Exhibit 3.1
BY-LAWS OF
DECTRON INTERNATIONALE INC.
(Corporation incorporated under the Canada Business Corporations Act)
BY-LAW NUMBER 1: GENERAL BY-LAWS
PART I COMMON RULES "Register"
"registration procedure"
Section 1. GENERAL PROVISIONS "Regulations"
"representative"
1. Contractual nature "reserved powers"
"special meeting"
A. SCOPE OF APPLICATION "unanimous shareholder agreement"
6. Definitions in the Act or in the
2. Part I Regulations
3. Part II
4. Part III C. INTERPRETATION
B. DEFINITIONS 7. Rules of interpretation
8. Discretion
5. Definitions in the by-laws 9. Precedence
"Act" 10. Headings
"An Act respecting the legal 11. Time limits
publicity of sole
proprietorships" Section 2. CORPORATION
"articles"
"auditor" A. REGISTERED OFFICE AND
"body corporate" ESTABLISHMENT
"by-laws"
"contracts, documents or 12. Place and address of registered
instruments in writing" office
"declaration deposited in the 13. Change of address and of place
Register" 14. Establishment
"Director" 15. Applicable legislation
"director" 16. Notices to the Corporation
"Inspector General"
"juridical or business day" B. SEAL AND OTHER MEANS OF
"meeting of the IDENTIFICATION OF THE
shareholders" CORPORATION
"non-juridical day or
holiday" 17. Form and contents of seal
"officer" 18. Logo
"person" 19. Facsimile of the seal
"record date" 20. Safekeeping of the seal
21. Safekeeping of the facsimile
22. Use of the seal 50. Gifts infer nyos
23. Use of the facsimile 51. By-laws
24. Validity 52. Banking or finance
25. Name 53. Financial year
54. Approval by shareholders
C. BOOKS AND REGISTERS
C. MEETINGS OF THE BOARD OF
26. Corporate Records Book DIRECTORS
27. Minutes and resolutions
28. Safekeeping 55. Calling of meetings
29. Accounting records 56. First directors' resolutions
30. Examination of books, 57. Regular meetings
registers and documents 58. Annual meeting
31. Non-certified copies of 59. Emergency meeting
documents 60. Waiver of notice
32. Disclosure of information to 61. Place of meetings
shareholders 62. Quorum
63. Canadian majority
PART II CORPORATION WITH 64. President and Secretary
MORE THAN ONE 65. Procedure
DIRECTOR AND/OR 67. Dissent
SHAREHOLDER 68. Meeting by way of technical means
69. Resolutions in lieu of meetings
Section 1. REPRESENTATION OF THE 70. Adjournment
CORPORATION 71. Validity
33. Representative bodies D. OFFICERS AND REPRESENTATIVES
A. DIRECTORS 72. Mandataries or agents
73. Appointment
34. Mandatary or agent 74. Cumulative duties
35. Number 75. Term of office
36. Qualifications 76. Remuneration
37. Election 77. Powers
38. Acceptance of office 78. Duties
39. Term of office 79. Chairman of the Board of
40. De facto directors Directors
41. Notices to directors 80. President of the Corporation
42. Remuneration and expenses 81. Vice-President
43. Conflict of interest 82. Treasurer
44. Resignation 83. Secretary
45. Removal from office 84. General Manager
46. End of term of office 85. Posting of security bond
47. Vacancies 86. Conflict of interest
87. Signing of documents
B. POWERS OF THE DIRECTORS 88. Signing of declarations to be
deposited in the Register
48. General rule 89. Mechanically-reproduced signature
49. Duties 90. Proxy holder of the Corporation
91. Legal or other proceedings Section 2. SHAREHOLDERS
92. Prima facie evidence of by
law A. SECURITIES
93. De facto of ricers or
representatives 117. Allotment and issue of securities
94. Resignation 118. Commission
95. Removal from office 119. Joint shareholders
96. End of term of office 120. New shareholder
E. EXECUTIVE COMMITTEE B. SECURITY CERTIFICATES
AND OTHER COMMITTEES
121. Right to a certificate
97. Appointment 122. Signing of certificates
98. Qualifications 123. Additional signatures
99. Powers 124. Joint holders
100. Meetings 125. Full copy of text
101. Remuneration 126. Fractional securities
102. Compensation 127. Evidence
103. Other committees 128. Replacement of certificates
104. Dissent
105. Removal from office and C. TRANSFER OF SECURITIES
replacement
