EXHIBIT 3.3
ARTICLES
OF
DAUGHERTY RESOURCES, INC.
(Under the British Columbia Business Corporations Act)
Daugherty Resources, Inc. (the "Company") was incorporated in British
Columbia under the name Alaska Apollo Resources, Inc. on February 9, 1979 and
subsequently changed its name to Daugherty Resources, Inc. In May 2004, the
Company filed a transition application with the Registrar of Companies (the
"Registrar") in compliance with section 437(2) of the British Columbia Business
Corporations Act (the "BCCA") containing the Company's notice of articles (the
"NOA") in the form prescribed by the BCCA. By special resolution of the
Company's shareholders approved in June 2004, the Company amended and restated
its articles as hereinafter set forth (the "Articles") in accordance with the
BCCA.
ARTICLE 1 - CAPITAL STOCK
1.1 Authorized Capital Stock. In accordance with the NOA, the total
number of shares of capital stock that the Company shall have authority to issue
is 105,000,000, consisting of 100,000,000 shares of common stock, no par value
(the "Common Stock"), and 5,000,000 shares of preferred stock, no par value (the
"Preferred Stock"). The powers, designations, preferences, rights and
qualifications, limitations or restrictions of the Common Stock and the
Preferred Stock are set forth or provided in this Article 1.
1.2 Issuance of Shares. Subject to the applicable provisions of the
BCCA, the Company may issue shares of its Common Stock and Preferred Stock from
time to time, for such consideration as may be fixed by the board of directors
of the Company (the "Board"), which is expressly authorized to fix the same in
its sole and absolute discretion. Shares so issued, for which the consideration
has been paid or delivered to the Company, shall be deemed fully paid stock and
shall not be subject to any future call or assessment thereon, and the holders
thereof shall not be liable for any further payments in respect thereof.
1.3 Common Stock. The shares of authorized Common Stock shall be
identical in all respects and shall have equal rights and privileges as follows:
(a) After the requirements for preferential dividends on the
shares of any outstanding series of Preferred Stock shall have been met and the
Company shall have complied with all of the requirements, if any, for sinking
funds or redemption or purchase accounts and satisfied any other conditions that
may be fixed in accordance with these Articles or the provisions of any
resolutions adopted by the Board pursuant to Article 1.4, then the holders of
Common Stock shall be entitled to receive any dividends declared from time to
time by the Board on the Common Stock, which dividends shall be paid out of
assets legally available for the payment of dividends and shall be distributed
to the holders of Common Stock pro rata in accordance with the number of shares
of Common Stock held by each of them.
(b) After distribution in full of the preferential amounts, if
any, to be distributed to the holders of the shares of any outstanding series of
Preferred Stock in the event of voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding up of the Company, the
holders of Common Stock shall be entitled to receive all the remaining assets of
the Company, tangible and intangible, of whatever kind, available for
distribution to shareholders, which assets shall be distributed to the holders
of Common Stock pro rata in accordance with the number of shares of Common Stock
held by each of them.
(c) Except as may otherwise be required by law, these Articles or
the provisions of any resolutions adopted by the Board pursuant to Article 1.4,
each holder of Common Stock shall have one vote per share of Common Stock on
each matter voted upon by the shareholders.
