report, 

which have been mailed to shareholders, shall be presented at the Meeting. These audited financial statements 

have been approved by the board of directors and a copy of these statements are attached to this Circular as 

Schedule "B". Shareholders will not be required to vote on these financial statements. 

Approval of the Qualifying Transaction 

Pursuant to the Acquisition Agreement, the Corporation has agreement to acquire all of the issued and outstanding 

share of Empire Iron. 

Reason for the EIW Acquisition 

The principal reason for the EIW Acquisition is it will constitute a Qualifying Transaction of Ryjencap within the 

meaning of the Policy. After considering the terms of the EIW Acquisition and certain other factors, the board of 

directors of Ryjencap approved the terms of the EIW Acquisition Agreement. 

Recommendation 

The board of directors of Ryjencap unanimously recommends that the shareholders of Ryjencap vote in 

favour of the EIW Acquisition. 

Shareholder Approval 

At the Meeting, shareholders of Ryjencap will be asked to consider and, if thought fit, to pass the following 

special resolution (the “EIW Acquisition Resolution”), approving the EIW Acquisition: 

"IT IS RESOLVED THAT: 

1. the acquisition of all the outstanding shares of Empire Iron Works Ltd. ("Empire Iron"), 

as more fully described in the proxy circular dated May 18, 2006, be and the same is approved as 

the Corporation’s Qualifying Transaction; 

2. following the consolidation of the Corporation's common shares on the basis of one 

"new" common share for each four "old" common shares, the Corporation is authorized to reserve 

for issuance up to 46,300,000 post-consolidated Common Shares in consideration of the 

Corporation’s acquisition of all the outstanding shares of Empire Iron; and 

3. any one director or officer of the Corporation is authorized and directed to do and 

perform all such acts and things and to execute and deliver or cause to be executed and delivered, 

for, in the name of and on behalf of the Corporation all such agreements, instruments and other 

documents as in such individual’s opinion may be necessary or desirable to carry out the terms of 

this resolution." 

18

For the Qualifying Transaction to be implemented, this resolution must be passed, with or without variation, by 

Majority of the Minority Approval. If named as proxy, the management designees of Ryjencap intend to vote 

the Common Shares represented by such proxy at the Meeting for the approval of the EIW Acquisition 

Resolution, unless otherwise directed in the instrument of proxy. 

Election of Directors 

The board of directors of the Corporation currently consists of five directors. Management intends to bring before 

the Meeting a proposal to fix the number of directors to be elected at this meeting to four. The ordinary resolution 

sought to be passed is as follows: 

"IT IS RESOLVED THAT the number of directors to be elected at this meeting be fixed at four." 

In the absence of instructions to the contrary, the enclosed Proxy will be voted FOR the above resolution. 

Management intends to present to the Meeting four nominees for election as directors to serve until the next 

annual meeting or until their successors are duly elected or appointed. All proposed nominees have consented to 

be named in this Circular and to serve as directors, if elected. In the absence of instructions to the contrary, 

the enclosed Proxy will be voted FOR the election as directors of the four nominees indicated below. 

No proposed nominee, nor any Associate of any proposed nominee is, or has been at any time since the beginning 

of the most recently completed financial year of the Corporation, indebted to the Corporation. 

The names and municipalities of residence of the proposed nominees and the number of Common Shares 

beneficially owned, directly or indirectly, or over which each exercises control or direction, and the principal 

occupation during the last five years of each are as follows: 

Name and 

Municipality 

of Residence 

Guy Nelson 

Toronto ON 

Campbell McIntyre 

Winnipeg MB 

Peter Kozicz 

Oakville ON 

Joe Robertson 

Niagara -on-the- 

Lake ON 

Principal Occupation during last 5 years 

Chairman of Empire Iron since 1996. President 

and principal of Nelson Advisors Inc., a private 

company providing consulting advice to a 

number of companies involved in steel 

fabrication, manufacturing, construction and 

agricultural processing. 

President and Chief Financial Officer of 

Empire Iron since 1996. Director, officer and 

controller of Empire Iron since 1976. 

President of Arlea Corporation a private 

investment company since 2001. President, 

Chief Executive Office and director of Mad 

Catz Interactive Inc. a public company listed on 

the TSX from 1997 to 2001. 

Chairman of Henry Schein Ash Arcona Inc., a 

medical products distribution company, since 

January 2006. President of Henry Schein Ash 

Common Shares 

Beneficially Owned 

Before the Qualifying 

Transaction 

Common Shares 


After the Qualifying 

Transaction (1) 

nil 9,431,698 (2) 

nil 1,593,658 

nil 3,421,052 (3) 

nil 3,421,053 (4) 

Arcona Inc. since 1989. 

(1) The number of shares owned following completion of the Qualifying Transaction will be the number of Common Shares of the Resulting Issuer after 

consolidation of the Common Shares of Ryjencap on the basis of one "new" Common Share for each four "old" Common Shares. 

(2) Mr. Nelson's shares are held by Nelson Advisors Inc., a private company wholly -owned by Guy Nelson and his family . 

(3) Mr. Kozicz’s shares are held equally by Mr. Kozicz and his spouse Mrs. Kozicz. 

(4) Mr. Robertson’s shares are held by the Anita Robertson Family Trust. Anita Robertson is Mr. Robertson’s spouse. 

19

The information as to Common Shares beneficially owned, directly or indirectly or over which control or 

direction is exercised, is based upon information furnished to the Corporation by the respective nominees and is 

as of after giving effect to the Qualifying Transaction, the completion of the EIW Private Placement. See “Part V 

– Information Concerning the Resulting Issuer”. 

Appointment of Auditors 

The current auditors of the Corporation, KNV, Chartered Accountants, have notified the directors of the 

Corporation that they intend to resign with effect as of the date of the Meeting and not stand for re-appointment. 

Consequently, at the Meeting, the shareholders will be asked to vote for the appointment of Scarrow & Donald 

LLP, as auditors of the Corporation, to hold office until the next annual meeting of shareholders and authorizing 

the directors to fix the remuneration to be paid to the auditors. Scarrow & Donald LLP are currently the auditors 

of Empire Iron. The determination not to re-appoint KNV, Chartered Accountants, has not been made because of 

any reportable disagreement or unresolved issue involving the Corporation, or any consultation with the successor 

auditors, Scarrow & Donald LLP. The appointment of the auditors must be approved by the majority of votes 

cast by the shareholders. The persons designated in the enclosed Proxy, unless instructed otherwise, intend 

to vote FOR the appointment of Scarrow & Donald LLP as the auditors of the Corporation. 

Amendments to the Articles of the Corporation 

Shareholders will be asked to consider, and if thought appropriate, pass resolutions in respect of amendments to 

the Articles of the Corporation which are necessary to facilitate the closing of the Qualifying Transaction. 

1. Consolidation of the Common Shares 

The consideration to be paid to acquire all of the issued and outstanding shares of Empire Iron will be Common 

Shares of Ryjencap after consolidation of the currently issued and outstanding Common Shares on the basis of 

one "new" (post-consolidated) Common Share for each four "old" (pre-consolidated) Common Shares. This 

proposed amendment to the Articles of the Corporation needs to be passed by special resolution which requires 

not less than 2/3 of the votes cast by the shareholders who vote in respect of the resolution. Shareholders will be 

asked to consider, and if thought appropriate, pass the following special resolution: 

"IT IS RESOLVED THAT the Articles of the Corporation be amended to consolidate the currently issued 

and outstanding common shares on the basis of one "new" common share for each four "old" common 

shares." 


2. Name Change 

Ryjencap also proposes to change the name of the Corporation to "Empire Industries Ltd." in conjunction with the 

closing of the EIW Acquisition. This proposed amendment to the Articles of the Corporation needs to be passed 

by special resolution which requires not less than 2/3 of the votes cast by the shareholders who vote in respect of 

the resolution. Shareholders will be asked to consider, and if thought appropriate, pass the following special 

resolution: 

"IT IS RESOLVED THAT the Articles of the Corporation be amended to change the name of the 

Corporation to Empire Industries Ltd." 


3. Place of Shareholders' Meetings 

20

The ABCA currently requires that meetings of shareholders of the Corporation be held in the Province of Alberta. 

It is the opinion of management that the Completion of the Qualifying Transaction will require the Corporation to 

be able to hold meetings of its shareholders at any place in Canada. At the Meeting, shareholders will be asked to 

consider and, if thought appropriate, to pass the following ordinary resolution approving the amendment of the 

Articles of the Corporation to permit future meeting of the shareholders to be held at any place in Canada: 

"IT IS RESOLVED THAT the Articles of the Corporation be amended to allow meetings of shareholders 

and directors to be held at any place in Canada." 


Approval of Stock Option Plan 

Management intends to present, for shareholders' approval, an incentive stock option plan (the “Stock Option 

Plan”). The purpose of the Stock Option Plan is to assist in the securing and retaining of key personnel of 

outstanding ability and to motivate such personnel to exert their best efforts on behalf of the Corporation through 

the incentives offered by stock options. Management and the directors of the Corporation have determined that it 

is in the best interests of the Corporation that the Stock Option Plan, a copy of which is attached to this Circular as 

Schedule "A", be approved. For details of the Stock Option Plan, see "Part V – Information Concerning the 

Resulting Issuer – Stock Option Plan". 

The ordinary resolution sought to be passed is as follows: 

"IT IS RESOLVED THAT: 

1. the Stock Option Plan, a copy of which is attached to the management proxy circular dated May 

18, 2006, as Schedule "A", is approved; 

2. the directors of the Corporation are authorized to reserve up to 10% of the number of outstanding 

common shares in connection with grants of options pursuant to the Stock Option Plan; and 

3. any one director or officer of the Corporation is authorized and directed to do and perform all 

such acts and things and to execute and deliver or cause to be executed and delivered, for, and on 

behalf of the Corporation, all such agreements, instruments and other documents as in such 

individual’s opinion may be necessary or desirable to give effect to the terms of this resolution." 


Interest of Certain Persons in Matters to be Acted Upon 

Other than as set out in this Circular, none of the directors or senior officers of the Corporation, nor any person 

who has held such a position since the beginning of the last completed financial year of the Corporation, nor any 

proposed nominee for election as a director of the Corporation, has any material interest, direct or indirect by way 

of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting. (See “Part V – 

Information Concerning the Resulting Issuer – Conflicts of Interests”) 

21

PART III 

INFORMATION CONCERNING THE ISSUER 

Corporate Structure 

The Corporation was incorporated on January 18, 2005, pursuant to the provisions of the ABCA. On May 4, 

2005, Ryjencap amended its Articles to remove the private issuer restrictions. The Corporation closed its initial 

capital pool company public offering on June 29, 2005. Its Common Shares were listed on the Exchange under 

the symbol “RYJ.P” and began trading on July 14, 2005. 

The head office of the Corporation is located at 13376 - 14 Avenue, Surrey BC V4A 9B6 and its registered office 

at 3 rd Floor, 14505 Bannister Road SE, Calgary AB T2X 3J3. 

General Development of the Business 

The Corporation is currently a capital pool company pursuant to the policies of the Exchange. The principal 

business of the Corporation has been to identify and evaluate opportunities for the acquisition of an interest in 

assets or businesses and, once identified and evaluated, to negotiate an acquisition or participation subject to 

receipt of shareholder approval and acceptance for filing by the Exchange. The Corporation will not engage in 

any other business until Completion of the Qualifying Transaction. Upon Completion of the Qualifying 

Transaction, the Corporation will be classified as a Tier 1 company in the category of technological and industrial 

issuers. See “Summary - Qualifying Transaction” for a description of the Qualifying Transaction as well as “Part 

IV – Information concerning Empire Iron” for a description of the current business of Empire Iron. The business 

of Empire Iron will become the business of the Corporation upon Completion of the Qualifying Transaction. 

Financings 

In connection with the Qualifying Transaction, Empire Iron has completed the EIW Private Placement for total 

gross proceeds of $6,075,000. See “Part IV - Information Concerning Empire Iron 

Directors and Officers 

The names, municipalities of residence, number of voting securities of the Corporation presently beneficially 

owned, directly or indirectly, or over which each exercises control or direction, offices, present and first, in the 

Corporation, and the principal occupation, during the last five years, of the directors and senior officers of the 

Corporation are as follows: 

Name and Municipality 

of Residence 

Terry Rogers 

Surrey BC 

Office with the 

Corporation 

President, CEO and 

director 

Present Occupation and Positions 

Held During Last Five Years 

Retired since 2002. Vice President 

from 1994 to 2001 of Ezenet Inc., a 

public company in the business of data 

processing, trading on the TSX starting 

in 1999. 

Common Shares 


After the Qualifying 

Transaction (1) 

12,500 

Mark Ferguson 

Calgary AB 

CFO, Secretary and 

director 

President of Loudwater Capital Inc., a 

private corporate finance corporation, 

since October 2003. Director 

5,000 

22

Don Terry (1) 

Surrey BC 

Brent Atkinson (1) 

New Westminster BC 

Corporate Development of Tamarack 

Group Ltd., a private management 

consulting corporation, from December 

2001 to October 2003. Vice President 

of Montreal Trust Company of Canada 

(now Computershare Trust Company of 

Canada) from July 1989 to April 2003. 

Director Partner with Atkinson & Terry 

Insurance Brokers, a private brokerage 

insurance business in Delta, BC, since 

1975. 

Director Partner with Atkinson & Terry 

Insurance Brokers, a private brokerage 

insurance business in Delta, BC, since 

1971. 

23 

12,500 

12,500 

Basil Cuddihy 

Director 

Self-employed consultant since July 

Calgary AB 

2001. 7,500 

(1) Post-consolidation Common Shares. These shares are presently subject to the IPO Escrow Agreement. They will be released from escrow over 36 

months which release may be changed to an 18 month period if the resulting issuer meets Tier 1 listing requirements (see “Escrowed Common Shares”, 

below). 

Executive Compensation 

Compensation of Directors and Executive Officers of the Corporation 

The aggregate cash compensation paid to the directors and executive officers for services rendered in their 

capacities as directors or executive officers since the date of incorporation up to the date of this Circular is nil. 

There is no arrangement for compensation of directors. Directors and executive officers are reimbursed for their 

out-of-pocket expenses incurred in carrying out the Corporation’s business. Directors were awarded stock 

options. "Part IV – Information concerning the Issuer – Outstanding Options". 

Selected Consolidated Financial Information and Management Analysis 

Information from Inception 

Since its incorporation, the Corporation has spent approximately $200,000 for professional fees, monthly fees for 

CIBC Mellon Trust Company, investigation costs, agent's fees, disbursements and other expenses of similar 

nature in view of identifying companies and/or assets that could be a Qualifying Transaction, including the 

remuneration paid to the agent for the Corporation on its initial public offering. The Corporation anticipates 

spending an additional $150,000 to complete the Qualifying Transaction. 

Management Analysis 

The Corporation has, in order to complete a Qualifying Transaction, incurred professional fees as well as 

expenses relating to the filing of various requests with the regulatory authorities, to its transfer agent and registrar 

and operating costs. As at March 9, 2006, the Corporation entered into the letter agreement with Empire Iron in 

respect of a Qualifying Transaction. As at May 27, 2005, the Corporation had committed an estimated amount of 

$770,000 for the identification and analysis of potential Qualifying Transactions. The Corporation is currently 

completing the Qualifying Transaction with Empire Iron. As at February 28, 2006, the Corporation had available 

cash of approximately $900,000. 

The board of directors of the Corporation expects to complete the Qualifying Transaction with Empire Iron, 

which will then become a listed Corporation on the Exchange. If the Qualifying Transaction is not completed 

with Empire Iron, the Corporation believes that it has the financial capacity necessary to complete another

Qualifying Transaction having approximately $800,000 in working capital. The Corporation is confident it will 

be able to complete the Qualifying Transaction with Empire Iron. See also Schedule "B" and Schedule "C" to this 

Circular. 