106. End of term of office 129. Securities' and transfer
registers
130. Transfer agents
F. DIVISIONS 131. Transfers of securities
132. Lien on a security
107. Creation 133. Enforcement of a lien
108. Management 134. Registration of transfers
135. Deceased shareholder
G. PROTECTION OF THE 136. Effect of registration
DIRECTORS, OF THE
OFFICERS AND OF THE D. DIVIDENDS
REPRESENTATIVES
137. Declaration and payment
109. Exclusion of liability 138. Payment
vis-a-vis the Corporation 139. Unclaimed dividend
and third parties 140. Joint shareholders
110. Right to compensation 141. Set-off
111. Legal action by third party
112. Legal action by the E. NOTICES AND INFORMATION TO
Corporation SHAREHOLDERS
113. Liability insurance
114. Compensation after end of 142. Notices to shareholders
term of office 143. Addresses of shareholders
115. Determination of conditions 144. Untraceable shareholder
precedent to compensation 145. Notice of record date
116. Place of action
F. MEETINGS OF THE 1. AUDITOR OR ACCOUNTANT
SHAREHOLDERS
175. Appointment of auditor
146. Annual meetings 176. Remuneration of auditor
147. Special meetings 177. Independence of auditor
148. Calling by shareholders 178. Removal of auditor
149. Meetings in the Province of 179. Opposition by auditor
Quebec 180. End of term of auditor
150. Meetings outside the 181. Accountant
Province of Quebec 182. End of term of accountant
151. Notice of meeting 183. Audit Committee
152. Notice to the auditor 184. Duty of Audit Committee
153. Contents of notice 185. Meetings of Audit Committee
154. Waiver of notice
155. Irregularities PART III CORPORATION WITH SOLE
156. Persons entitled to attend a DIRECTOR OR SOLE SHARE
meeting HOLDER
157. Quorum
158. Adjournment Section 1. REPRESENTATION OF THE
159. Chairman and secretary CORPORATION
160. Procedure
161. Resolutions in lieu of
meetings 186. Representative bodies
G. RIGHT OF SHAREHOLDERS Section 2. SOLE DIRECTOR AND OFFICERS
TO VOTE
A. SOLE DIRECTOR
162. General rule
163. Joint shareholders 187. Composition of the Board of
164 Securities held by an Directors
administrator of the 188. Mandatary or agent
property of another or by a 189. Qualifications
trustee 190. Acceptance of office
165. Voting by a show of hands 191. Term of office
and casting vote 192. Powers
166. Voting on behalf of a body 193. Duties
corporate 194. Gifts inter biros
167. Ballot 195. Remuneration and expenses
168. Scrutineer 196. Conflict of interest
197. By-laws
198. End of term of office
H. PROXIES B. OFFICERS AND REPRESENTATIVES
169. Proxies 199 Mandataries or agents
170. Form of proxy 200. Appointment & cumulative duties
171. Revocation 201. Term of office
172. Filing of proxies 202. Remuneration
173. Deadline for filing 203. Powers
174. Soliciting proxies 204. Duties
205. Posting of security bond
206. Conflict of interest 221. Place of action
207. Signing of documents
208. Signing of declarations D. BANKING OR FINANCE deposited
to be in the Register
209. Legal or other proceedings 222. Banking or finance
210. Prima facie evidence of 223. Financial year
by-law 224. Auditor
211. Resignation 225. Removal of auditor
212. Removal from office 226. Opposition by auditor
213. End of term of office 227. End of term of auditor
228. Accountant
C. PROTECTION OF THE SOLE 229. End of term of accountant
DIRECTOR, OF THE
OFFICERS AND OF THE Section 3. SOLE SHAREHOLDER
REPRESENTATIVES
A. SECURITIES AND DIVIDENDS
214. Exclusion of liability
vis-a-vis the Corporation 230. Allotment and issue of securities
and third parties 231. Security certificates
215. Right to compensation 232. Dividends
216. Legal action by third party
217. Legal action by the B. RESOLUTIONS OF THE SOLE
Corporation SHAREHOLDER
218. Liability insurance
219. Compensation after end of 233. Powers
term of office 234. Annual and other resolutions
220. Determination of conditions
precedent to compensation
BY-LAW NUMBER 2: GENERAL BORROWING BY-LAW
BY-LAW NUMBER 3: BANKING BY-LAW
BY-LAW NUMBER 1
being the
GENERAL BY-LAWS OF
DECTRON INTERNATIONALE INC.