1.4 Preferred Stock. Authority is hereby granted to the Board, subject
to the provisions of this Article 1, to authorize the issue of one or more
series of Preferred Stock and to fix, by resolution providing for the issue of
each such series, the powers, designations, preferences and relative,
participating, optional or other special rights of the series, and the
qualifications, limitations or restrictions thereof, if any, including the
following:
(a) The number of shares comprising the series and the distinctive
designation thereof;
(b) The dividend rate or rates (which may be contingent upon the
happening of certain events), if any, on the shares of the series, the date or
dates from which dividends shall accrue, the dates on which dividends thereon,
if declared, shall be payable and a statement whether or not or in what
circumstances dividends may be cumulative;
(c) Whether or not the shares of the series shall be redeemable
and, if so, the limitations and restrictions on redemption, the manner of
selecting shares of the series to be redeemed and the amount, if any, in
addition to any accrued and unpaid dividends thereon that the holders of shares
of the series shall be entitled to receive upon redemption thereof, which amount
may vary at different redemption dates and may be different for shares redeemed
through the operation of any purchase, retirement or sinking fund;
(d) The amount, if any, in addition to any accrued and unpaid
dividends thereon that the holders of shares of the series shall be entitled to
receive upon the voluntary or involuntary liquidation, dissolution or winding up
of the Company, which amount shall not be less than the par value but otherwise
may vary depending upon whether the liquidation, dissolution or winding up is
voluntary or involuntary and, if voluntary, may vary at different dates;
(e) Whether or not the shares of the series shall be subject to
the operation of a purchase, retirement or sinking fund and, if so, whether the
purchase, retirement or sinking fund shall be cumulative or noncumulative, the
extent to and the manner in which the fund shall be applied to the purchase or
redemption of shares of the series for retirement or for other corporate
purposes and the terms and provisions for the operation thereof;
(f) Whether or not the shares of the series shall be convertible
into or exchangeable for shares of capital stock of any other class or series or
for other securities or property of the Company and, if so convertible or
exchangeable, the terms and conditions of conversion or exchange and the method,
if any, of adjusting the same;
(g) The voting powers, if any, of shares of the series; and
(h) Any other powers, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof.
All shares of any one series of Preferred Stock shall be identical in all
respects, except that shares of any one series issued at different times may
have different dates from which dividends thereon shall accrue, and all series
shall rank equally and be identical in all respects, except as provided in
accordance with this Article 1. Shares of Preferred Stock that have been
redeemed, repurchased or retired through the operation of a purchase, retirement
or sinking fund or shares of Preferred Stock that have been converted into
shares of any other class of capital stock of the Company or exchanged for any
other securities of the Company, upon compliance with any applicable provisions
of the BCCA, shall have the status of authorized but unissued shares of
Preferred Stock and may be reissued (x) as part of the series in which they were
originally included (if the terms of that series do not prohibit the
reissuance), (y) as part of a new series of Preferred Stock to be created by
resolution of the Board or (z) as part of any other series of Preferred Stock
the terms of which do not prohibit the reissuance.
1.5 Denial of Preemptive Rights. No shareholder of the Company shall by
reason of his holding shares of any class have any preemptive or preferential
right to purchase or subscribe to any shares of any class of the Company now or
hereafter authorized or any notes, debentures, bonds or other securities
convertible into or carrying options or warrants to purchase shares of any class
now or hereafter authorized, whether or not the issuance of those shares, notes,
debentures, bonds or other securities would adversely affect dividend or voting
rights of such shareholder, other than such rights, if any, as the Board in its
discretion may fix; and the Board may provide for the issuance of shares of any
class of the Company, or any notes, debentures, bonds or other securities
convertible into
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or carrying options or warrants to purchase shares of any class, without
offering them either in whole or in part to the existing shareholders of any
class.
ARTICLE 2 - STOCK CERTIFICATES AND TRANSFERS
2.1 Stock Certificates. The interest of each shareholder of the Company
shall be evidenced by certificates for shares of stock in such form as the Board
may from time to time prescribe, consistent with Part 4 of the BCCA. The
certificates shall be signed, countersigned and registered in such manner as the
Board may by resolution prescribe, which resolution may permit all or any of the
signatures on the certificates to be in facsimile. In case any officer who has
signed or whose facsimile signature has been placed upon a certificate has
ceased to act in that capacity before the certificate is issued, it may be
issued by the Company or its transfer agent with the same effect as if he
continued in that capacity at the date of issuance.
2.2 Transfers. The central securities register of the Company shall be
maintained by its designated stock transfer agent and registrar appointed under
section 111 of the BCCA. In accordance therewith, shares of the capital stock of
the Company shall be transferred on the books of the Company by the holder
thereof in person or by such person's attorney, upon surrender for cancellation
of certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof of
the authenticity of the signature as the Company or its agents may reasonably
require.