Description of the Securities 

The Corporation is authorized to issue an unlimited number of Common Shares without nominal or par value, of 

which, as at the date of this Circular, 12,000,000 Common Shares are issued and outstanding as fully paid and 

non-assessable. In addition, 1,200,000 Common Shares are reserved for options granted to directors and officers 

of the Corporation and 1,000,000 Common Shares are reserved for an option granted to Canaccord Capital 

Corporation, agent for Ryjencap's CPC initial public offering. The Corporation is also authorized to issue an 

unlimited number of Preferred Shares without nominal or par value. To date, no Preferred Shares have been 

issued. 

Common Shares 

The holders of the Corporation's Common Shares are entitled to dividends as and when declared by the board of 

directors of the Corporation, to one vote per share at meetings of shareholders of the Corporation and, upon 

liquidation, to receive such assets of the Corporation as are distributable to the holders of the Common Shares. All 

of the Common Shares to be outstanding on completion of this offering will be fully paid and non-assessable. 

Preferred Shares 

The Preferred Shares may be issued from time to time in one or more series, each series consisting of a number of 

Preferred Shares as determined by the board of directors of the Corporation, who may also fix the designations, 

rights, privileges, restrictions and conditions attaching to the shares of each series of Preferred Shares. There are 

no Preferred Shares issued and outstanding as at the date of this Circular. 

The Preferred Shares of each series shall, with respect to payment of dividends and distributions of assets in the 

event of liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or any other 

distribution of the assets of the Corporation among its shareholders for the purpose of winding-up its affairs, rank 

equally with the Preferred Shares of every other series and shall be entitled to preference over the Common 

Shares, and the shares of any other class ranking junior to the Preferred Shares. 

Outstanding Options 

The Corporation has entered into stock option agreements granting the following options: 

Name 

Number of Common 

Shares Under Option 

Exercise Price Per 

Common Share 

Term 

Terry Rogers 300,000 $0.10 expires June 29, 2010 

Mark Ferguson 120,000 $0.10 expires June 29, 2010 

Don Terry 300,000 $0.10 expires June 29, 2010 

Brent Atkinson 300,000 $0.10 expires June 29, 2010 

Basil Cuddihy 180,000 $0.10 expires June 29, 2010 

Total 1,200,000 

24

Stock Options Terms 

The board of directors of the Corporation may from time to time, in its discretion, and in accordance with 

Exchange requirements, grant to directors, officers and technical consultants to the Corporation, nontransferable 

options to purchase Common Shares, provided that the number of Common Shares reserved for issuance will not 

exceed 10% of the issued and outstanding Common Shares exercisable for a period of up to five years from the 

date of grant. The number of Common Shares reserved for issuance to any individual director or officer will not 

exceed 5% of the issued and outstanding Common Shares and the number of Common Shares reserved for 

issuance to all technical consultants will not exceed 2% of the issued and outstanding Common Shares. Options 

may be exercised no later than 90 days following cessation of the optionee’s position with the Corporation, 

provided that if the cessation of office, directorship, or technical consulting arrangement was by reason of death, 

the option may be exercised with a maximum period of one year after such death, subject to the expiry date of 

such option. Any Common Shares acquired pursuant to the exercise of options prior to the Completion of the 

Qualifying Transaction, must be deposited in escrow and will be subject to escrow until the Final Exchange 

Bulletin is issued. 

For information about the Corporation’s Stock Option Plan and Options granted see “Stock Options” in “Part VI – 

Information Concerning the Resulting Issuer”. 

Escrowed Common Shares 

As of the date of this Circular, 2,000,000 Common Shares (16.7% of all issued Common Shares) are held in 

escrow pursuant to the IPO Escrow Agreement ("Seed Shares"). These are all the Common Shares of the 

Corporation issued by the Corporation before the closing of the initial public offering. In the event that a 

Qualifying Transaction is not completed, there will be no release from the IPO Escrow Agreement. Further, all 

Seed Shares held by Related Parties to the Corporation shall be cancelled pursuant to the terms of the IPO Escrow 

Agreement in the event that the Corporation is delisted from the Exchange. The escrowed shares held under the 

IPO Escrow Agreement shall be released as follows: 

10% following issuance of final notice of the Exchange as to the Completion of the Qualifying 

Transaction; 

15% six months following the initial release; 

15% twelve months following the initial release; 

15% eighteen months following the initial release; 

15% twenty -four months following the initial release; 

15% thirty months following the initial release; and 

15% thirty-six months following the initial release. 

In the event the Resulting Issuer meets Tier 1 listing requirements upon the Completion of the Qualifying 

Transaction the escrowed shares held under the IPO Escrow Agreement shall be released as follows: 

25% following issuance of final notice of the Exchange as to the Completion of the Qualifying 

Transaction and qualification as Tier 1 listing; 

25% six months following the initial release; 

25% twelve months following the initial release; and 

25% eighteen months following the initial release. 

25

Pursuant to the terms of the IPO Escrow Agreement, upon the death or bankruptcy of a holder of the escrow 

shares, the escrow trustee named in the IPO Escrow Agreement will hold the escrow shares for the person that is 

legally entitled to become the registered owner of the escrow shares. A holder of the escrow shares who ceases to 

be a Principal of the Corporation, dies or becomes bankrupt, will be entitled to retain any escrow shares he holds 

and will not be obliged to transfer or surrender the escrow shares to the Corporation or any other person. Any 

escrow shares not released from escrow before the expiry of ten years from the date of the IPO Escrow 

Agreement will be cancelled. 

Policies of the Exchange also require that (a) all Common Shares acquired by a Control Person in the secondary 

market before the completion of the Qualifying Transaction, (b) all securities issued by the Corporation in 

conjunction or contemporaneous with or in completion of the Qualifying Transaction, or which are acquired by a 

private placement or any other manner by a Control Person or by any Related Party to the Corporation; (c) all 

securities held by Principals as of the date of the Final Exchange Notice must be placed in escrow. 

Moreover, none of the stock options issued to directors and officers of the Corporation may be exercised before 

the completion of the Qualifying Transaction unless the optionee agrees in writing to deposit the shares into 

escrow until the issuance of the Final Exchange Notice. 

In addition, the Exchange may require that any securities issued to any other party in conjunction or 

contemporaneously with the Qualifying Transaction be placed in escrow. 

The escrow shares are subject to the direction and determination of the Exchange. The escrow restrictions provide 

that the escrow shares may not be sold, assigned, hypothecated, transferred within escrow or otherwise dealt with 

in any manner without the consent of the Exchange. Additionally, at its discretion, the Exchange may impose 

escrow restrictions on all or any portion of the securities issued to any Related Party to the Corporation or Related 

Parties to the Qualifying Transaction in conjunction or contemporaneous with or in contemplation of the 

Qualifying Transaction. 

All shares held in escrow will be deposited with an escrow agent pursuant to the Transaction Escrow Agreement 

which shall provide, in addition to the provisions set out above, that all voting rights attached to the escrowed 

securities shall be exercised by the registered holder of the shares. 

Details of the Common Shares and Preferred Shares to be escrowed in connection with the Qualifying 

Transaction are contained under the heading "Part V - Information Concerning the Resulting Issuer - Escrowed 

Securities". 

Prior Sales 

Since its date of incorporation, the Corporation has issued 12,000,000 Common Shares as follows: 

Nature of 

Date 

Number of Issue Price Aggregate 

Consideration 

Shares 

Per Share Issue Price 

Received 

January 18, 2005 2,000,000 (1) $0.05 $ 100,000 Cash 

June 29, 2005 10,000,000 (2) $0.10 $1,000,000 Cash 

Total 12,000,000 $1,100,000 

(1) IPO Escrow Agreement. See “Part III-Information Concerning the Issuer - Escrowed Common Shares”. 

(2) Issued pursuant to the initial public offering (IPO) as a CPC. 

26

Stock Exchange Price 

The Common Shares have been listed and posted for trading on the Exchange under the trading symbol "RYJ.P" 

since July 14, 2005. The following table sets out the high and low trading of the Common Shares for the periods 

indicated as reported by the Exchange. Trading of Common Shares on the Exchange was halted March 15, 2006, 

pending an announcement concerning the letter agreement dated March 9, 2006. Trading of Common Shares 

resumed on March 31, 2006, following the announcement of the proposed Qualifying Transaction. 

Trading Period High Low Close Trading Volume 

month ended August 31, 2005 0.120 0.110 0.110 205,500 

month ended September 30, 2005 0.110 0.090 0.100 187,000 

month ended October 31, 2005 0.110 0.075 0.075 844,000 

month ended November 30, 2005 0.100 0.075 0.100 252,800 

month ended December 31, 2005 0.100 0.075 0.075 124,200 

month ended January 31, 2006 0.105 0.075 0.080 471,000 

month ended February 28, 2006 0.200 0.080 0.150 158,300 

month ended March 31, 2006 0.200 0.110 0.160 106,800 

to and including April 30, 2006 0.170 0.120 0.150 383,500 

Non-Arm's Length Party Transaction 

Other than as described elsewhere in this Circular, none of the directors, senior officers or shareholders who 

beneficially own, directly or indirectly, more than 10% of the issued and outstanding Common Shares, nor any of 

their known Associates, has any substantial interest, direct or indirect, by way of beneficial ownership of 

securities or otherwise, in any matter to be acted upon at the Meeting. See "Part III - Matters to be Acted Upon at 

the Meeting", "Part V - Information Concerning the Resulting Issuer - Directors, Officers and Promoters - 

Directors and Officers of the Corporation" and "Part V - Information Concerning the Resulting Issuer - 

Management". 

The Qualifying Transaction is not a Non-Arm's Length Qualifying Transaction. 

Interest of Insiders in Material Transactions 

Other than set out under the heading "Interest of Certain Persons in Matters to be Acted Upon" in "Part III - 

Matters to be Acted Upon at the Meeting", Ryjencap is not aware of any material transaction involving any 

director or executive officer or proposed nominee for election as a director or any shareholder who holds more 

than 10% of the voting rights attached to the Common Shares of the Corporation or any associate or affiliate of 

any of the foregoing, which has been entered into since the commencement of the Corporation’s last completed 

financial period, or any proposed transaction which, in either case, has materially affected, or will materially 

affect, the Corporation. 

Legal Proceedings 

To the knowledge of the directors of the Corporation, there are no legal proceedings, or legal proceedings known 

to be contemplated, that are material to the Corporation or to which any of its property is or may be subject. 

Auditors 

The auditors of the Corporation are presently KNV, Chartered Accountants. The appointment of Scarrow & 

Donald LLP as auditor will be submitted to the shareholders of the Corporation at the Meeting. See “Part III – 

Matters to be Acted Upon at the Meeting – Appointment of Auditors”. 

27

Transfer Agent and Registrar 

The transfer agent and registrar of the Corporation is CIBC Mellon Trust Company. 

Material Contracts 

The Corporation has not entered into any material contracts since its incorporation, except for: 

1. Agency Agreement dated May 27, 2005, between the Corporation and Canaccord Capital Corporation; 

2. Discount Seed Share Escrow Agreement dated May 27, 2005, among the Corporation, CIBC Mellon Trust 

company and Terry Rogers, Don Terry, Brent Atkinson, Basil Cuddihy and Mark Ferguson; 

3. Transfer Agent, Registrar and Dividend Disbursing Agent Agreement between the Corporation and CIBC 

Mellon Trust Company, dated May 27, 2005; and 

4. Letter agreement between the Corporation and Empire Iron dated March 9, 2006, in respect of the proposed 


Copies of these agreements are available for inspection at the registered office of the Corporation, 3rd Floor, 

14505 Bannister Road SE, Calgary, Alberta T2X 3J3, during ordinary business hours up to and including the 

thirtieth day following the closing of the Qualifying Transaction. 

28

PART IV 

INFORMATION CONCERNING EMPIRE IRON WORKS 

The following information, relating to the business of Empire Iron, has been provided to the Corporation by 

Empire Iron. Though the Corporation believes the information to be accurate and complete, it has relied solely 

upon Empire Iron in this regard. 

In Part V and Part VI of the Information Circular, unless the context requires otherwise, references to “we”, “our”, 

the “Company”, the “Corporation”, or “Empire Iron”, refer to Empire Iron Works Ltd.. and where applicable, to 

its subsidiaries or its operating divisions. 

The Corporation’s head office address and its registered office address are as follows: 

Head Office: 

1001 Jarvis Avenue, 

Winnipeg, Manitoba R2X 0A1 

Registered Office: 

Suite 203, Two Lombard Street. 

Toronto, Ontario M5C 1M1 

Incorporation 

Name, Incorporation and Ownership 

Empire Iron Works Ltd. (“Empire Iron” or the “Company”) was founded in 1958 and it currently operates from 

its head office located at 1001 Jarvis Ave., Winnipeg, Manitoba. It was incorporated in Manitoba and has been 

continued and is currently in good standing under the The Corporations Act (Manitoba). Empire Iron is a private 

company that is in the business of structural steel design, fabrication and installation. It is also active in industrial 

construction through EIW Construction Services and industrial equipment manufacturing through its wholly 

owned subsidiary, Ward Industrial Equipment Ltd. 

29

Following an internal ownership reorganization completed on May 1, 2006, Empire Iron amalgamated with Ward 

Empire Group Inc., a holding company that owned 75% of the common shares of Empire Iron. After the 

corporate reorganization, the principal shareholders of Empire Iron are; Nelson Advisors Inc. (a private 

corporation owned by the Nelson family), Steve Lockwood (through several different family controlled entities), 

Campbell McIntyre, Vic Becker, Thor Gaul, Peter Kozicz, Joe Robertson. Messrs. Nelson, Kozicz and Robertson 

are resident in Ontario, Messrs. McIntyre and Becker are resident in Manitoba and Messrs. Lockwood and Gaul 

are resident in Alberta. 

Intercorporate Relations hips 

The Corporation manages a network of subsidiary companies and divisions, all of which are primarily involved in 

the structural steel fabrication and erection business, the industrial construction business and the industrial 

equipment fabrication business. 

As at the date of this Circular, Empire Iron’s active subsidiaries are: 

Empire Iron Works Ltd. 

(Manitoba) 

Ward Industrial 

Equipment Ltd 

(Ontario) 

Hopkins Steel 

Works Ltd. 

(Ontario) 

In addition to the wholly owned subsidiaries of Ward Industrial Equipment Ltd. (“Ward”) and Hopkins Steel 

Works Limited (“Hopkins”), the Corporation operates its business through four distinct divisions or profit 

centres. The divisions are as follows: 

DIVISION 

Empire Winnipeg 

Empire Edmonton 

Empire Vancouver 

EIW Construction Services 

ADDRESS 

1001 Jarvis Avenue, Winnipeg, Manitoba 

21104 - 107 Avenue, Edmonton, AB 

7501 Vantage Way, Delta, BC 

717 Jarvis Avenue, Winnipeg, Manitoba 

30

General Development of Business 

General 

Empire Iron designs, manufactures and erects structural steel, plate work, open web joists, bridges and 

miscellaneous metal products. It manufactures these products at plants in Edmonton, Alberta; Delta, British 

Columbia; and Winnipeg, Manitoba and Welland, Ontario (Hopkins). Empire Iron also designs and manufactures 

a full range of industrial equipment in Welland, Ontario through its subsidiary, Ward Industrial Equipment Ltd. 

In total, Empire Iron owns and leases fabricating and manufacturing facilities totaling 190,000 square feet of 

space. 

History 

Empire Iron was founded in 1958 in Winnipeg, Manitoba and was incorporated in 1964. Empire Iron initially 

operated as an ornamental metal fabricator. The following provides a summary of key historical milestones for 

Empire Iron; 

¾ 

¾ 

¾ 

¾ 

¾ 

¾ 

¾ 

¾ 

¾ 

¾ 

¾ 

¾ 

¾ 

¾ 

In 1968, Empire Iron was awarded its first major structural steel supply and installation contract. 

In 1974, Empire Iron established a wheelabrating and painting facility in its Winnipeg plant. 

In 1979, Empire Iron opened an office in Edmonton, Alberta and a plant in Wabamun, Alberta. 

In 1983, the Company opened an office and plant facility in Delta, British Columbia. 

In 1988, EIW Construction Services was created and has been operating as a division of Empire Iron ever 

since. EIW Construction Services is a multi-trade construction and maintenance contractor serving the 

industrial market in Manitoba, Saskatchewan and northern Ontario. The construction services include 

supply and installation of mechanical, electrical and instrumentation systems, supply and installation of 

process piping, maintenance of existing facilities, shutdown services, heavy equipment installations, plant 

dismantling & relocation and millwrighting. 

In 1992, the Company added a computer-programmed, fully automated beam line in Winnipeg. 

In 1994, Empire Iron implemented AutoCAD LT for Windows and a plotter system, providing its clients 

with the convenience and ability to e-mail drawings. 

In 1999, the Company acquired Hopkins Steel Works Limited., a structural steel fabricator located in 

Welland, Ontario. Hopkins was founded in 1966 and has a rich history of steel fabrication experience. It 

operates out of a 35,000 square foot leased facility in Welland, Ontario. 

In 2000, Empire Iron re-established an in-house drafting system using StruCad software. Since then, the 

software has been changed to the X-Steel structural steel detailing system (10 licenses acquired). 

In 2002, the Empire Iron added a Peddinghaus CNC beam line to its Wabamun plant. 

Over the last decade, Empire Iron has developed its IT systems to a fully integrated network connecting 

all its branches. The Company currently uses the Sage Timberline accounting application. 

Over time, the Company has developed an in-house quality assurance program that is compliant with the 

Canadian Institute of Steel Construction (“CISC”) and the American Institute of Steel Construction 

(“AISC”) standards. 

Empire Iron has also developed a safety policy compliant with all Provincial regulations with Certificate 

of Recognition certification in all branches. 

In 2006, Empire Iron signed a letter agreement to acquire Ward effective March 31, 2006. Ward is a high 

quality, Canadian manufacturer of bulk material handling equipment and environmental equipment. The 

31

purchase price to be paid by Empire Iron has been agreed to be the book value of the common equity of 

Ward. Ward was founded in 1966 and provides targeted industrial market segments with a high quality, 

dependable source for the engineering, manufacture and installation of advanced bulk material handling 

and processing equipment/systems, foundry equipment/systems and air quality control 

equipment/systems. Ward’s manufacturing facilities include a 45,000 sq. ft. fabrication shop and 4,000 

square feet of selling, engineering and administrative office 

Principal Products or Services 

Supply of Fabricated Steel – Structural and miscellaneous steel is supplied for mining operations, pulp mills, 

process plants, hydro-electric plants, as well as any and all types of industrial, institutional and commercial 

projects. Plate steel fabrications include bridges, hydraulic gates, stop logs, precipitators, tanks, hoppers, chutes, 

breeching and engineered equipment. The annual tonnage capability varies depending on the type of fabrication. 

The Winnipeg and Wabamun plants are equipped with wheelabrating and painting facilities to accommodate 

multi-coat paint systems for a variety of highly corrosive environments. In addit ion, Empire Iron has one of the 

largest boring and milling machines in Western Canada, enabling the Company to provide a complete service for 

machined products such as hydraulic gates, guides and stop logs. All fabrication is subject to an in-house quality 

assurance program that is compliant with CISC and AISC standards. 

Erection of Fabricated Steel – Empire Iron erects fabricated structural and plate steel for its clients from site 

offices staffed to accommodate the size and complexity of each project. The skilled trades people are 

complemented by quality assurance, safety and administrative staff who ensure each project is erected to CISC 

and AISC standards, and is performed in a manner fully compliant with all Provincial safety regulations. 

Multidiscipline Trade Construction – Empire Iron’s construction services division is based out of Winnipeg, 

Manitoba and provides construction and maintenance service for industrial projects throughout Western Canada. 

Projects employing unionized ironworkers, millwrights, operating engineers, pipefitters, boilermakers, 

electricians and other trades people, together with technical staff support, are supervised and coordinated by 

experienced construction managers and completed on schedule to the client’s satisfaction. Empire Iron tends to 

target projects where multidiscipline trade construction is a part of, and complementary to, a steel fabrication and 

erection project. 

Industrial Equipment Manufacturing – The Company has purchased 100% ownership of Ward 

(www.wardequipment.com ) for the book value of common equity. The acquisition was done in two parts: 1) 

purchase of land and buildings for fair market value of $915,000 and, 2) purchase of shares of Ward effective 

April 1, 2006, adjusted book value of $764,982. The land and building component was paid for with reduction of 

affiliated company debt of $640,000 and redemption of preferred shares for $275,000. The share purchase was 

paid by a draw down of Empire Iron’s working capital. Ward was incorporated in 1965 and operates out of a 

49,000 square foot facility in Welland Ontario. Revenue approximates $4 million per year, with operating income 

of $110,658 as per the year ended December 31, 2005, review engagement financial statements. Management is 

of the view that the product line owned by Ward can continue to be designed, engineered and manufactured in 

Ontario and growth in equipment sales in Western Canada can be fabricated in Empire Iron’s facilities in Western 

Canada. 

Operations 

Method of Contracting with Clients- Empire Iron acquires new projects from negotiation and competitive 

bidding. In either case, Empire Iron tends to secure work based on price and delivery, as well as its reputation for 

quality workmanship. 

Competitive bidding responds to prospective customer’s tender requirements or that of the engineering firm that 

may be acting on the prospective customer’s behalf. On larger jobs, there can be a pre-qualification round where 

32

contractors have to present their credentials to do the scope of work. The scope of work can take the following 

forms: 

¾ 

¾ 

¾ 

Supply of fabricated steel only 

Supply and install 

Supply and install and industrial multi-trade installation of a specific scope of work 

The typical types of pricing for contracts are: 

¾ 

¾ 

¾ 

Lump sum pricing to deliver an engineered scope of work in a specified time frame 

Unit pricing 

Time and materials 

Depending on the relationship with the client, and the tightness or surplus of capacity in the industry, each form of 

pricing has its pros and cons. 

Facilities and Employees- The Company operates out of six principal facilities totaling 167,000 square feet of 

shop facilities, 23,000 square feet of office and indoor storage space and 127,000 square feet of outside material 

handling storage under crane. 

With two operations in Winnipeg, one in Edmonton, one in Vancouver and two in Welland; Empire Iron and its 

two wholly owned subsidiaries currently employ 56 office staff and 17 shop supervisory staff. In addition, the 

hourly shop employees range from 105 to 190 depending on production requirements. Similarly, hourly field 

employees are hired on a job by job basis and the number of employees fluctuates from 40 to 260. 

Each of Empire Iron’s locations has the following resources: automated beam lines, welding equipment, 

overhead cranes, plasma cutting equipment, other typical steel fabrication shop equipment, and painting and 

cleaning equipment. The following table provides more details of the Company’s operations. See the management 

discussion and analysis section for a more detailed description of the Company’s facilities and employees on a 

segmented basis. 

Sales Order Process - The following flowchart illustrates the Company’s sales order to installation process: 

Sales Order 

Engineering 

and Drafting 

Component 

Procurement 

Fabrication, 

Cleaning and 

Painting 

Subcontract 

Noncore 

Processes 

Quality 

Assurance 

Delivery 

Installation (if 

applicable) 

The Company’s scheduling practices and associated software form part of the company’s quality assurance 

program to ensure that goods are delivered on time. When a steel fabrication project is awarded and a contract is 

signed, project management meets with the client to discuss and finalize design and engineering specifications. 

This phase could take two to seven weeks, depending on the complexity of the project. During the first couple of 

weeks, the purchasing manager procures the necessary raw steel and associated required components, and the 

preparation of detailed shop drawings commences. Once the product design and specifications are finalized, shop 

details completed and the components are delivered, Empire Iron’s production employees fabricate the various 

33

components necessary to complete the project requirements. Certain non-core processes are outsourced to 

contractors or suppliers as required. Empire Iron’s quality assurance department conducts tests to ensure products 

meet client and regulatory design and material specifications. 

Once a project is prepared for delivery, the Company contracts a freight company to deliver the steel to the client. 

Empire Iron may then complete the installation of the structural steel components if it is part of the contract. 

Empire Iron’s sales order to delivery cycle varies depending on the size and complexity of the project, however, 

the timeframe for a typical project, valued at $250,000, is eight weeks. 

Information Systems – Empire Iron’s information systems utilize the latest state -of-the-art hardware and 

software. The Company’s servers run on a Microsoft operating system and have full redundancy backup systems. 

All data flows through a proxy server and firewall, which allows a maximum protection from viruses and other 

external treats. Empire Iron’s engineering, client service and administrative employees have modern-networked 

computers installed with business application suites. The Company has implemented AutoCAD LT for Windows 

and a plotter system, providing its clients with the convenience and ability to email drawings. In addition, Empire 

Iron implemented the X-Steel structural steel detailing system and the Sage Timberline accounting and financial 

reporting package. These software packages allow the Company to manage client relationships, workflow, 

projects and documents on a timely basis. Management will continue directing resources toward information 

technology to maximize Empire Iron’s operational efficiency and employee productivity. 

Structural Steel Suppliers to Empire Iron- The Company has ready access to alternative steel suppliers. The 

table below lists the five most significant suppliers with which Empire Iron conducts business: 

Supplier 

Product/Service 

Length of 

Relationship 

% of 2004 

Purchases 

Trend 

Samuel, Son & Company Ltd. Steel 20 Years 13% Increasing 

Reliable Tube, Inc. Steel 20 Years 6% Increasing 

Varsteel Ltd. Steel 20 Years 3% Stable 

Chaparral Steel Steel 10 Years 1% Increasing 

Russel Metals, Inc. Steel 20 Years 1% Stable 

Source: Empire Iron Works Ltd. 

Samuel, Son & Company Ltd. – Based in Mississauga, Ontario, Samuel, Son & Company is a family-owned 

business that is among North America’s top 10 processors and distributors of metals. The company operates 

more than 80 facilities located strategically throughout Canada and the U.S. The company supplies carbon steel, 

stainless steel, aluminum and aerospace alloys in a complete range of grades, tempers, shapes and sizes. 

Reliable Tube, Inc. – Based in Langley, British Columbia, Reliable Tube is a metals service center. The company 

reported US$9.3 million in sales and 24 employees in 2004. 

Varsteel Ltd. – Headquartered in Lethbridge, Alberta, Varsteel is a metals service center with operations in 11 

locations throughout Canada. 

Chaparral Steel – Headquartered in Midlothian, Texas, Chaparral Steel is the second largest producer of structural 

steel products in North America, with an annual rated production capacity of 2.8 million tons of steel. The 

company manufactures over 230 different types, sizes, and grades of structural steel, and markets its products 

throughout the United States, Canada, and Mexico. 

Russel Metals, Inc. (TSX: RUS) – Headquartered in Toronto, Ontario, Russel Metals is one of the largest metals 

distribution companies in North America. The company conducts business through three metals distribution 

34

segments (metals service centers, energy tubular products and steel distributors) under various names, including 

Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, 

Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, Leroux Steel, McCabe Steel, Megantic Metal, 

Metaux Russel, Milspec Industries, Pioneer Pipe, Russel Leroux, Russel Metals Williams Bahcall, Spartan Steel 

Products, Sunbelt Group, Triumph Tubular & Supply, Vantage Laser, Wirth Steel and York-Ennis. 

Financial Service Providers to Empire Iron- The Company’s principal financial service providers are: 

• Operating and senior term lender is Royal Bank of Canada, Winnipeg Main Branch 

• Western Surety as its bonding company 

• Aon Reed Stenhouse Winnipeg Branch as the insurance broker 

• Scarrow & Donald LLP as its auditor 

Health and Safety- Empire Iron’s business is adding value to structural steel through its people , so employees are 

the Company’s most valuable resource. The Company’s objective is to develop and maintain an effective 

program for the safe production of the products and services it provides to its clients. The Company’s health and 

safety policy states: 

• Each employee is entitled to a safe working environment, free from recognized health and safety hazards. 

• Every effort is made in the interest of accident prevention to provide safe and healthy working conditions, 

and to eliminate hazards that can cause injury to workers or damage to property and equipment 

• Accident prevention is every employee’s responsibility. Supervisory personnel and employees are 

therefore accountable for the safe operation of the work. Employees have a responsibility to themselves, 

their families, and to their fellow workers to conduct themselves safely. Employees must observe and 

adhere to all safety rules and instructions relating to safe and efficient work habits. 

• The control and prevention of accidents requires the dedicated participation of all employees, as well as 

continuous scrutiny by managers and supervisors, in order to make the program effective and successful. 

The Company is committed to improving the safety of its employees by: 

• Ongoing safety orientation for new employees 

• Refresher safety training for existing employees 

• WHMIS training 

• Development of safe work practices 

• Tool box safety meetings 

• Facility safety committees 

Management measures the success of the health and safety program on an ongoing basis and it tracks the 

performance through measuring accident frequency and severity rates, feedback from employees during minuted 

safety committees and “tool box” safety meetings. 

Industry Associations and Licenses- Due to the range of products and services that Empire Iron provides, the 

Company actively participates in several industry associations. The Company also holds a number of 

memberships, licenses and certifications to be able to conduct its business professionally, legally and successfully 

• The Association of Professional Engineers, Geologists, and Geophysicists of Alberta (APEGGA) 

• The Association of Professional Engineers, and Geoscientists of British Columbia (APEBC) 

• The Association of Professional Engineers of Manitoba (APEM) 

35

• The Association of Professional Engineers of Ontario (APEO) 

• Alberta Construction Safety Association 

• Canadian Construction Association 

• Canadian Federation of Independent Business 

• Canadian Institute of Steel Construction 

o Central Regional Committee 

o Alberta Regional Committee 

o British Columbia Regional Committee 

• Canadian Welding Bureau 

o Winnipeg Plant W47.1 – Div. 1, Cert. #11-4 

o Edmonton Plant W47.1 – Div. 1, Cert. #172-2 

o Vancouver Plant W47.1 – Div.1, Cert. # 213-1 

o Welland Plant W47.1 – Div. 2.1 

• Edmonton Construction Association 

• Winnipeg Construction Association 

• Niagara Construction Association 

• Edmonton Steel Fabricators Association 

• Mechanical Constructors Association of Manitoba 

• Steel Structures Painting Council 

• Forest Industry Suppliers and Logging Association of Alberta 

• Winnipeg Chamber of Commence 

• StruCad Steel Detailing Software License 

• Xsteel Steel Detailing Software License 

• Steel Plus Network Member 

Market 

General Canadian Economic Forecast- According to the Royal Bank of Canada’s March 2006 Economic 

Digest; “The stage is now set for a solid pick-up in overall Canadian economic growth in the first quarter of 2006. 

Robust corporate profits combined with a strong labour market will keep domestic demand well supported. We 

are calling for 3.5% real growth this year following last year’s 2.9% pace. On net, the overall construction sector 

will continue to see growth across much of the country this year as the sector shifts towards public infrastructure, 

office, institutional and commercial projects and takes up the slack left behind by a cooling housing market. 

Second, the country is also undergoing an expansion in terms of equipment investment. Investment in machinery 

and equipment has risen by about 10% in each of the last two years and is poised for further expansion this year 

and next. The strongest investment growth rate is expected to occur in Manitoba this year through public and 

private spending on structures, but Ontario and Alberta will lead by far on the increased dollar volume of 

activity.” 

Western Canadian Non-residential Construction Spending- Empire Iron’s sales are primarily driven by the 

nonresidential construction industry in Western Canada. The nonresidential construction sector is also referred to 

as the industrial, commercial and institutional (“ICI”) sector. ICI capital spending in Western Canada has been 

growing at approximately 18% per year in 2004 and 2005 and Statistics Canada forecasts that it will grow by 15% 

in 2006 as well. 