ARTICLE 3 - MEETINGS OF SHAREHOLDERS
3.1 Annual General Meetings. Subject to the requirements of Part 5,
Division 6 of the BCCA, annual general meetings of shareholders of the Company
shall be held at such place, either within or without the Province of British
Columbia, and at such time and date as the Board, by resolution, shall determine
for the purpose of fixing the size of the board, electing directors and
transacting other business properly brought before the meeting. Unless an annual
general meeting is deferred or waived in accordance with section 182 of the
BCCA, annual general meetings shall be held at least once in each calendar years
and not more than 15 months after the last annual general meeting.
3.2 Special Meetings. Subject to the rights of the holders of any series
of Preferred Stock to elect additional directors under specific circumstances,
special meetings of the shareholders may be called by the Board or, subject to
the requirements for requisitions under section 167 of the BCCA, by one or more
shareholders holding at least 5% of the shares entitled to vote at any the
meeting.
3.3 Place of Meetings. The Board may designate the place of meeting for
any meeting of the shareholders. If no designation is made by the Board, the
place of meeting shall be the principal place of business of the Company.
3.4 Notice of Meetings. Written notice, stating the place, day and hour
of a general or special meeting of shareholders and the purpose or purposes for
which the meeting is called, shall be prepared and delivered by the Company, in
accordance with Part 5, Division 6 of the BCCA, not less than 20 days nor more
than two months days before the date of the meeting, either personally or by
mail, to each shareholder of record entitled to vote at the meeting. If mailed,
the notice shall be deemed to be delivered when deposited in the United States
mail with postage thereon prepaid, addressed to the shareholder at the
shareholder's address as it appears on the stock transfer books of the Company.
Any previously scheduled meeting of the shareholders may be postponed by
resolution of the Board upon public notice given prior to the time previously
scheduled for the meeting.
3.5 Quorum and Adjournment. In accordance with section 172(1)(a) of the
BCCA, the holders of at least one-third of the voting power of the outstanding
shares of capital stock of the Company entitled to vote generally in the
election of directors (the "Voting Stock"), represented in person or by proxy,
shall constitute a quorum for the transaction of business at a meeting of
shareholders, except when specified business is to be voted on by a class or
series of shares voting as a class, in which case the holders of one-third of
the voting power of the outstanding shares of that class or series shall
constitute a quorum for the transaction of specified business to be voted on by
that class. The chairman of the meeting or the holders of a majority of the
shares of Voting Stock so represented may adjourn the meeting from time to time,
whether or not there is a quorum (or, in the case of specified business to be
voted on by a class or series, the chairman or a majority of the shares of that
class or series so represented may adjourn the meeting with respect to that
business). No notice of the time and place of adjourned meetings need be
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given except as required by law. The shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
3.6 Proxies. Concurrent with sending notice of a meeting of
shareholders, the Company shall send to each shareholder entitled to vote at the
meeting a form of proxy that complies with applicable requirements under the
BCCA. At all meetings of shareholders, a shareholder may vote by proxy executed
in writing by the shareholder or as may be permitted by law, or by the
shareholder's duly authorized attorney-in-fact. Proxies must be filed with the
Secretary of the Company or its stock transfer agent or other designated agent
at least two business days before the meeting.
3.7 Shareholder Proposals.
(a) Annual General Meetings of Shareholders. A shareholder may
propose Board nominations or other business to be brought before an annual
general meeting of the Company's shareholders (a "Proposal") only if (i) the
shareholder meets the requirements for status as a qualified shareholder under
section 187 of the BCCA (a "Qualified Shareholder"), (ii) the Qualified
Shareholder complies with the notice procedures under section 188 of the BCCA
and (iii) the Proposal is a proper matter for shareholder action under Part 5,
Division 7 of the BCCA and is required to be included in the Company's proxy
statement for the meeting pursuant to Rule 14a-8 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and section 189 of the BCCA. If a
Proposal for an annual general meeting meets the requirements of this Article
3.7(a), the Company shall include in its proxy statement for the meeting all of
the information pertaining to the Proposal prescribed by Rule 14a-8 under the
Exchange Act and section 189 of the BCCA.
(b) Special Meetings of Shareholders. The only business to be
conducted at a special meeting of shareholders shall be the matters specified in
the Company's notice of meeting pursuant to Article 3.4. If that business
includes the election of directors, nominations of persons for election to the
Board may be made only (i) pursuant to the Company' notice of meeting or (ii) by
a Qualified Shareholder who has complied with the notice procedures under
section 188 of the BCCA.
(c) Notice to Submitters. If the Company does not intend to
process a Proposal under this Article 3.7, it will provide written notice to the
shareholder who submitted the Proposal in accordance with section 191 of the
BCCA the applicable requirements under the Exchange Act.
3.8 Voting Requirements.
(a) General Business. Each of the following matters submitted to
the shareholders at a general or special meeting shall be considered general
business and shall be decided by a majority of the votes cast on that matter:
(i) business relating to the conduct of the meeting;
(ii) business arising from any reports of directors or
auditors;
(iii) fixing or changing the number of directors constituting
the Board;
(iv) subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specific circumstances, the
election or appointment of directors;
(v) the appointment of auditors and approval of arrangements
for remuneration of auditors; and
(vi) any other business that does not require passing a
special resolution or an exceptional resolution under the BCCA or the BCCA
Regulations.
(b) Special Business. Any matter submitted to the shareholders at
a general or special meeting other than the matters listed in Article 3.8(a)
shall be considered special business and shall be decided by a two-thirds
majority of the votes cast on that matter.
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3.9 Inspectors of Elections. The Board shall appoint one or more
inspectors, who may include officers, employees, agents or other representatives
of the Company, to act at a meeting of shareholders and make a written report
thereof. One or more persons may be designated as alternate inspectors to
replace any inspector who fails to act. If no inspector or alternate has been
appointed to act, or if all inspectors or alternates who have been appointed are
unable to act at a meeting of shareholders, the chairman of the meeting shall
appoint one or more inspectors to act at the meeting. Each inspector, before
discharging his duties, shall take and sign an oath to faithfully execute the
duties of inspector with strict impartiality and according to the best of his
ability. The inspectors shall have the duties prescribed by the BCCA.
3.10 Polls and Procedures. The Board shall appoint chairman, who shall be
the chairman of the board or president of the Company, to preside at meetings of
shareholders, and a secretary, who may be an officer, employee, agent or other
representative of the Company, to announce at the meeting the date and time of
the opening and the closing of the polls for each matter upon which the
shareholders will vote at a meeting. Conduct of the meeting, polls for voting on
matters brought before the meeting and related procedures shall be conducted in
the manner determined by the Board, consistent with Part 5, Division 6 of the
BCCA.
ARTICLE 4 - BOARD OF DIRECTORS
4.1 General. The business and affairs of the Company shall be managed by
or under the direction of the Board. In addition to the powers and authorities
expressly conferred upon them by these Article, the Board may exercise all the
corporate powers and prerogatives that are not required by law or by these
Article to be exercised or by the shareholders.
4.2 Number, Tenure and Qualifications. Subject to the rights of the
holders of any series of Preferred Stock to elect directors under specific
circumstances, the number of directors shall be fixed from time to time by
resolution adopted by the Board or by ordinary resolution of the shareholders,
but shall consist of not less than three directors. Notwithstanding any
shareholder action fixing the size of the Board at an annual general meeting,
the Board may thereafter increase the size of the Board and appoint additional
directors to fill the resulting vacancy or vacancies in accordance with Article
4.7, provided that the number of additional directors may not exceed, at any
time prior to the next annual general meeting of shareholders, one-third the
number of directors elected at the preceding annual general meeting. Each
director shall hold office for a term expiring at the next annual general
meeting of shareholders or until his successor shall have been duly elected and
qualified. Qualification to serve as a director shall not be contingent upon
ownership of the Company's capital stock but shall be subject to the limitations
set forth in section 124 of the BCCA.
4.3 Regular Meetings. A regular meeting of the Board may be held without
notice immediately after, and at the same place as, each annual general meeting
of shareholders. The Board may, by resolution, provide the time and place for
the holding of additional regular meetings without notice other than the
resolution.