36

NON-RESIDENTIAL CONSTRUCTION SPENDING - WESTERN CANADA 2002 2003 2004 2005 2006E 

($ millions) 

Mining and oil and gas extraction $17,153.9 $20,911.3 $25,503.1 $30,966.4 $34,665.5 

Utilities $2,296.4 $2,608.5 $2,537.9 $2,985.2 $3,779.3 

Other Non-residential $13,963.8 $12,289.4 $14,210.7 $15,751.8 $18,636.5 

Total Non-residential Construction Spending $33,414.1 $35,809.2 $42,251.7 $49,703.4 $57,081.3 

Annual Growth 7.2% 18.0% 17.6% 14.8% 

NON-RESIDENTIAL CONSTRUCTION SPENDING - TOTAL CANADA 2002 2003 2004 2005 2006E 

($ millions) 

Mining and oil and gas extraction $20,687.4 $24,588.2 $29,942.4 $36,084.6 $39,938.7 

Utilities $7,252.8 $8,534.4 $8,843.5 $9,690.3 $12,087.0 

Other Non-residential $42,726.4 $42,033.5 $45,278.9 $47,877.6 $52,964.6 

Total Non-residential Construction Spending $70,666.6 $75,156.1 $84,064.8 $93,652.5 $104,990.3 

Annual Growth 6.4% 11.9% 11.4% 12.1% 

Western Canada non-residential construction capital spending has been steadily taking a larger share of the 

Canadian total non-residential capital spending growing from 47% in 2002 to an estimated 54% in 2006. Nonresidential 

construction capital spending has also been increasing its share of the overall Canadian economy, 

increasing from 6.1% of GDP in 2002 to an estimated 6.8% in 2006. There is a direct correlation between nonresidential 

construction capital spending and corporate profits. Approximately 50% of corporate profits are 

expended on non-residential construction annually. 

As can be seen by the segmented table above; capital spending in the mining and the oil and gas industry in 

Western Canada represents one of the most crucial segments of the economy. Generally speaking the industry is 

divided into two segments: upstream, which refers to oil and gas exploration, drilling and well completions; and 

downstream, referred to as the processing, refining and marketing portion of the industry. The market conditions 

have been very positive for this segment of the economy due to the continued high commodity prices and strong 

industry profits, which have contributed to record levels of oil and gas drilling activity in Western Canada and 

numerous capital projects already completed, in progress or under development. 

Based upon the $83 billion construction forecast in BC (BC Ministry of Economic Development’s major 

construction projects inventory for September 2005) and the forecasted capital expenditures in Alberta’s oil sands 

of $49 billion (Canada’s Oil and Gas Industry Overview,” U.S. Commercial Service, May 27, 2005) , companies 

in the steel fabrication and erection industry with operations in Western Canada are poised to benefit. For 

example, according to Canadian Natural Resources Ltd., the company’s Horizon project is forecast to use 

approximately 130,000 tons of structural steel. 1 Since each project’s usage of structural steel will vary, it is 

difficult to extrapolate the total aggregate demand. However, given the planned ICI capital expenditures over the 

next 15 years, demand for structural steel is expected to be strong in the pro forma period and beyond. 

1 “The Devil’s in the Details for Megaprojects,” Globe and Mail, April 4, 2005. 

37

Alberta Oil Sands Construction Activity - Empire Iron’s management projects that oil sands capital expansion 

programs will be a significant growth driver for the company. Analysts predict that oil sands production in 

Alberta will increase significantly in the coming years to offset the decline in Canada’s conventional crude oil 

production. More than $34 billion has been invested in the oil sands since the mid-1990s, and a minimum of $38 

billion will be invested over the next 10 years. 2 In 2004 alone, construction investment in the oil sands jumped 

82% to $2.6 billion, and another 85% rise to $4.7 billion was expected in 2005. 3 4 There will be a commensurate 

increase in the demand for concrete, structural steel, pipes, pipe fittings, valves, electrical cable, various control 

instruments and major equipment pieces. The activity will also require the support of teams of engineers, 

scientists, accountants and lawyers. Consequently, the second-round effects from the boom in spending in the 

nonresidential construction industry will extend into nonmetallic mineral products, primary and fabricated metals, 

machinery and electronic products manufacturing, as well as the professional, scientific and technical services 

industries. 

The development of oil sands deposits has been growing in importance since the mid-1990s, due to technological 

improvements and, more recently, the rising price of crude oil. Canada and Venezuela are the two countries that 

have large documented deposits of oil sands. However, a tenuous political situation in Venezuela leaves the 

spotlight on Canada to bring the much-needed additional supplies to the oil market. 

According to Oil and Gas Journal, Canada had a reported 178.8 billion barrels of proven oil reserves in 2005, 

second only to Saudi Arabia. However, the bulk of these reserves (over 95%) are oil sands deposits in Alberta. 

The inclusion of oil sands in official reserve estimates is not without controversy, as oil sands are much more 

difficult to extract and process than conventional oil. 

Numerous products have been sourced locally in Alberta, which explains why these industries performed better in 

the province than nationwide last year. However, supply of products and services into Alberta has spilled over to 

the other western Canadian provinces as well as Ontario and abroad. 

Oil prices are forecast to remain near US$45 to US$50 per barrel over the medium term. 5 This provides a wide 

safety margin for producers even if the Canadian dollar appreciates against the U.S. dollar more sharply than 

anticipated and depresses revenue. In terms of the availability of refining capacity for synthetic crude oil, the 

industry is working to develop additional refining capacity in Alberta as well as adding investment in pipeline 

infrastructure that would take synthetic crude oil from Alberta to ports on British Columbia’s coast. 

2 “Oil Sands Will Lead Canadian Growth in 2005 and Beyond,” Global Insight, May 4, 2005. 

3 Ibid. 

4 Ibid. 

5 “Oil Sands Will Lead Canadian Growth in 2005 and Beyond,” Global Insight, May 4, 2005. 

38

The following table provides additional detail on the Alberta Oilsands projects: 

Project Name 

Volume (b/d) 

Projected 

Cost 

(in billions) 

Year 

Suncor Firebag Voyageur 550,000 $5.4 2012 

Shell/Chevron/Western Oil Sands Upgrader Jackpine 525,000 $3.5 2013 

Syncrude Canada Ltd. Aurora Mine/Upgrader 455,000 $4.3 2009 

Husky Energy/Imperial Oil Ltd. Kearl Lake 250,000 $3.3 2012 

Imperial Oil Ltd. Cold Lake 225,000 $1.4 2010 

Canadian Natural Resources Ltd. Horizon Oil Sands Mine 225,000 $5.4 2011 

True North Energy Fort Hills 190,000 $2.4 2008 

SynEnCo Northern Lights 150,000 $2.7 2011 

Canadian Natural Resources Ltd. Wolf Lake Primrose 120,000 $0.9 2010 

Encana Foster Creek 100,000 $1.1 2007 

ConocoPhillips Ltd., Total SA Surmont Oil Sands Project 100,000 $0.8 2010 

ExxonMobil Kearl Lake 100,000 $2.2 2005 

Petro-Canada Meadow Creek 80,000 $0.5 2007 

Encana Christine Lake 70,000 $0.4 2008 

OPTI-Nexen Long Lake 70,000 $1.6 2008 

Petro-Canada Lewis Creek 60,000 $0.5 2010 

7 Others 210,000 $12.6 

Total 3,480,000 $49.0 

Source: “Canada’s Oil and Gas Industry Overview,” U.S. Commercial Service, May 27, 2005 

According to Raymond James Equity Research, production from mining and in-situ oil sands projects is projected 

to increase from approximately 800,000 barrels per day in 2005 to almost four million barrels per day in 2017. 

This 12% annual growth rate of oil sands production will easily exceed the forecasted growth rate of gross 

domestic product of between 2.5% to 3% and therefore be a driving force of the Canadian economy in the coming 

years. This bodes well for companies like Empire Iron that supply structural steel to oil and gas companies and 

their contractors. Suncor, Syncrude and the Athabasca Oil Sands Project have already begun production, and 

other projects will begin between 2007 and 2011. 

The following charts detail both mining and in-situ production growth by industry participants from 2003 to 2020. 

39

Western Canada Oil Sands Mining Projects 

(Figures in barrels per day) 

Source: Raymond James Equity Research, July 2005 

Western Canada Oil Sands In-Situ Projects 

(Figures in barrels per day) 

Source: Raymond James Equity Research, July 2005 

40

Proposed Industrial Heartland Project of Alberta – The Industrial Heartland Project is being proposed for 

an area northeast of Edmonton. It is comprised of four municipalities and is ideally located where highways, 

pipelines and railways converge. The area is being marketing as the industrial hub for petroleum, 

petrochemical, and chemical industries in Western Canada. The area has attracted over $11 billion in 

investment to-date from companies such as Dow Chemical, Shell, Imperial Oil, BP Amoco, Air Liquide, 

Chevron. 

The Financial Post reported on March 11, 2006, that: 

“Proposals worth $25 billion or more could transform an area east of Edmonton into a refinery hub that 

rivals those along the Gulf coast of Texas.” 

Steel fabrication companies, like providers of other construction services, will directly or indirectly benefit 

from an initiative of this magnitude. Empire’s participation in this growth will require the Company to add the 

required shop and personnel capacity to meet the burgeoning demand if such a project were to materialize. 

41

Non-residential Constructio n Activity in British Columbia- One of the key geographic markets for Empire 

Iron is British Columbia. Construction activity in British Columbia continues to be on an upswing. According to 

the Major Projects Inventory report released by the British Columbia Ministry of Economic Development, a total 

of $83 billion in projects are planned or underway in British Columbia. The capital cost of all major projects 

currently under construction is estimated at $33 billion. Proposed projects are estimated at approximately $45 

billion. The remaining $4 billion of projects are “on hold” for the time being. 6 

Consistent with the announcements made by the provincial government to improve educational services, 10 

public or public-private projects in the education sector were part of the 63 new proposed projects. Of note are 

the Canada Education Park in Chilliwack and the $1-billion Sage Hills University and residential community 

south of Courtenay on Vancouver Island (a private proposal). 

Industrial project proposals continue to increase. Active mineral exploration continues on numerous properties, 

most notably in the North Coast region. Other projects of interest are the $2.5-billion Enbridge Condensate 

Pipeline proposal terminating in the North Coast area and three wind and wood/coal power plant proposals. 

Competitive Conditions 

The structural steel fabrication industry is highly fragmented. Of the 125 competitors that are members of the 

Canadian Institute of Steel Construction (“CISC”), Empire Iron management estimates that only 24% of the 

annual revenue is in western Canada and 44% is in Quebec. Empire Iron management are of the view that the 

current Canadian fabricating capacity is not appropriately located for the future volume of work expected over the 

next decade. 

The largest competitor in Western Canada is Supreme Steel with eight fabricating facilities in Western Canada 

and Portland, Oregon. Prior to the recent acquisition of three divisions from Canron (Canron Vancouver, Canron 

Portland, Midwest Edmonton), Supreme owned five fabricating facilities; four in Edmonton, and one in 

Saskatoon. The four plants in Edmonton have 25,000 square feet of office space and 117,000 square feet of shop 

6 “Major Projects Inventory,” British Columb ia Ministry of Economic Development, September 2005. 

42

space on 24 acres of land. Saskatoon adds 5,500 square feet of office space, 37,000 square feet of shop space on 8 

acres of land. The acquisition of Canron’s western operations greatly expanded Supreme’s capacity. Canron 

Vancouver added 25,390 square feet of office space, 124,600 square feet of shop space on 15 acres of land. 

Canron Portland added 8000, square feet of office, 107,000 square feet of shop on 26 acres of land. In total, 

Supreme has 65,000 square feet of office and 385,600 square feet of shop. 

Waiward Steel is the second largest structural steel fabricator in Western Canada and operate one of the most 

automated steel fabrication facilities in Canada. Waiward’s facility is approximately 210,000 square foot in 

Edmonton. 

Empire Iron is the third largest structural steel fabricator in Western Canada with 23,000 square feet of office and 

167,000 square feet of shop capacity in six facilities. 

The rest of the major fabricators in western Canada can be largely described as single facility operations ranging 

in revenue from $10 million to $25 million per year. 

Structural Steel Fabricators 

Competitive Comparison 

Canada (b) 

Top 10 (b),(c) 

EIW 

(2005) 

Number of Businesses 438 10 1 

Total Employees 15,893 6,675 365 

Total Revenue ($ in millions) $2,427.6 $1,095.4 $73 

Average Employees 36 668 (d) 189 

Average Revenue ($ in millions) $5.5 $109.5 (d) $73 

Average Revenue per Employee (a) $152,746 $164,105 $200,000 

(a) Numbers are rounded 

(b) Based on the exchange rate of US$1 = CDN$1.1685 as of September 19, 2005, Oanda.com 

(c) The top 10 competitors by revenue (Groupe Canam Manac, Trylon Manufacturing, Dragon Forge, Frazier Industrial, Super Metal 

Structure, Marshall-Barwick, Cherubini Metal Works, Supreme Steel, Locweld and Solive Ajoure, 2000) 

(d) Averages are skewed by Groupe Canam Manac ($825.7 million and 4,361 employees) 

Source: RSM EquiCo databases and iMarket, Inc., 2005 

Marketing Plans, Strategies and Future Developments 

Empire Iron will be using the proceeds from the EIW Private Placement for two principal initiatives: 

(a) 

(b) 

capacity expansion of its Alberta and Manitoba facilities to satisfy the increasing demand for its 

services that management feels will be occurring over the next business cycle; and 

selective acquisition(s) to strengthen and broaden Empire Iron’s product offering in western 

Canada. 

The public company will change its name from Ryjencap Inc. to Empire Industries Ltd. (“Empire Industries”) 

after the transaction. Empire Industries will be doing business through its wholly owned operating companies and 

divisions; Empire Iron, EIW Construction Services, Ward and Hopkins. The intent is to have Empire Industries 

43

continue to acquire additional subsidiaries that have operating synergy with the other subsidiaries of Empire 

Industries. 

Empire Iron management is of the view that there is a significant opportunity to cost effectively, add capacity at 

its existing operations in Alberta, BC and Manitoba and to selectively acquire competitors that are synergistic 

with Empire Iron’s operations. Empire Iron management are also of the view that margins will strengthen 

significantly as fabricating capacity, skilled trades person capacity and project management capacity becomes 

strained. 

Selected Empire Iron Financial Information and Management's Discussion and Analysis 

Annual Financial Information - Audited information for the fiscal years ended December 31, 2005 and 

December 31, 2004, and unaudited information for the year ended December 31, 2003. See also Schedule "D" to 

this Circular. 

Revenue 

Revenue for fiscal years ending December 31, 2003, 2004 and 2005 was $ 39.8 million, $ 36.3 million and $ 73.5 

million respectively. 

Fiscal 2003’s revenue was $ 39.8 million, a drop of approximately $ 4 million from the prior year, primarily due 

to a lack of spending in the industrial sector. Commodity prices were depressed, and capital projects were on hold. 

The amount of contracts available was not large enough to sustain all of the supply capability in the western 

Canadian market place. 

Fiscal 2004’s revenue was $ 36.3 million, again lower than required to achieve profitability. The depressed 

industrial sector that started in 2002 continued through to fourth quarter of 2004, when new industrial projects 

started to appear. 

Fiscal 2005’s revenue was $73.5 million. The Company took advantage of some fourth quarter 2004 bid 

opportunities in a revived industrial sector to create a solid backlog going into the first quarter of 2005. In 

addition, during 2005, the Company was awarded a $19.5 million project at the Vancouver Airport, with a long 

term customer for whom Empire Iron had supplied all of the structural steel requirements since 1993. Several 

other jobs were added throughout the year as shop space became available. 

Income from continuing operations (“Operating Income”). 

Income (loss) from continuing operations for fiscal years ending December 31, 2003, 2004 and 2005 was $(0.7) 

million, $(1.3) million and $0.3 million respectively. 

Fiscal 2003’s operating loss from continuing operations was $0.7 million due largely to the lack of revenue and 

the failure to achieve the gross margin needed to support the Company’s overheads. Bid competition was fierce, 

and the Company acquired projects at smaller margins in order to support the fixed costs to the best extent 

possible. Fiscal 2003’s operating loss from continuing operations as a percent of revenue was 1.7%. 

Fiscal 2004’s operating loss from continuing operations was $1.3 million because, as in the prior year, there was 

inadequate revenue and margins thereon to support the fixed overheads at a level needed to break even. In 

addition, the industrial sector was even weaker than in the prior year, obligating the company to seek and obtain 

44

work in the lower margin commercial sector. Fiscal 2004’s operating loss from continuing operations as a 

percent of revenue was 3.5% 

Fiscal 2005’s operating income from continuing operations was $0.3, disappointing given the larger than normal 

revenues. Some of the backlog that was carried into fiscal 2005 from the prior year was obtained at smaller than 

needed margins in order to provide the impetus to re-acquire a workforce that had been laid off in all of the 

jurisdictions. In addition, at times during the year, the Company found itself with a greater volume of work than it 

was able to produce within its own facilities, obligating it to sublet to other shops at low or no margin in order to 

meet deliveries. Fiscal 2005’s operating income from continuing operations as a percent of revenue was 0.4%. 