4.4 Special Meetings. Special meetings of the Board shall be called at
the request of the Chairman of the Board, the Chief Executive Officer or
directors constituting a majority of the Board. The person or persons authorized
to call special meetings of the Board may fix the place and time of the
meetings.
4.5 Notice. Notice of any special meeting of the Board shall be given to
each director at the director's business or residence in writing or by mail,
telephone, facsimile or electronic transmission. If mailed, the notice shall be
deemed adequately delivered when deposited in the United States mail so
addressed, with postage thereon prepaid, at least five days before the meeting.
If by facsimile or electronic transmission, the notice shall be transmitted at
least 24 hours before the meeting. If by telephone, the notice shall be given at
least 12 hours prior to the time set for the meeting. To be effective, the
notice need not state the business to be transacted at a regular or special
meeting of the Board or the purposes for calling the meeting. A meeting may be
held at any time without notice if all the directors are present or if those not
present waive notice of the meeting in writing, either before or after the
meeting.
4.6 Quorum. A majority of the members of the Board shall constitute a
quorum for the transaction of business at any meeting of the Board, but if less
than a quorum are present, a majority of the directors present may adjourn the
meeting from time to time without further notice. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board. The directors present at a duly organized
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meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough directors to leave less than a quorum.
4.7 Vacancies. Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specific circumstances, and
unless the Board otherwise determines, vacancies resulting from death,
resignation, retirement, disqualification, removal from office or other cause,
and newly created directorships resulting from any increase in the authorized
number of directors, shall be filled by the affirmative vote of a majority of
the remaining directors, though less than a quorum of the Board, and directors
so chosen shall hold office for a term expiring at the next annual general
meeting of shareholders and until such director's successor shall have been duly
elected and qualified. No decrease in the number of authorized directors shall
shorten the term of any incumbent director.
4.8 Executive and Other Committees.
(a) Powers of Committees. The Board may, by resolution adopted by
a majority of the whole Board, designate an executive committee and one or more
additional committees to exercise, subject to applicable provisions of law, any
powers of the Board in the management of the business and affairs of the Company
set forth in the designating resolution. The Executive Committee and each such
other committee shall consist of two or more directors of the Company. The Board
may designate one or more directors as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of the committee.
In the absence or disqualification of any member of a committee, the other
member or members thereof present at any meeting and not disqualified from
voting, whether or not constituting a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of the absent or
disqualified member. Each committee shall keep written minutes of its
proceedings and shall report its proceedings to the Board.
(b) Procedures of Committees. A majority of any committee may
determine its action and fix the time and place of its meetings, unless the
Board shall otherwise provide. Notice of committee meetings shall be given to
each member of the committee in the same manner provided for in Article 4.5. The
Board shall have power at any time to fill vacancies in, to change the
membership of, or to dissolve any committee.
(c) Advisory Committees. The Board may appoint one or more
advisory committees consisting in whole or in part of persons who are not
directors of the Company; provided that no advisory committee shall have or
exercise any authority of the Board.
4.9 Removal. Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specific circumstances, any
director or the entire Board may be removed from office at any time, with or
without cause, by the holders of a majority of the shares then entitled to vote
at an election of directors.
4.10 Exculpation of Directors. A director of the Company shall not be
personally liable to the Company or its shareholders for monetary damages for
breach of fiduciary duty as a director, provided that this Article 4.10 shall
not eliminate or limit the liability of a director (a) for any breach of the
director's duty of loyalty to the Company or shareholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under section 154 of the BCCA or (d) for any transaction
from which the director derived an improper personal benefit. If the BCCA is
amended after the date of filing of adoption of these Articles to authorize
corporate action further limiting or eliminating the personal liability of a
director, then the liability of the directors of the Company shall be limited or
eliminated to the fullest extent permitted by the BCCA as so amended. Any repeal
or modification of this Article by the shareholders of the Company or otherwise
shall not adversely affect any right or protection of a director of the Company
existing at the time of the repeal or modification.
4.11 Related Party Transactions. Interested directors may be counted in
determining the presence of a quorum at a meeting of the Board or of a committee
thereof. No contract or transaction between the Company and one or more of its
directors or officers, or between the Company and any other corporation,
partnership or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the Board or committee which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose, if (a) the material facts as to his relationship or
interest and as to the contract or
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transaction are disclosed or are known to the Board or the committee, and the
Board or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum, (b) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by a vote of the shareholders
or (c) the contract or transaction is fair as to the Company as of the time it
is authorized, approved or ratified by the Board, an authorized committee of the
Board or the shareholders.
ARTICLE 5 - OFFICERS
5.1 Elected Officers. The elected officers of the Company shall be a
Chief Executive Officer, a President, one or more Vice Presidents, a Secretary
and any other officers as the Board from time to time may deem proper. The Chief
Executive Officer may also serve as the Chairman of the Board and as the
President. The Chairman of the Board, if appointed, shall be chosen from the
directors. All officers shall each have the powers and duties generally
pertaining to their respective offices.
5.2 Election and Term of Office. The elected officers of the Company
shall be elected annually by the Board at the regular meeting of the Board held
at the time of each annual general meeting of the shareholders. If the election
of officers is not held at that meeting, the election shall be held as soon
thereafter as convenient. Subject to Article 5.8, each officer shall hold office
until such officer's successor shall have been duly elected and shall have
qualified or until the officer's death, resignation or removal by the Board.
5.3 Chairman of the Board. The Chairman of the Board, if appointed,
shall preside at all meetings of the shareholders and of the Board. The Chairman
shall make reports to the Board and the shareholders and shall perform any other
duties properly delegated to him by the Board.
5.4 Chief Executive Officer. The Chief Executive Officer shall be
responsible for the general management of the affairs of the Company and shall
perform all duties incidental to that office as required by law and assigned by
the Board. The Chief Executive Officer shall see that all orders and resolutions
of the Board and each committee thereof are carried into effect. The Chief
Executive Officer may sign, alone or with the Secretary, or an Assistant
Secretary, or any other proper officer of the Company authorized by the Board,
all certificates, contracts and other instruments of the Company as authorized
by the Board.
5.5 President. The President shall act in a general executive capacity
in the management of the affairs of the Company and shall perform all duties
incidental to that office as required by law and assigned by the Board. If the
Company has a Chairman of the Board or Chief Executive Officer other than the
President, then the President shall assist them in the administration and
operation of the Company' business and general supervision of its policies and
affairs. The President may sign, alone or with the Secretary, or an Assistant
Secretary, or any other proper officer of the Company authorized by the Board,
all certificates, contracts and other instruments of the Company as authorized
by the Board.
5.6 Vice Presidents. Each Vice President shall have the powers and
perform the duties assigned to him from time to time by the Board or delegated
to him by the Chief Executive Officer or the President. The Board may assign to
any Vice President general supervision and charge over any functional division
of the business and affairs of the Company specified by the Board.
5.7 Secretary. The Secretary shall give notice of all meetings of
shareholders and directors and all other notices required by law or by these
Article, shall record all the proceedings of the meetings of the Board, any
committees thereof and the shareholders of the Company in minute books to be
kept for that purpose, and shall perform such other duties as may be assigned to
him by the Board, the Chairman of the Board or the Chief Executive Officer. The
Secretary shall have the custody of the seal of the Company and shall affix the
same to all instruments requiring it, when authorized by the Board, the Chairman
of the Board or the Chief Executive Officer, and attest to the same.
5.8 Removal. Any officer elected by the Board may be removed by a
majority of the members of the whole Board whenever, in their judgment, the best
interests of the Company would be served thereby. No elected
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officer shall have any contractual rights against the Company for compensation
by virtue of his election after his removal , except as otherwise provided in an
employment contract.
5.9 Vacancies. A newly created office and a vacancy in any office
because of death, resignation or removal may be filled by the Board for the
unexpired portion of the term at any meeting of the Board.