Net Income or (Loss) 

Net income (loss) for fiscal years ending December 31, 2003, 2004 and 2005 was $ (0.5) million, $ (0.8) million 

and $ 0.3 million respectively. 

Current Assets 

Current assets at December 31, 2003, 2004 and 2005 were $11.1 million, $11.3 million and $23.6 million 

respectively. 

Current assets at December 31, 2003 were $11.1 million. Accounts receivable were $9.8 million, including $2.9 

million in statutory holdbacks, a total amount that is considered reasonable, given the volume of contracts and the 

nature of the customers. Holdbacks vary from 0% to 10% of the contract price, and are withheld pending the 

issuance of a substantial completion certificate on any given project. Inventories were $1.1 million, a level 

considered reasonable by management, based on the company’s inventory strategy. Inventories are maintained 

only on certain items that are more economically purchased in bulk lots and are used on a repetitive basis, and 

each branch maintained a small quantity of these certain items. Any inventory considered slow moving has been 

price adjusted. 

Current assets at December 31, 2004 were $11.3 million. Accounts receivable were $10.3 million (including $1.5 

million in statutory holdbacks, somewhat higher than would normally be expected based on the annual volume, 

but reasonably consistent with the level of activity in Q4. Inventories were slightly under $1 million, a level 





Current assets at December 31, 2005 were $23.6 million. Accounts receivable were $22.5 million, including $4.1 

million in statutory holdbacks, a total amount significantly higher than would normally be expected, based on the 

volume and the nature of the contracts. At the year end, the company had, on two unrelated projects, accounts 

receivable related to work performed but not as yet approved for payment. Inventories were $ 1.1 million, a level 





Fixed Assets 

Fixed assets at December 31, 2003, 2004 and 2005 were $6.4 million, $5.2 million and $5.3 million respectively. 

45

Fixed assets at December 31, 2003 were $6.4 million, up slightly ($0.3 million) after depreciation, from the prior 

year . The major capital expenditure was $0.5 million for the completion of the new beam line in the Wabamun 

facility. 

Fixed assets at December 31, 2004 were $5.2 million, a reduction of $1.2 million from the prior year. During the 

year, two properties, the shop in Delta B.C. and the office building in Edmonton, were sold, in separate 

transactions, under sales/leaseback agreements, the proceeds of which were used to enhance working capital. 

Fixed assets at December 31, 2005 were $5.3 million, only marginally changed from the prior year. There were 

no significant capital additions, only small equipment acquisitions in the normal course of business. 

Total Assets 

Total Assets for the years ending December 31, 2003 were $18.7 million, comprised of $11.1 million current 

assets, $6.4 million capital assets, and $1.1 million investment in affiliated companies. 





Current Liabilities 

Current liabilities at December 31, 2003, 2004 and 2005 were $11.0 million, $10.6 million and $22.1 million 

respectively. 

Current liabilities at December 31, 2005 were $22.1 million, an amount consistent with the level of current assets, 

but nonetheless, considered too high for the normal business cycle. As a consequence, accounts payable to 

suppliers were stretched past normal terms, and in some cases, past agreed terms. The Company is in 2006, 

engaged in a financial restructuring designed to enhance working capital and to return the accounts payable to 

normal industry terms. The financial restructuring includes the raising of $1.6 million through a private share 

subscription and $6.1 million through the EIW Private Placement and the collection of holdbacks, outstanding 

claims and accounts receivables. 

Long Term Debt 

Long term debt at December 31, 2003, 2004 and 2005 was $ $1.2 million, $0.7 million and $1.5 million, 

respectively. 

Long term debt at December 31, 2003 was $ 1.2 million. During the year, the company increased its term debt by 

$0.4 million, both by consolidating into one lender and by financing equipment acquisitions in its Edmonton 

branch. 

Long term debt at December 31, 2004 was $0.7 million, and when coupled with the current portion, a total of $1.1 

million was owed to its primary lender under the term facility, an amount unchanged from the prior year other 

than by payments in the ordinary course of business. 

Long term debt at December 31, 2005 was $1.5 million, as stated on the balance sheet, and when coupled with the 

current portion, a total of $1.8 million was owed to the Company’s prime lender. During the year, the Company 

increased its term facility by $1.0 million in order to improve working capital 

46

Shareholders’ Loans and Shareholders’ Equity 

Shareholders’ equity at December 31, 2003, 2004 and 2005 was $2.5 million, $1.7 million and $2.0 million, 

respectively. 

Shareholders’ loans at December 31, 2003, 2004 and 2005 was $3.4 million, $3.1 million and $3.0 million, 

respectively. 

Description of Securities and Capitalization of Empire Iron 

The equity of Empire Iron consists of capital stock and shareholder loans as per the following table: 

Designation of securities 

Amount 

authorized 

Number Outstanding Number Outstanding as at May 

as at December 31, 

1, 2006 

2005 (1) 

common shares unlimited 966,000 32,500,000 

preferred shares unlimited none none 

shareholder loans n/a $3,019,877 $1,219,951 

(1) Empire Iron had retained earnings of $1,901,127 as at December 31, 2005. 

Description of Common Shares 

The Company is authorized to issue an unlimited number of common shares, unrestricted, at no fixed price, one 

vote per share, no dividend rights, no pre-emptive rights, and no redemption provisions. 

Reorganization of Common Shares 

The Company completed an amalgamation with Ward Empire Group Inc. on May 1, 2006 wherein each share of 

Empire Iron was converted to 26.56 shares of the amalgamated Empire Iron. 

Prior sales 

During the 12 months prior to the date of this Circular, Empire issued the following shares: 

Date 

Number of 

Shares 

Issue Price 

Per Share 

Aggregate 

Issue Price 

Nature of 

Consideration 

Received 

April 24, 2006 257,600 (1) $6.21 $ 1,600,000 Cash 

(1) These shares converted to 6,842,105 shares of Empire Iron following the amalgamation with Ward Empire Group on May 1, 2006. 

The Company also completed a private placement wherein 13,500,000 common shares were issued at the postamalgamation 

price of $0.45 per share for a total consideration of $6.075 million. 

Options Outstanding 

There are no options outstanding in Empire Iron. 

47

Warrants 

There are no warrants outstanding in Empire Iron 

Cash dividends declared. 

No dividends were declared in the years ending December 31 2003, 2004 and 2005. 

DESCRIPTION OF THE BUSINESS 

General 

Empire Iron is a steel fabricator and erector based in western Canada. The Company operates three divisions in 

the steel fabrication and erection business that represent approximately 80% of annual revenue and one division in 

the industrial construction business representing approximately 10% of annual revenue. The Company is also the 

parent company of two wholly-owned subsidiary companies based in Ontario that represent approximately 10% 

of annual revenue, each of which are operated independently. Empire Iron provides its divisions and subsidiaries 

with capital, centralized banking systems, safety training and human resource expertise, technology, sales and 

marketing and an overall business strategy. 

Empire Iron reports its business and financial results on a segmented basis. During 2005 the business of the 

Company was conducted in two operating segments – structural steel fabrication and erection and industrial 

construction. Subsequent to year end, a third business was acquired in the industrial equipment manufacturing 

segment. 

Segmented Operations 

Structural Steel Fabrication and Erection 

Empire Iron Works Ltd. (www.empireiron.com ) 

Hopkins Steel Works Ltd. (www.empireiron.com ) 

Overview 

Structural and miscellaneous steel is supplied for mining operations, pulp mills, process plants, hydro-electric 

plants, as well as any and all types of industrial, institutional and commercial projects. Plate steel fabrications 

include bridges, hydraulic gates, stop logs, precipitators, tanks, hoppers, chutes, breeching and engineered 

equipment. The annual tonnage capability varies depending on the type of fabrication. The Winnipeg and 

Wabamun plants are equipped with wheelabrating and painting facilities to accommodate multi-coat paint 

systems for a variety of highly corrosive environments. In addition, the Empire Iron has one of the largest boring 

and milling machines in western Canada, enabling Empire Iron to provide a complete service for machined 

products such as hydraulic gates, guides and stop logs. All fabrication is subject to an in-house quality assurance 

program that is compliant with CISC and AISC standards. 

Empire Iron erects fabricated structural and plate steel for its clients from site offices staffed to accommodate the 

size and complexity of each project. The skilled trades people are complemented by quality assurance, safety and 

administrative staff who ensure each project is erected to CISC and AISC standards, and is performed in a manner 

fully compliant with all Provincial safety regulations. 

48

Market and Service Areas 

Empire Iron conducts its business from facilities in Edmonton, Alberta; Delta, British Columbia; Winnipeg, 

Manitoba and Welland, Ontario (Hopkins Steel Works Limited). 

Equipment/Facilities/Properties/Employees 

See the following table segmenting operational statistics for these areas. 

Industry Position 

The principal competitors of Empire Iron vary by jurisdiction. In Manitoba and Saskatchewan, Empire Iron’s 

primary competitors are; Shopost, Iron Works, and Supreme Steel and Abesco. In Alberta, Empire Iron’s primary 

competitors are Supreme Steel, Waiward Steel Fabricators, C.W. Carry, Collins Industries, Eskimo Steel, 

Triangle Steel, TSE Steel, Rampart Steel and Whitemud Iron Works. In British Columbia, Empire iron’s primary 

competitors are Canron, George Third and Son, Amec Dynamic Structures, Solid Rock Steel, Westbridge Steel 

and X.L. Ironworks. 

Environmental and Regulatory Considerations 

Empire Iron often paints its fabricated assemblies and is subject to disposal and air emission issues related to this 

activity from time to time. The Company has operating policies and procedures in place to properly apply paint 

and dispose of empty paint containers according to the required regulations. 

Industrial Construction 

EIW Construction Services 

Overview 

Empire Iron’s construction services division is based out of Winnipeg, Manitoba and provides construction and 

maintenance service for industrial projects throughout western Canada. Projects employing unionized 

ironworkers, millwrights, operating engineers, pipefitters, boilermakers, electricians and other trades people, 

together with technical staff support, are supervised and coordinated by experienced construction managers and 

completed on schedule to the client’s satisfaction. The Company tends to target projects where multidiscipline 

trade construction is a part of, and complementary to, a steel fabrication and erection project. 


EIW Construction Services serves the industrial market in Manitoba, Saskatchewan and northern Ontario. In 

special situations, it has helped bid multi-trade construction projects in Alberta as well. 




EIW Construction Services primary competitors are; Comstock, Derksen Mechanical Services, Abco Supply and 

Service and Wescan Mechanical. 

49


There are no material environmental regulations impacting the provision of industria l construction services. 

Industrial Equipment Fabrication 

Ward Industrial Equipment Ltd. (“Ward”) (www.wardequipment.com ) (www.devansco.com) 

Overview 

Empire Iron acquired 100% of Ward effective April 1, 2006. Ward was incorporated in 1965 and operates out of 

a 49,000 square foot facility in Welland Ontario. Revenue approximates $4 million per year, with operating 

income of $110,658 (year ended December 31, 2005, review engagement financial statements). 


Ward’s sales vary year over year, but in general, 70% is in Ontario and Quebec and 20% is to the United States 

and the Caribbean and 10% is to western Canada and Asia. Management is of the view that the product line 

owned by Ward can continue to be designed, engineered and manufactured in Ontario and growth in equipment 

sales in western Canada can be fabricated in Empire Iron’s facilities in Western Canada. 




Ward competes with a number of competitors in the USA (i.e. Continental Conveyors and Supreme Conveyors) 

and Canada (i.e. Strongco Engineered Systems, Vandergeists, ELRuss). 


Ward paints its equipment and is subject to disposal and air emission issues related to this activity from time to 

time. Ward has operating policies and procedures in place to properly apply paint and dispose of empty paint 

containers according to the required regulations. 

Corporate Segment 

The Corporation’s corporate segment operates from a leased office premise in Toronto, Ontario and from its 

operational head office in Winnipeg, Manitoba. From these facilities the Corporation operates its head office and 

main administrative functions. As at the date hereof, the corporate head office employs four employees. 

50

The following table shows the segmented revenue for fiscal years ending December 31, 2002, 2003, 2004 

and 2005. 

Service 2002 Revenue (1) 2003 Revenue (1) 2004 Revenue (1) 2005 Revenue (1) 

Supply of Fabricated Steel 

(structural steel, plate steel 

and miscellaneous metals) 

$29,763 $21,112 $21,413 $43,420 

% of Total 68% 53% 59% 59% 

Erection of Fabricated Steel $10,067 $11,154 $9,799 $18,588 


Multidiscipline Trade 

Construction 

$3,939 $7,568 $5,081 $11,508 


Total $43,769 $39,834 $36,293 $73,516 

($ in thousands) for Years Ending December 31 


(1) audited financial statements 

Empire Iron’s revenue results during the 2002-2004 period mirrored the weak capital spending experienced in the 

non-residential construction sector. Empire Iron’s revenue doubled in 2005 compared to the prior year. This also 

reflected the significantly more robust non-residential construction spending in western Canada that happened in 

2005. In management's view, the increase in work experienced in 2005 and expected in the industry during the 

next decade may have a correspondent increase in margins as the industry operates at or near capacity. This is 

even more acute in western Canada where industrial capital expenditures haven risen significantly and are 

forecasted to continue at a frenetic pace. 

Empire Iron’s operations are strategically located in the four provinces in western Canada: Alberta, British 

Columbia, Manitoba and Saskatchewan. The Company’s clients operate in various industries, including; oil and 

gas, infrastructure, pulp and paper and mining. However, recent economic improvements, higher employment 

and increased capital spending levels have contributed to a rebound in ICI construction spending. In 

management's view, the demand for structural steel fabrication and erection arising from increasing ICI capital 

spending in western Canada will have a positive impact on western Canadian based steel fabricators. 

Geographic 

Region 


Revenue 


Revenue 


Revenue 


Revenue 

Saskatchewan/Manitoba/Ontario 57% 50% 48% 22% 

Alberta/Northwest Territories 23% 34% 26% 36% 

British Columbia/Alaska 18% 10% 22% 42% 

Other U.S. 2% 6% 4% --- 


Subsequent Events 

On February 1, 2006, the Company signed a letter agreement with Peter Kozicz and Joe Robertson (see “Prior 

Sales”) whereby they agreed to purchase $1.6 million of common shares from treasury. On April 24, 2006, this 

treasury issue was successfully closed. 

51

On March 9, 2006, the Company signed a letter agreement with Ryjencap, the principal conditions of which are 

more fully described elsewhere in this Circular. 

On March 14, 2006, the Company signed an engagement letter with Westwind Partners Inc., to, on a best efforts 

basis, sell up to 13,500,000 shares of Empire Iron. On May 9, 2006, the Company successfully closed its private 

placement of 13,500,000 common shares raising gross proceeds of $6.075 million. 

On April 1, 2006, Empire Iron acquired 100% of Ward Industrial Equipment Ltd. and its manufacturing facility 

for $1.7 million. This purchase was financed through the assumption of debt and the elimination of associated 

company advances. 

On May 1, 2006, the Empire Iron amalgamated with Ward Empire Group Inc., the company that owned 75% of 

its common shares and shareholders’ loans. The amalgamation included the conversion of $1.8 million of 

shareholder loans to common equity. 