ARTICLE 6 - INDEMNIFICATION
6.1 Mandatory Indemnification. Subject to the requirements and
restrictions of Part 5, Division 5 of the BCCA, the Company shall indemnify and
hold harmless each person (each, an "Eligible Party") who was or is made a party
or is threatened to be made a party, or who was or is a witness without being
named a party, to any threatened, pending or completed action, claim, suit or
proceeding, whether civil, criminal, administrative or investigative, any appeal
in such an action, suit or proceeding, and any inquiry or investigation that
could lead to such an action, suit or proceeding (a "Proceeding"), by reason of
the fact that the Eligible Party is or was a director or officer of the Company,
or while a director or officer of the Company is or was serving at the request
of the Company as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another corporation, partnership,
trust, employee benefit plan or other enterprise (an "Associated Company"), from
and against any judgments, penalties (including excise taxes), fines, amounts
paid in settlement and reasonable expenses (including court costs and attorneys'
fees) actually incurred by the Eligible Party in connection with the Proceeding
if it is determined that he acted in good faith and reasonably believed (a) in
the case of conduct in his official capacity on behalf of the Company or
Associated Company that his conduct was in the Company's best interests, (b) in
all other cases, that his conduct was not opposed to the best interests of the
Company, and (c) with respect to any Proceeding that is a criminal action, that
he had no reasonable cause to believe his conduct was unlawful, provided that in
the event a determination is made that the Eligible Party is liable to the
Company or is found liable on the basis that personal benefit was improperly
received by the Eligible Party, the indemnification is limited to reasonable
expenses actually incurred by the Eligible Party in connection with the
Proceeding and shall not be made in respect of any Proceeding in which the
Eligible Party shall have been found liable for willful or intentional
misconduct in the performance of his duty to the Company. The termination of any
Proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent shall not of itself be determinative of whether the
person did not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any Proceeding that is a criminal action, had no reasonable cause to believe
that his conduct was unlawful. An Eligible Party shall be deemed to have been
found liable in respect of any claim, issue or matter only after he shall have
been so adjudged by a court of competent jurisdiction after exhaustion of all
available appeals.
6.2 Determination of Indemnification. Any indemnification under the
Article 6.1 (unless ordered by a court of competent jurisdiction) shall be made
by the Company only upon a determination that an Eligible Party has met the
applicable standard of conduct. That determination shall be made (a) by a
majority vote of a quorum consisting of directors who at the time of the vote
are not named defendants or respondents in the Proceeding; (b) if such quorum
cannot be obtained, by a majority vote of a committee of the Board, designated
to act in the matter by a majority of all directors, consisting solely of two or
more directors who at the time of the vote are not named defendants or
respondents in the Proceeding; (c) by special legal counsel (in a written
opinion) selected by the Board or a committee of the Board by a vote as set
forth in clause (a) or (b) of this Article 6.2, or, if such quorum cannot be
obtained and such committee cannot be established, by a majority vote of all
directors (in which directors who are named defendants or respondents in the
Proceeding may participate); or (d) by the shareholders of the Company in a vote
that excludes the shares held by directors who are named defendants or
respondents in the Proceeding.
6.3 Advance of Expenses. Reasonable expenses, including court costs and
attorneys' fees, incurred by an Eligible Party in a Proceeding shall be paid by
the Company at reasonable intervals in advance of the final disposition of the
Proceeding, and without the determination specified in the Article 6.2, upon
receipt by the Company of a written affirmation by the Eligible Party of his
good faith belief that he has met the standard of conduct necessary for
indemnification under this Article 6 and a written undertaking by the Eligible
Party to repay the amounts paid or reimbursed by the Company if it is ultimately
determined that the payment of expenses is prohibited under section 163 of the
BCCA. The written undertaking shall be an unlimited obligation of the Eligible
Party and may be accepted without reference to financial ability to make
repayment.
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6.4 Permissive Indemnification. The Board may authorize the Company to
indemnify employees or agents of the Company, and to advance their reasonable
expenses, to the same extent, following the same determinations and upon the
same conditions for mandatory indemnification of directors and officers under
this Article 6 if the indemnification is not prohibited under section 163 of the
BCCA.