The compensation paid in cash to these employees for services rendered appears in the following table: 

Annual compensation 

Long term compensation 

Grant 

Payouts 

Name and Principal 

Position 

Period 

Ended (1) 

Salary/Fees 

($) 

Bonus 

($) 

Other 

Annual 

Compensati 

on (common 

shares) 

Options 

granted 

(#) 

Restricted 

shares or 

restricted 

units ($) 

LTIP 

Payouts (1) 

Other 

Compe 

nsation 

($) (2) 

Guy Nelson, 

Chairman 


President and CFO 

Thor Gaul 

V.P. Operations 

Dec 31 05 $72,000 $8,020 nil nil nil nil nil 



Management Contracts 

There are three management contracts. The first is with Nelson Advisors Inc. (“NAI”). NAI has agreed to a three 

year contract commencing upon May 1, 2006, the date of the amalgamation of Ward Empire Group Inc. and 

Empire Iron. Mr. Nelson is the principal shareholder of NAI. NAI has committed to have Mr. Nelson spend 

1,400 hours per year working on the Company’s business and will be paid $150,000 per annum. Mr. Nelson has a 

bonus plan that is tied to several financial performance metrics. The bonus will range from zero to eighty 80% of 

his base salary depending upon performance. 

The second management contract is with Campbell McIntyre. Mr. McIntyre has agreed to a three year contract on 

a full-time basis commencing upon shareholder approval of the Qualifying Transaction. Mr. McIntyre will be paid 

a base salary of $135,000 per annum. Mr. McIntyre has been grandfathered under the historical “contractual” 

bonus plan that has been in place at Empire Iron prior to the acquisition equating to 3% of pre-tax earnings of 

Empire Iron. 

52

The third management contract is with Thor Gaul. Mr. Gaul has agreed to a three year contract on a full-time 

basis commencing upon shareholder approval of the Qualifying Transaction. Mr. Gaul will be paid a base salary 

of $135,000 per annum. Mr. Gaul has been grandfathered under the historical “contractual” bonus plan that has 

been in place at Empire Iron prior to the acquisition equating to 3% of pre-tax earnings of Empire Iron. 

Related Party Transactions 

During 2004, the Company entered into two separate agreements to sell and leaseback certain of its land and 

buildings, with the full gain on disposition being deferred for future recognition, on a straight line basis, over the 

eight year term of the leases. Of the original deferred $891,829 gain, $111,500 has been recognized in earnings 

for the year ended December 31, 2005. All other transactions with related companies, in each of 2003, 2004, and 

2005 were in the ordinary course of business, and measured at the exchange amount. 

Empire Iron Private Placement 

An engagement letter was signed March 14, 2006, with Westwind Partners Inc. to offer Empire Iron shares on a 

best efforts basis. The EIW Private Placement was to be for a minimum of $1,000,000 and a maximum of 

$6,075,000. The shares are priced at $0.45 per share for a minimum offering of 2,222,222 shares and a maximum 

of 13,500,000 shares. The EIW Private Placement closed May 9, 2006 issuing 13,500,000 common shares and 

raising $6.075 million. 

Legal Proceedings 

There are no material legal proceedings that the Company is party to. 

Material Contracts 

The following table summarizes the material property leases that the Company is a party to: 

Square footage Expiry Date $ per sq.ft. $ per year 

7501 Vantage Way, Delta, BC 22624 31-Dec-12 $5.97 $135,000 

21104 107 Avenue, AB 9200 30-Nov-12 $5.87 $54,000 

717 Jarvis Ave., Winnipeg, MA 3100 month by month $8.13 $25,200 

2 Broadway Avenue, Welland, ON 27750 31-Aug-08 $2.02 $56,000 

In addition to these property leases there are the three management contracts outlined above 

There are numerous contracts to perform work that the Company is party to, but in the opinion of management, 

they are all in the normal course of business. 

Copies of the above-noted material contacts are available for inspection, without charge, at the head office of 

Empire Iron, 1001 Jarvis Avenue, Winnipeg Manitoba, R2X 0A1, until the date of the shareholders’ meeting to 

approve the Qualifying Transaction and for a period of 30 days after such date. 

53

PART V 

INFORMATION CONCERNING 

THE RESULTING ISSUER 

Corporate Structure 

Name and Incorporation 

The corporate name of the Resulting Issuer will be “Empire Industries Ltd.”. The head office of the Resulting 

Issuer will be located at 1001 Jarvis Avenue, Winnipeg MB, and it will retain its registered office at 3rd Floor 

14505 Bannister Rd. SE, Calgary, AB. 

There are no other changes planned for the jurisdiction under which the Resulting Issuer is incorporated (Alberta) 

or the articles or constating documents of the Corporation. 

Intercorporate Relationships 

The following diagram sets out the intercorporate relationships along the Resulting Issuer and its subsidiary on 

Completion of the Qualifying Transaction: 

Empire Industries Ltd. 

- incorporated in Alberta 

100% 

Empire Iron Works Ltd. 

- incorporated in Manitoba 

100% 100% 

Ward Industrial 

Equipment Ltd. 

- incorporated in Ontario 

Hopkins Steel Works 

Ltd. 

- incorporated in Ontario 

54

Narrative Description of the Business 

Stated Business Objectives 

The business of the Resulting Issuer following completion of the EIW Acquisition will be the business of Empire 

Iron. The company is aware that opportunities in the Canadian market place, and in particular the Western 

Canadian market place for the supply and installation of structural steel are expected to reach levels where the 

demand will be greater than the existing supply capabilities. As such, the funds generated as part of the overall 

financial restructuring, including the acquisition by Ryjencap will be used to establish a larger and more profitable 

share of the market. In order to do so, several strategic milestone events are contemplated. 

Milestones 

Empire Iron has been in business for over forty years and it has set the following near-term priorities; 

• Continue to attract and retain the key management and technical personnel. In particular, key staff 

acquisitions are planned for the Alberta branch to strengthen the estimating and contracting departments. 

This is underway and expected to be completed by June 15, 2006. 

• Continue to upgrade its health and safety program and its quality assurance program to stay consistent 

with the needs of the ever changing marketplace. This is an ongoing, dynamic process. 

• Strengthen its market share in Alberta and British Columbia through selective acquisitions. The company 

has adopted a plan to complete a strategic acquisition in BC by August 31, 2006, and a strategic 

acquisition in Alberta by December 31, 2006. 

• Increase the fabrication capability in Manitoba, either by acquiring or building additional shop space. The 

company has adopted a plan to complete this phase by March 31, 2007. 

• Improve its fabricating efficiency with the addition of strategic equipment. The company plans to acquire 

additional CNC equipment in both of its Manitoba and Alberta facilities, on or before June 30, 2007. 

Description of Securities 

The Resulting Issuer will have the same share capital as the Corporation. See “Part IV – Information Concerning 

the Issuer - Description of Securities”. 

Pro Forma Consolidated Capitalization 

The following table sets out the composition of the Resulting Issuer’s share and shareholder loan capital after 

subsequent events and Completion of the Qualifying Transaction: 

55

Designation of securities 

Amount 

authorized 

Number Outstanding 

as at May 18, 2006 

Amount outstanding after 

giving effect to the Qualifying 

(1) (2) (3) 

Transaction 

common shares unlimited 12,000,000 49,300,000 

preferred shares unlimited none none 

shareholder loans n/a n/a $1,219,951 

(1) This assumes a 4 for 1 consolidation of the Common Shares of the Corporation and completion of the financing under the EIW Private 

Placement. 

(2) Following Competion of the Qualifying Transaction, the current directors of the Corporation have expressed their intention to exercise 

options for a minimum of 250,000 post-consolidated Common Shares. The Resulting Issuer proposes to issue additional options to acquire 

up to 4,000,000 post-consolidated Common Shares (see also, “Part V Information Concerning the Resulting Issuer - Stock Options”). 

(3) The retained earnings of Empire Iron as at December 31, 2005 were $1.9 million. 

Fully Diluted Share Capital 

The following table sets out the composition of the share capital of the Resulting Issuer on a fully diluted basis 

assuming that an additional maximum $5 million will be raised pursuant to the EIW Private Placement: 

Description of Securities Current Securities Consolidated 4:1 Percentage Fully Diluted 

Ryjencap: 

Common Shares 12,000,000 3,000,000 5.6 

Stock Options 1,200,000 (reserved) 300,000 (reserved) 0.6 

Agent Options 1,000,000 (reserved) 250,000 (reserved) 0.5 

Empire Iron: 

14,200,000 3,550,000 

Common Shares 46,000,000 85.4 

Empire Iron Shares to be Issued: 

Bretman Financial Corp 300,000 0.6 

New Stock Options 4,000,000 

7.4 

(reserved) 

Total Pro Forma Issued and 

Outstanding 

53,850,000 100 

56

Available Funds and Principal Uses 

Available Funds 

Upon Completion of the Qualifying Transaction, the Funds Available to the Resulting Issuer will be as set out in 

the following table assuming completion of the EIW Private Placement, from the following sources: 

Source 

Funds 

Ryjencap working capital as at February 28, 2006 $800,000 

Empire Iron working capital as at March 31, 2006 (1) $3,567,500 

Proceeds from EIW Private Placement $6,075,000 

(1) Based on management prepared financial statements. 

Principal Use of the Funds 

Total $10,442,500 

The Resulting Issuer intends to use part of the Available Funds for the following purposes, listed by order of 

priority, assuming completion of the EIW Placement: 

Proposed Use 

Amount 

Acquisitions $3,000,000 

Debenture repayments $1,220,000 

Facility expansion at owned site in Alberta $2,000,000 

Commissions and closing costs $600,000 

Working capital $3,622,500 

Total $10,442,500 

It is the Resulting Issuer’s intention to use the Available Funds to attain the objectives mentioned above, once the 

Qualifying Transaction is completed. It is possible however that for valid commercial reasons the funds may be 

reallocated to allow the Resulting Issuer to attain its objectives. 

The amounts received from the exercise of stock options of the Resulting Issuer will be allocated to the working 

capital needs of the Resulting Issuer. 

Dividends 

There is no restriction prohibiting the Resulting Issuer from paying dividends. It is not contemplated that any 

dividends will be paid on the Resulting Issuer’s Common Shares in the foreseeable future. The Resulting Issuer 

may be prevented from paying dividends if it does not meet statutory tests allowing it do so. 

57

Principal Shareholders 

Once the EIW Private Placement and the Qualifying Transaction have been completed, the following persons will 

be the owners of record or beneficially, directly or indirectly, of more than 10% of the issued and outstanding 

shares of the Resulting Issuer. 

Share Capital and Percentages 

Name 

Number of Common 

Shares 

Percentage Ownership 

Before Qualifying 

Transaction 

Guy Nelson, Toronto, ON 9,431,698 (1) 20.4 % 19.1 % 

5,479,938 (2) 11.8 % 11.1 % 

Steven H. Lockwood, 

Calgary, AB 

Percentage Ownership 

after Qualifying Transaction 

(1) Shares are owned by Nelson Advisors Inc., a private company owned by Guy Nelson and his family 

(2) Of this total number of shares beneficially owned by Mr. Lockwood, 409,268 shares are held directly, 280,705 are held by Ann 

Lockwood, his spouse, 3,728,901 shares are held by SHL Professional Corp., and 1,061,064 shares are held by the Lockwood Family 

Trust. 

Directors, Officers and Promoters 

Name, address, position and number of securities held 

The following are the names and addresses of the directors, officers and promoters of the Resulting Issuer, their 

positions and offices and the number of securities they hold, assuming completion of the minimum EIW Private 

Placement. 

NAME AND 

MUNICIPALITY OF 

RESIDENCE 

OFFICE 

NUMBER OF 

SECURITIES 

AND 

PERCENTAGE (1) 

POSITIONS HELD OVER THE LAST FIVE 

YEARS 

Guy Nelson 

Toronto ON 

Chairman of the 

Board and CEO 

9,431,698 (2) 

19.1% 

President and principal of Nelson Advisors Inc., a 

private company providing consulting advice to a 

number of companies involved in steel fabrication, 

manufacturing, construction related services, 

agricultural processing 


Winnipeg MB 

President, CFO and 

director 

1,593,658 

3.2% 

President and Chief Financial Officer of Empire Iron 

since 1996. Mr. McIntyre has been with Empire Iron 

since 1976 as a partner and in senior management 

capacities 

Peter Kozicz 

Oakville ON 

director 3,421,052 (3) 

6.9% 

Currently President of Arlea Corporation. a private 

company, since May, 2001. From 1997 to 2001 was 

President, CEO and Director of Mad Catz Interactive 

Inc., a public company that designs, develops and 

manufactures accessories for video game consoles 

and PC gaming systems. Also, is currently a director 

of Dominion Citrus Limited, a public company listed 

on the TSX. 

58

NAME AND 

MUNICIPALITY OF 

RESIDENCE 

OFFICE 

NUMBER OF 

SECURITIES 

AND 

PERCENTAGE (1) 

POSITIONS HELD OVER THE LAST FIVE 

YEARS 

Joe Robertson 

Toronto ON 

director 3,421,053 (4) 

6.9% 

Chairman of Henry Schein Ash Arcona Inc., a 

medical products distribution company, since 

January 2006. President of Henry Schein Ash 

Arcona Inc. since 1989. 

(1) Assuming Completion of the Qualifying Transaction. 

(2) Shares are owned by Nelson Advisors Inc., a private company owned by Guy Nelson and his family. 

(3) Shares are owned equally by Mr. Kozicz and his spouse. 

(4) Shares are owned by the Anita Robertson Family Trust. Anita Robertson is Mr. Robertson’s spouse. 

Management 

The following persons are the senior officers and directors of the Company and will continue to be management 

of the Resulting Issuer once the Qualifying Transaction is completed. 

Mr. Guy Nelson, age 51, Chairman (and CEO after giving effect to the EIW Private Placement). Mr. Nelson has 

been the President and principal of Nelson Advisors Inc. ("NAI") since 1996. NAI is a private company 

providing consulting advice to companies that a significant or controlling equity investment is held. The principal 

companies that Mr. Nelson has been Chairman of Empire Iron since 1996. Mr. Nelson also has served as CEO of 

Associated Proteins Limited Partnership since 2004. Mr. Nelson is also a director of Producers Oilfield Services 

Inc., an energy services company based in Western Canada, which is listed on the Toronto Stock Exchange. Mr. 

Nelson has also served on the board of directors of Venquest Capital Inc. (2004 to 2005), a capital pool company 

listed on the TSX Venture Exchange, Mullen Transportation Ltd. (1994 to 2004), an energy services company 

which is listed on the Toronto Stock Exchange and Bracknell Corporation (1991 to 1997), an infrastructure 

support services company, which was listed on the Toronto Stock Exchange. Mr. Nelson holds an MBA from the 

Richard Ivey School of Business (University of Western Ontario) and a Bachelor of Commerce degree from the 

University of Alberta. 

Mr. Campbell McIntyre, C.A., age 58 has been the President and CFO of Empire Iron since 1996. Mr. McIntyre 

was Empire Iron’s CFO and director between 1976 and 1995. He has been instrumental in overseeing the 

profitable growth of Empire Iron from a small miscellaneous fabricator of ornamental steel in Winnipeg 

generating less than $10 million in sales in 1976 to a multi-facetted fabricator and erector of steel products in six 

profit centres, generating $73 million in sales out of 190,000 square feet of leased and owned facilities. Prior to 

being hired by Empire Iron, Mr. McIntyre was in public practice as a chartered accountant and one of his clients 

was Empire Iron. He was at Kelm, Neufeld, Gateson & Co. as an employee, associate and partner from 1968 to 

1976. Mr. McIntyre has been active in a variety of community service organizations in Winnipeg over the years. 

Mr. Peter Kozicz, age 45, will become an independent director of Empire Iron after the Transaction. Mr. Kozicz 

has been the President of Arlea Corporation ("Arlea") since 2001. Arlea is a private company that provides 

consulting advice to companies and makes equity investments. The principal companies that Mr. Kozicz 

currently advises are involved in agricultural processing, fresh produce processing and a wireless data company. 

From April 1997 to May 2001, he was the President, Chief Executive Officer and a director of Mad Catz 

Interactive Inc., a public company listed on the Toronto Stock Exchange that designed, developed and 

manufactured accessories for video game consoles and PC gaming systems. Mr. Kozicz was the Secretary and a 

director of Canadian Public Venture Equities I Inc., a capital pool corporation listed on TSX Venture Exchange 

that completed its Qualifying Transaction and is now Allen-Vanguard Corporation, from July 2003 to November 

2003. Mr. Kozicz was the Chief Financial Officer, Secretary and a director of Canadian Public Venture Capital I 

59

Inc., a capital pool corporation listed on the TSX Venture Exchange that completed its Qualifying Transaction 

and is now Exeltech Aerospace Inc., from March 2003 to June 2004. Mr. Kozicz is also currently a trustee of 

Dominion Citrus Income Fund, a public income trust listed on the Toronto Stock Exchange. Mr. Kozicz holds an 

MBA and a Bachelor of Science degree in civil engineering from Queen’s University. 

Mr. Joe Robertson, age 46, will become an independent director of Empire Iron after the Transaction. Mr. 

Robertson is currently Chairman of Henry Schein Ash Arcona Inc. ("HSA"). HSA is the leader in the Canadian 

dental supply industry. Mr. Robertson was the President of HSA and its predecessor company between 1989 and 

2005. He acquired the predecessor company to HSA in 1989 and grew the business from 5 employees and $1 

million in revenue to $250 million in revenue, 950 employees and 13 branches across Canada. Henry Schein 

acquired the predecessor company in 1998. Prior to being at HSA, Mr. Robertson was a Vice President of 

Lincoln Capital Corporation from 1987 to 1989, a merchant bank publicly listed on the Toronto Stock Exchange. 

Mr. Robertson held several positions in Toronto and New York while he was at the Mercantile Bank of Canada 

between 1982 and 1985. Mr. Robertson has an MBA from Harvard and a Bachelor of Commerce from Carleton 

University. 

All officers of the company are employed by the company on a full time basis and have signed or intend to sign 

non-disclosure and non-competition agreements in favor of the Resulting Issuer. 

Promoters 

Guy Nelson and Campbell McIntyre may be considered Promoters of the Resulting Issuer as they took the 

initiative in substantially reorganizing the business of the Resulting Issuer. Other than as set out in Part V – 

Information concerning the Resulting Issuer – Directors, Officers and Promoters, in “Executive Compensation” in 

the same section and in Part IV – “Information Concerning Empire Iron – Material Contracts”. 

Corporate Cease Trade Orders or Bankruptcies 

No director, officer or promoter of the Corporation or Empire Iron was a director, officer or promoter of any other 

issuer that was, during his tenure, the subject of a cease trade order or similar order or an order that denied that 

issuer access to any statutory exemptions for a period of more than 30 consecutive days, or was declared bankrupt 

or made a voluntary assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or 

insolvency or been subject to, or instituted, a proceeding, arrangement or compromise with creditors, or had a 

receiver, receiver manager or trustee appointed to hold its assets. 

Penalties, Sanctions or Undertakings 

No current or proposed director, officer, promoter or other member of management of the Corporation or Empire 

Iron has, during the ten years prior to the date hereof, been subject to any penalties or sanctions imposed by a 

court or securities regulatory authority relating to trading in securities, promotion, formation or management of a 

publicly traded Company, or involving fraud or theft. 

Individual Bankruptcies 

No current or proposed director, officer, promoter or other member of management of the Corporation or Empire 

Iron has, during the five years prior to the date of this Circular, been declared bankrupt or made a voluntary 

assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or insolvency or has been 

subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver 

manager or trustee appointed to hold his or her assets. 

60

Conflicts of Interest 

There are potential conflicts of interest to which the officers and directors of the Corporation will be subject in 

connection with the operations of the Corporation. The officers and directors are engaged and will continue to be 

engaged in businesses on their own behalf and situations may arise where these officers and directors will be in 

direct competition with the Corporation. Conflicts, if any, will be subject to the procedures and remedies under 

the ABCA prior to the EIW Acquisition, and the OBCA after the EIW Acquisition (see Part V - “Information 

Concerning the Resulting Issuer – Conflicts of Interest”). 

Other Reporting Issuer Experience 

The proposed directors and officers of the Resulting Issuer named in this Circular who have been directors, 

officers and/or promoters of other reporting issuers within the last five years prior to the date of this Circular, 

including the periods during which they have acted in such a capacity, are: 

Name Name of Reporting Issuer Stock 

Exchange 

Guy Nelson Producers Oilfield Services Inc. 

TSX 

Position 

Director 

Period 

May 05 to present 

Venquest Capital 

TSX 

Venture 

Director 

July 04 to 2005 

Mullen Transportation 

TSX 

Director 

Mar 94 to Mar 04 

Bracknell Corporation 

TSX 

Vice-President 

and Director 

Mar 91 to Mar 97 

Peter Kozicz 

Mad Catz Interactive Inc. 

TSX 

President, CEO 


Apr 97 to May 01 

Automodular Corporation 

TSX 

Director 

Jan 99 to Apr 01 

Dominion Citrus Limited 

TSX 

Director 

Jan 01 to present 

Multi-Glass International Corp. 

TSX Venture 

Director 

Sep 02 to Sep 04 

Canadian Public Venture Equities I Inc. 

Canadian Public Venture Capital I Inc. 

Vanguard Response Systems Inc. 

TSX Venture 

TSX Venture 

TSX 

Secretary and 

Director 

CFO, Secretary 


Director 

Jul 03 to Nov 03 

Mar 03 to Jun 04 

Nov 03 to Mar 04 

Venquest Capital Ltd 

TSX Venture 

Director, Secretary 

Jul 04 to present 


During the year ended December 31, 2005, Empire Iron employed three senior officers. The compensation paid in 

cash to these senior officers by Empire Iron for services rendered is set out in the table in “Part IV – Information 

Concerning Empire Iron – Executive Compensation”. The base salaries for 2005 at Empire Iron are, respectively: 

$72,000 for Mr. Nelson in his capacity as Chairman, $120,000 for Campbell McIntyre as President and CFO; 

$120,000 for Thor Gaul as Vice President Operations (see, “Part IV Information Concerning Empire Iron- 

Material Contracts”). 

61

Mr. Nelson will be changing his role and increasing his time commitment by assuming the title of CEO upon May 

1, 2006, the date of the amalgamation between Ward Empire Group Inc. and Empire Iron. It is expected that the 

base salaries at the Resulting Issuer will be, respectively: $150,000 for Mr. Nelson (Chairman and CEO) and 

$135,000 for Mr. McIntyre (President and CFO). Mr. Nelson’s bonus could range from 0% to 80% of base salary 

calculated on corporate performance and Mr. Nelson’s personal performance as measured against specific 

performance metrics. Mr. McIntyre has been grandfathered on his bonus plan and will be entitled to 3% of 

Empire Iron’s pre-tax income. 

Indebtedness of Directors and Officers 

As at December 31, 2005, and as at December 31, 2004 no director or officer has any debt obligation to the 

Company. 

Investor Relations Arrangements 

Upon Completion of the Qualifying Transaction, the Resulting Issuer intends to enter into an investor relation’s 

agreement with Surefund Capital Corporation of Thornhill Ontario, upon terms and conditions to be agreed by the 

parties. Mr. Gary Perkins is the President of Surefund Capital Corporation and Ms. Faryl Joan Perkins, Mr. 

Perkins’ spouse, is its chairperson and sole shareholder. It is anticipated that Surefund Capital Corporation will 

commence providing services under this agreement shortly after Completion of the Qualifying Transaction. The 

services will principally be provided by Mr. Gary Perkins, principal of Surefund Capital Corporation. Mr. 

Perkins has more than 8 years experience in various capacities with public companies and has provided similar 

services to other companies listed on the Exchange. Ms. Faryl Perkins will hold, indirectly through Bretman 

Financial Corporation, a total of 300,000 shares of the Resulting Issuer. Ms. Perkins has voting control over 

Bretman Financial. 

Stock Options 

The following table sets out, as at the date of this Circular, the expected number of options to purchase Common 

Shares of the Resulting Issuer that will be held upon completion of the Qualifying Transaction: 

Name 

Existing directors’ 

stock options 

Guy Nelson 

Position held with the 

Resulting Issuer 

Number of 

options 

62 

Weighted Avg 

Exercise price 

Expiry date 

Current Directors 50,000 (1) $0.40 (2) June 29, 2010 

Chairman of the Board and 

CEO 

200,000 $0.55 7 years from grant 

Campbell McIntyre President, CFO and director 200,000 $0.55 7 years from grant 

Peter Kozicz Director 200,000 $0.55 7 years from grant 

Joe Robertson Director 200,000 $0.55 7 years from grant 

Thor Gaul VP Operations 200,000 $0.55 7 years from grant 

Employees of 

various Up to 3,000,000 $0.55 7 years from grant 

Empire Iron 

Total 4,050,000 

(1) This number assumes that the current directors will be exercising options to acquire 250,000 post -consolidated Common Shares on completion of the 


(2) This exercise price is based on a pre-consolidation exercise price of $0.10 per share.

Immediately following Completion of the Qualifying Transaction it is expected there will be up to a total of 

4,050,000 options to acquire common shares of the Resulting Issuer issued and outstanding. 

Stock Option Plan 

If approved by the shareholders at the Meeting, the Stock Option Plan will become the stock option plan of the 

Resulting Issuer. A copy of the Stock Option Plan is attached to this Circular as Schedule "A". 

Pursuant to the regulations of Exchange, the number of Common Shares reserved for issuance pursuant to the 

exercise of options cannot exceed 10% of the total number of issued and outstanding Common Shares. 

Furthermore, the number of Common Shares reserved for issuance to any individual director or officer of the 

Corporation cannot exceed 5% of the issued and outstanding Common Shares and the number of Common Shares 

reserved for issuance to technical consultants, if any, cannot exceed, in the aggregate, 2% of the issued and 

outstanding Common Shares. 

The options may be exercised no later than 90 days following the date the optionee ceases to be a director, officer 

or consultant of the Corporation, provided that if the cessation of office, directorship, or technical consulting 

arrangement is by reason of death, the option may be exercised within a maximum period of one year after such 

death, subject to the expiry date of such option. Any Common Shares acquired pursuant to the exercise of options 

prior to the Completion of the Qualifying Transaction must be deposited in escrow and will be subject to escrow 

until the Final Exchange Bulletin is issued. 

Escrowed Shares 

IPO Escrow Agreement 

A total of 2,000,000 pre-consolidated Common Shares are currently held in escrow pursuant to the IPO Escrow 

Agreement. 

After Completion of the Qualifying Transaction a total of 1,800,000 Common Shares will be held in escrow 

pursuant to the IPO Escrow Agreement. The current holders of the escrowed shares under the IPO Escrow 

Agreement are set out in the table below: 

Security Holder - 

Name and City of 

Residence 

Terry Rogers 

Surrey, BC 

Don Terry 

Surrey, BC 

Brent Atkinson 

New Westminster, 

BC 

Basil Cuddihy 

Calgary, AB 

Mark Ferguson 

Prior to Completion of Qualifying 

Transaction 

Common Shares Percentage of 

(1) (2) 

held in Escrow Common Shares 

Issued 

63 

After Completion of Qualifying Transaction 

Common Shares Issued 

and Escrowed (2) 

Percentage of Common 

Shares issued (Basic) 

125,000 4.2% 12,500 < 1% 

125,000 4.2% 12,500 < 1% 

125,000 4.2% 12,500 < 1% 

75,000 2.5% 7,500 < 1% 

50,000 1.7% 5,000 < 1% 

Calgary, AB 

Total 500,000 16.8 50,000 < 1% 

(1) Escrowed pursuant to the IPO Escrow Agreement. In connection with the Qualifying Transaction, 450,000 of these Common Shares will be 

sold to Joe Robertson, a nominee director of the Resulting Issuer, at a price of $0.40 per share. The Common Shares so sold will remain in escrow 

pursuant to the terms of the IPO Escrow Agreement. 

(2) Common Shares expressed on a post -consolidated (4:1) basis.

Principals of the Resulting Issuer, their associates and other shareholders, will hold 23,347,399 Common Shares 

that will be escrowed in accordance with Exchange Policy 5.4. The 23,347,399 escrowed shares, in total, will 

represent 47% of the issued and outstanding shares of the Resulting Issuer on listing, and will be owned by the 

following individuals: 

Name of Escrow Holder Number of Shares Percentage of Total 

Escrowed Shares (1) 

Percentage of Outstanding 

Shares on Listing (Basic) (2) 

Guy Nelson 9,431,698 40.4% 19.1% 

Steven Lockwood 5,479,938 23.5% 11.1% 

Peter Kozicz 3,421,052 14.7% 6.9% 

Joe Robertson 3,421,053 14.7% 6.9% 

Campbell McIntyre 1,593,658 6.8% 3.2% 

Total 23,347,399 100% 47.2% 

(1) Based on a total of 23,347,399 escrowed shares. 

(2) Based on 49,300,000 shares outstanding on completion of the Qualifying Transaction. 

Although the Exchange has not yet reviewed or approved these escrow requirements it is anticipated that 

23,347,399 shares will be escrowed pursuant to a Value Security Escrow Agreement to be dated concurrently 

with the Completion of the Qualifying Transaction, in the form prescribed by the Exchange (the "Value Escrow 

Agreement"), with CIBC Mellon Trust Company acting as escrow agent. It is expected that the Resulting Issuer 

will meet Tier 1 minimum listing requirements and that the Value Escrow Agreement will provide that 25% of the 

escrowed shares will be released upon final Exchange acceptance of the Qualifying Transaction, and 25% of the 

original number of shares will be released each six months thereafter. 

During the time that any shares are held in escrow, the holder of such shares may not sell, transfer, assign, 

mortgage, enter into a derivative transaction concerning, or otherwise deal in any way with the shares without the 

prior approval of the Exchange. Subject to compliance with the terms of the Value Escrow Agreement, the 

Exchange may approve a transfer of escrowed shares within escrow under the following circumstances: 

(a) 

(b) 

(c) 

The pledge, mortgage or charge of escrowed shares to a financial institution as collateral for a 

loan, and any subsequent transfer of the shares upon the realization of the collateral; 

The transfer of escrowed shares to existing or, upon their appointment, incoming directors or 

senior officers of the Company or any of its material operating subsidiaries; 

The transfer of escrowed shares to a person or company that before the proposed transfer holds 

more than 20% of the voting rights attached to the Company's outstanding shares, or to a person 

or company that after the proposed transfer 

(i) 

Will hold more than 10% of the voting rights attached to the Company’s outstanding 

shares, and 

64

(ii) 

Has the right to elect or appoint one or more directors or senior officers of the Company 

or any of its material operating subsidiaries; 

(d) 

(e) 

(f) 

(g) 

The transfer of escrowed shares to a trustee in bankruptcy or another person or company entitled 

to escrow shares on bankruptcy; 

The transfer of escrowed shares to or between a registered retirement savings plan, registered 

retirement income fund or other similar registered plan or fund with a trustee, where the 

beneficiaries of the plan or fund are limited to the spouse, children and parents of the shareholder; 

The transfer of escrowed shares to an offeror or other person in connection with certain 

prescribed business combinations; and 

Any transfer of escrowed shares that the Exchange in its discretion, upon application, may 

approve. 

The Value Escrow Agreement will also provide that the escrowed shares of a holder will be released upon the 

death of the holder. 

Auditors, Transfer Agent and Registrar 

If their nomination is approved at the Meeting, the auditors of the Resulting Issuer will be Scarrow & Donald 

LLP, 100 - Five Donald Street, Winnipeg, MB R3L 2T4. The transfer agent and registrar of the Resulting Issuer 

will be CIBC Mellon Trust Company, at its office located at 333, 7 th Avenue SW, Suite 600, Calgary, Alberta, 

T2P 2Z1. 

65

PART VI 

GENERAL MATTERS 

Other Material Facts 

There are no other material facts relating to the Corporation or Empire Iron as well as to the Qualifying 

Transaction not disclosed elsewhere in this Circular. 

Board of Directors Approval 

The board of directors of the Corporation has approved the content and mailing of this Information Circular. 

66

CERTIFICATE OF THE CORPORATION 

Dated: May 18, 2006 

The foregoing and the Schedules constitute full, true and plain disclosure of all material facts relating to the 

securities of Ryjencap Inc. assuming completion of the Qualifying Transaction. 

RYJENCAP RESOURCES INC. 