6.5 Nature of Indemnification. The indemnification and advancement of
expenses provided under this Article 6 shall not be deemed exclusive of any
other rights to which those seeking indemnification may be entitled under the
BCCA, any agreement, vote of shareholders or disinterested directors or
otherwise.
6.6 Insurance. The Company shall have the power and authority to
purchase and maintain insurance or another arrangement on behalf of any person
who is or was a director, officer, employee or agent of the Company, or who is
or was serving at the request of the Company as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise against any
liability, claim, damage, loss or risk asserted against such person and incurred
by such person in any such capacity or arising out of the status of such person
as such, irrespective of whether the Company would have the power to indemnify
and hold such person harmless against such liability under the provisions
hereof. If the insurance or other arrangement is with a person or entity that is
not regularly engaged in the business of providing insurance coverage, the
insurance or arrangement may provide for payment of a liability with respect to
which the Company would not have the power to indemnify the person only if
including coverage for the additional liability has been approved by the
shareholders of the Company. Without limiting the power of the Company to
procure or maintain any kind of insurance or other arrangement, the Company may,
for the benefit of persons indemnified by the Company, (a) create a trust fund;
(b) establish any form of self-insurance; (c) secure its indemnity obligation by
grant of a security interest or other lien on the assets of the Company; or (d)
establish a letter of credit, guaranty, or surety arrangement. The insurance or
other arrangement may be procured, maintained, or established within the Company
or with any insurer or other person deemed appropriate by the Board regardless
of whether all or part of the stock or other securities of the insurer or other
person are owned in whole or part by the Company. In the absence of fraud, the
judgment of the Board as to the terms and conditions of the insurance or other
arrangement and the identity of the insurer or other person participating in the
arrangement shall be conclusive and the insurance or arrangement shall not be
voidable and shall not subject the directors approving the insurance or
arrangement to liability, on any ground, regardless of whether directors
participating in the approval are beneficiaries of the insurance or arrangement.
6.7 Notice. Any indemnification or advance of expenses to a present or
former director of the Company in accordance with this Article 6 shall be
reported in writing to the shareholders of the Company with or before the notice
or waiver of notice of the next shareholders' meeting or with or before the next
submission of a consent to action without a meeting and, in any case, within the
next twelve month period immediately following the indemnification or advance.
6.8 Change of Control. Following any "change of control" of the Company
of the type required to be reported under Item 1 of Form 8-K promulgated under
the Exchange Act, any determination concerning an Eligible Party's entitlement
to indemnification shall be made by independent legal counsel selected by the
Eligible Party and retained for that purpose by the Board on behalf of the
Company.
6.9 Amendment. Any amendment or repeal of this Article 6 shall not
adversely affect any right or protection existing hereunder in respect of any
act or omission occurring prior to the amendment or repeal.
ARTICLE 7 - MISCELLANEOUS PROVISIONS
7.1 Fiscal Year. The fiscal year of the Company shall be determined by
resolution of the Board.
7.2 Audits. The accounts, books and records of the Company shall be
audited upon the conclusion of each fiscal year by an independent certified
public accountant selected by the Board, and it shall be the duty of the Board
to cause the audit to be made annually in accordance with the requirements of
the Exchange Act and the BCCA.
7.3 Waiver of Notice. Whenever any notice is required to be given to any
shareholder or director of the Company under the provisions of the BCCA, a
waiver thereof in writing, signed by the person or persons entitled to the
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of notice.
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Neither the business to be transacted at, nor the purpose of, any annual general
or special meeting of the shareholders or of the Board need be specified in any
waiver of notice of the meeting.
7.4 Resignations. Any director or any officer, whether elected or
appointed, may resign at any time by serving written notice of resignation on
the Chairman of the Board, the Chief Executive Officer, the President, if any,
or the Secretary, and the resignation shall be deemed to be effective as of the
close of business on the date the notice is so delivered or any later date
specified therein.
ARTICLE 8 - AMENDMENTS
These Article may be amended, supplemented, rescinded or repealed by the
type of resolution specified in the BCCA for the subject matter of the amendment
or, if not so specified in the BCCA, by a two-thirds majority of the votes cast
on the matter at a general or special meeting of the shareholders.
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