(signed) "Terry Rogers" 

Terry Rogers 

Chief Executive Officer 

(signed) "Mark Ferguson" 

Mark Ferguson 

Chief Financial Officer 

ON BEHALF OF THE BOARD OF DIRECTORS 

The board of directors of the Corporation has approved the content and filing of the present Circular. 

(signed) "Don Terry" 

Don Terry, Director 

(signed) “Brent Atkinson” 

Brent Atkinson, Director 

67

CERTIFICATE OF EMPIRE IRON WORKS LTD. 

Dated: May 18, 2006 

The foregoing and the Schedules, as it relates to Empire Iron Works Ltd. constitute full, true and plain disclosure 

of all material facts relating to the securities of Empire Iron Works Ltd. 

(signed) "Guy Nelson" 

Guy Nelson 

Chairman 

(signed)"Campbell McIntyre" 


President & Chief Financial Officer 

ON BEHALF OF THE BOARD 

The board of directors of Empire Iron Works Ltd. has approved the content and filing of the present Circular. 

(signed) "Thorsten Gaul” 

Thorsten Gaul, Director 

(signed) "Stephen Lockwood" 

Stephen Lockwood, Director 

68

SCHEDULE “A” 

EMPIRE INDUSTRIES LTD. 

STOCK OPTION PLAN 

1. Purpose of the Plan 

The purpose of this Stock Option Plan (the "Plan") is to assist Empire Industries Ltd. (the 

“Corporation”) in attracting, retaining and motivating directors, officers, employees and 

consultants of the Corporation and of its subsidiaries and to closely align the personal interests of 

such directors, officers, employees and consultants with those of the shareholders by providing 

them with the opportunity, through options, to acquire common shares of the Corporation. 

2. Implementation 

The grant and exercise of any options under the Plan are subject to compliance with the 

applicable requirements of each stock exchange on which the shares of the Corporation are or 

become listed and of any governmental authority or regulatory body to which the Corporation is 

subject. 

3. Administration 

The Plan shall be administered by the board of directors of the Corporation which shall, 

without limitation, have full and final authority in its discretion, but subject to the express 

provisions of the Plan, to interpret the Plan, to prescribe, amend and rescind rules and regulations 

relating to it and to make all other determinations deemed necessary or advisable for the 

administration of the Plan, subject to any necessary shareholder or regulatory approval. The 

board of directors may delegate any or all of its authority with respect to the administration of the 

Plan and any or all of the rights, powers and discretions with respect to the Plan granted to it 

under this Plan to such other committee of directors of the Corporation as the board of directors 

may designate. Upon any such delegation the committee of directors, as well as the board of 

directors, shall be entitled to exercise any or all of such authority, rights, powers and discretions 

with respect to the Plan. When used in the context of this Plan “board of directors” shall be 

deemed to include the Compensation Committee or other committee of directors acting on behalf 

of the board of directors. 

4. Number of Optioned Shares 

A maximum number of common shares equal to 10% of the issued and outstanding 

common shares of the Corporation, from time to time, (the “Optioned Shares”) shall be reserved

for issuance to such directors, officers, employees and consultants of the Corporation and of its 

subsidiaries as the board of directors may determine ("Participants") in accordance with the 

Plan. If option rights granted to a Participant under the Plan expire or terminate for any reason 

without having been exercised in respect of certain Optioned Shares, such Optioned Shares may 

be made available for other options to be granted under the Pla n. 

(a) 

Individual Participant 

No individual Participant may be granted options to purchase common shares totalling 

more than 5% of the issued and outstanding common shares in any one 12 month period unless 

the Corporation has obtained disinterested shareholder approval in respect of such grant and it 

meets applicable TSX Venture Exchange requirements. 

(b) 

Consultants 

No one individual acting as a consultant to the Corporation (or any of its subsidiaries or 

affiliates) may be granted options to purchase common shares totalling more than 2% of the 

issued and outstanding common shares in any one 12 month period. 

(c) 

Investor Relations 

No one individual providing investor relations services to the Corporation may be granted 

options to purchase common shares totalling more than 2% of the issued and outstanding 

common shares in any one 12 month period. 

5. Eligibility 

Options may be granted under the Plan to any person who is a director, officer, employee 

or consultant of the Corporation or its subsidiaries, and employees of a person or company which 

provides management services to the Corporation or its subsidiaries (“Management Company 

Employees”), as the board of directors may from time to time designate as a Participant under the 

Plan. Subject to compliance with applicable requirements of the TSX Venture Exchange, a 

Participant may elect to hold options granted to them in an incorporated entity wholly owned by 

them and such entity shall be bound by the Plan in the same manner as if the options were held by 

the Participant. 

Subject to the terms of this Plan, the board of directors shall determine to whom options shall be 

granted, the terms and provisions of the respective option agreements, the time or times at which 

such options shall be granted and vested, and the number of common shares to be subject to each 

option. In the case of employees or consultants of the Corporation or Management Company 

Employees, the option agreements to which they are party must contain a representation of the 

Corporation that such employee, consultant or Management Company Employee, as the case may 

be, is a bona fide employee, consultant or Management Company Employee of the Corporation or 

its subsidiaries. 

A Participant who has been granted an option may, if such Participant is otherwise eligible, and if 

permitted under the policies of the TSX Venture Exchange, be granted an additional option or 

options if the board of directors shall so determine.

6. Terms and Conditions 

(a) 

Exercise Price 

The exercise price to each Participant for each Optioned Share shall be as determined by 

the board of directors, but shall in no event be less than the market price, less any allowable 

discount, of the common shares of the Corporation on the TSX Venture Exchange, or such other 

exchange on which the common shares are listed at the time of the grant of the option, or such 

other price as may be agreed to by the Corporation and approved by the TSX Venture Exchange 

or such other exchange on which the common shares are listed. 

(b) 

Option Agreement 

All options shall be granted under the Plan by means of an agreement between the 

Corporation and each Participant (the “Option Agreement”) in the form as may be approved by 

the board of directors, such approval to be conclusively evidenced by the execution of the Option 

Agreement by any one director or officer of the Corporation. 

(c) 

Length of Grant 

Each option granted under the Plan shall expire on the date set out in the option 

agreement, subject to earlier termination as provided in subsections 6(l), (m), (n) and (o) of this 

Plan. In no circumstances shall the duration of an option exceed the maximum term permitted by 

the TSX Venture Exchange. If the Corporation is classified as a “Tier 1 Issuer” by the TSX 

Venture Exchange the maximum term shall not exceed 10 years, and if the Corporation is 

classified as a “Tier 2 Issuer” by the TSX Venture Exchange the maximum term shall not exceed 

five years. 

(d) 

Non-Assignability of Options 

An option granted under the Plan shall not be transferable or assignable (whether 

absolutely or by way of mortgage, pledge or other charge) by a Participant, other than by will or 

other testamentary instrument or the laws of succession. 

(e) 

Right to Postpone Exercise 

Each Participant, upon becoming entitled to exercise the option in respect of any 

Optioned Shares in accordance with the Option Agreement, shall be entitled to exercise the 

option to purchase such Optioned Shares at any time prior to the expiration or other termination 

of the Option Agreement. 

(f) 

Hold Period 

Any options granted pursuant to the Plan or any Optioned Shares issued upon the 

exercise of such options shall be subject to any applicable statutory hold period or resale 

restriction as well as any hold period or resale restriction that may be imposed by the policies or 

regulations of the TSX Venture Exchange or the policies or regulations of any other stock 

exchange that the common shares may be listed on. Any hold period or resale restriction required 

by the TSX Venture Exchange shall be endorsed as a legend on the share certificate(s) 

representing the Optioned Shares.

(g) 

Change of Control 

In the event the Corporation undergoes a “change of control”, as that term is defined by 

TSX Venture Exchange policy, all granted and outstanding options shall be deemed to vest 

immediately upon the completion of the transaction causing the change of control. 

(h) 

Exercise and Payment 

Subject to the Participant meeting any vesting provisions contained in an Option 

Agreement, any option granted under the Plan may be exercised by a Participant or the legal 

representative of a Participant giving notice to the Corporation specifying the number of shares in 

respect of which such option is being exercised, accompanied by payment (by cash or certified 

cheque payable to the Corporation) of the entire exercise price (determined in accordance with 

the Option Agreement) for the number of shares specified in the notice. Upon any such exercise 

of an option by a Participant the Corporation shall cause the transfer agent and registrar of the 

common shares to promptly deliver to such Participant or the legal representative of such 

Participant, as the case may be, a share certificate in the name of such Participant or the legal 

representative of such Participant, as the case may be, representing the number of shares specified 

in the notice. 

(i) 

Rights of Participants 

A Participant shall have no rights as a shareholder in respect of any of the Optioned 

Shares (including, without limitation, any right to receive dividends or other distributions, voting 

rights, warrants or rights under any rights offering) other than Optioned Shares in respect of 

which a Participant has exercised their option to purchase and which have been issued by the 

Corporation. 

(j) 

Third Party Offer 

If, at any time when an option granted under the Plan remains unexercised with respect to 

any Optioned Shares, an Offer to purchase all of the common shares of the Corporation is made 

by a third party, the Corporation shall use its best efforts to bring such offer to the attention of 

Participants as soon as practicable. The Corporation may, at its option, require the acceleration of 

the time for the exercise of the option rights granted under the Plan and of the time for the 

fulfilment of any conditions or restrictions on such exercise. 

(k) 

Alterations in Shares 

In the event of a share dividend, share split, issuance of shares or instruments convertible 

into common shares (other than pursuant to the Plan) for less than market value, share 

consolidation, share reclassification, exchange of shares, recapitalization, EIW Acquisition, 

merger, consolidation, corporate arrangement, reorganization, liquidation or the like of or by the 

Corporation, the board of directors may make such adjustment, if any, of the number of Optioned 

Shares, or of the exercise price, or both, as it shall deem appropriate to give proper effect to such 

event, including to prevent, to the extent possible, substantial dilution or enlargement of rights 

granted to Participants under the Plan. In any such event, the maximum number of shares 

available under the Plan may be appropriately adjusted by the board of directors. If because of a 

proposed merger, EIW Acquisition or other corporate arrangement or reorganization, the 

exchange or replacement of shares in the Corporation of those in another company is imminent,

the board of directors may, in a fair and equitable manner, determine the manner in which all 

unexercised option rights granted under the Plan shall be treated including, for example, requiring 

the acceleration of the time for the exercise of such rights by the Participants and of the time for 

the fulfilment of any conditions or restrictions on such exercise. All determinations of the board 

of directors under this paragraph 6(k) shall be full and final. 

(l) 

Termination 

If a Participant is dismissed as an officer, employee or consultant by the Corporation, or 

by one of its subsidiaries, for cause, all unexercised option rights of that Participant under the 

Plan shall terminate immediately upon such dismissal, notwithstanding the original term of the 

option granted to such Participant under the Plan. 

(m) 

Disability or Retirement 

If a Participant ceases to be a director, officer, employee or consultant (or Management 

Company Employee) of the Corporation or of one of its subsidiaries as a result of: 

(i) 

(ii) 

(iii) 

(iv) 

disability or illness preventing the Participant from performing the duties 

routinely performed by such Participant; 

retirement at the normal retirement age prescribed by the Corporation pension 

plan; 

resignation; or 

such other circumstances as may be approved by the board of directors, 

Such Participant shall have the right, for a period not exceeding 90 days from the date of ceasing 

to be a director, officer, employee or consultant (or, if earlier, until the expiry date of the option 

rights of the Participant pursuant to the terms of the Option Agreement) to exercise the option 

under the Plan with respect to all Optioned Shares of such Participant to the extent they had 

vested and were exercisable on the date of ceasing to be a director, officer, employee or 

consultant. Upon the expiration of such 90 days period (or such earlier expiry date as provided 

for in the Option Agreement) all unexercised option rights of that Participant shall immediately 

terminate notwithstanding the original term of the option granted to such Participant under the 

Plan. 

(n) 

Investor Relations Participant 

If a Participant providing investor relations services to the Corporation ceases to be 

employed to provide such services as a result of: 

(i) 

(ii) 

(iii) 

disability or illness preventing the Participant from performing investor relations 

services; 

retirement at the normal retirement age prescribed by the Corporation pension 

plan; 

resignation; or

(iv) 

such other circumstances as may be approved by the board of directors, 

such Participant shall have the right, for a period not exceeding 30 days from the date of ceasing 

to be employed to provide investor relations services (or, if earlier, until the expiry date of the 

option rights of the Participant pursuant to the terms of the Option Agreement) to exercise the 

option under the Plan with respect to all Optioned Shares of such Participant to the extent they 

had vested and were exercisable on the date of ceasing to be an investor relations employee. 

Upon the expiration of such 30 days period (or such earlier expiry date as provided for in the 

Option Agreement) all unexercised option rights of that Participant shall immediately terminate 

notwithstanding the original term of the option granted to such Participant under the Plan. 

(o) 

Deceased Participant 

In the event of the death of a Participant, the legal representatives of the deceased 

Participant shall have the right for a period not exceeding one year from the date of death of the 

deceased Participant (or such shorter period being, until the expiry date of the option rights of the 

Participant pursuant to the terms of the Option Agreement) to exercise the deceased Participant’s 

option with respect to all of the Optioned Shares of the deceased Participant to the extent they 

were vested and exercisable on the date of death. Upon the expiration of such period all 

unexercised option rights of the deceased Participant shall immediately terminate, 

notwithstanding the original term of the option granted to the deceased Participant under the Plan. 

7. Amendments and Discontinuance of Plan 

The board of directors may from time to time amend or revise the terms of the Plan or 

may discontinue the Plan at any time, provided that no such action may in any manner adversely 

affect the rights under any options earlier granted to a Participant under the Plan without the 

consent of that Participant. Any amendment to the Plan, which would materially modify the 

eligibility requirements for participation in the Plan, shall be effective only upon the approval of 

the Corporation’s shareholders. Furthermore, TSX Venture Exchange policy requires the 

Corporation to obtain disinterested shareholder approval should the Plan or any option grant 

result in: 

(a) 

(b) 

(c) 

(d) 

the number of common shares reserved for issuance under stock options granted 

to insiders of the Corporation exceeding 10% of the issued and outstanding 

common shares; 

the issuance to insiders of the Corporation, within a one year period, of a number 

of common shares exceeding 10% of the issued and outstanding common shares; 

the issuance to any one insider of the Corporation and such insider’s associates, 

within a one year period, of a number of shares exceeding 5% of the issued and 

outstanding common shares; or 

the decrease of the exercise price of stock options previously granted to insiders 

of the Corporation.

8. No Further Rights 

Nothing contained in the Plan nor in any option granted under this Plan shall give any 

participant or any other person, any interest or title in or to any common shares of the Corporation 

or any rights as a shareholder of the Corporation or any other legal or equitable right against the 

Corporation other than as set out in the Plan and pursuant to the exercise of any option, nor shall 

it confer upon the Participants any right to continue as an employee, officer, consultant or director 

of the Corporation or of its subsidiaries. 

9. Compliance with Laws 

The obligations of the Corporation to sell common shares and deliver share certificates 

under the Plan are subject to such compliance by the Corporation and the Participants as the 

Corporation deems necessary or advisable with all applicable corporate and securities laws, rules 

and regulations. 

10. Gender 

The use of the masculine gender in this Plan shall be deemed to include or be replaced by 

the feminine gender where appropriate to the particular Participant.

REVIEW ENGAGEMENT REPORT 

To the Directors, 

Ryjencap Inc.: 

We have reviewed the balance sheet of RYJENCAP INC. as at February 28, 2006 and the statements of retained 

earnings, income and cash flows for the three and six month periods then ended. Our review was made in 

accordance with Canadian generally accepted standards for review engagements and accordingly consisted primarily 

of enquiry, analytical procedures and discussions related to information supplied to us by the Company. 

A review does not constitute an audit and consequently we do not express an audit opinion on these financial 

statements. 

Based on our review, nothing has come to our attention that causes us to believe that these financial statements are 

not, in all material respects, in accordance with Canadian generally accepted accounting principles. 

The comparative figures presented on the balance sheet as at August 31, 2005 were audited, as described in Note 6 to 

these financial statements. 

April 17, 2006 

Chartered Accountants

Ryjencap Inc. Notice of Annual and Special ... - Empire Industries

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