These general by-laws of the Corporation, also referred to as By-law Number 1,
have been passed by a resolution of the sole director or of the directors and
confirmed by a resolution of the sole shareholder or of the shareholders, in
accordance with the Act.
PART I COMMON RULES
Section 1. GENERAL PROVISIONS
1. Contractual nature. These general by-laws create relations of a
contractual nature between the Corporation and its sole shareholder or
its shareholders.
A. SCOPE OF APPLICATION
2. Part I. The common rules contained in this Part of the by-laws shall
apply at all times to Parts II and III hereof.
3. Part II. Part II of the by-laws shall apply from the moment when the
Corporation shall be made up either of more than one director or of
more than one shareholder or of more than one director and of more than
one shareholder.
4. Part III. Part III of the by-laws shall apply whenever the Corporation
shall be made up of one (1) sole director or of one (1) sole
shareholder or of one (1) sole director and of one (1) sole
shareholder, who do not necessarily have to be the same person. If the
Corporation is made up of one (l) sole director but of more than one
shareholder, Part II shall apply to the shareholders. Conversely, if
the Corporation is made up of one (1) sole shareholder but of more than
one director, Part II shall apply to the directors.
B. DEFINITIONS
5. Definitions in the by-laws. Unless there exists an express contrary
provision or unless the context clearly indicates otherwise, in the
by-laws of the Corporation, in the minutes of the proceedings of the
Board of Directors, of the Executive Committee and of the other
committees of the Board of Directors and in the resolutions of the sole
director or of the directors, of the Executive Committee and of the
other committees of the Board of Directors as well as in the minutes of
the meetings of the shareholders and in the resolutions of the sole
shareholder or of the shareholders the term or the expression:
"Act" or "Canada Business Corporations Act" shall mean the An Act
respecting Canadian business corporations, R.S.C. 1985, c. C-44, as
amended, and any amendment thereto, either past or future, and shall
include, in particular, any act or statute which may replace it, in
whole or in part. In the event of such replacement, any reference to a
provision of the Act shall be interpreted as being a reference to the
provision which replaced it;
"An Act respecting the legal publicity of sole proprietorships"
shall mean An Act respecting the legal publicity of sole
proprietorships, partnerships and legal persons, S.Q. 1993, c. 48,
and any future amendment thereto and shall include, in particular,
any act or statute which may replace it, in whole or in part. In
the event of such replacement, any reference to a provision of An
Act respecting the legal publicity of sole proprietorships shall be
interpreted as being a reference to the provision which replaced it;
"articles" shall mean the original or restated articles of
incorporation, articles of amendment, articles of amalgamation,
articles of continuance, articles of reorganization, articles of
dissolution, articles of revival or articles of arrangement of the
Corporation as well as any amendment which may be made thereto;
"auditor" shall mean the auditor of the Corporation and shall
include, in particular, a partnership which is made up of auditors;
"body corporate" shall include, in particular, a legal person within
the meaning of the Civil Code of Quebec, a company, a non-profit
corporation, a corporation or an association having a juridical or
legal personality separate and distinct from its members, wherever
or however incorporated;
"by-laws" shall mean the present by-laws, any other by-laws of the
Corporation which are in force at the time as well as any amendments
thereto;
"contracts, documents or instruments in writing" shall include,
among other things, deeds, hypothecs or mortgages, liens,
encumbrances, transfers and assignments of property of any kind,
conveyances, titles to property, agreements, contracts, receipts and
discharges, obligations, debentures and other securities, cheques or
other bills of exchange of the Corporation;
"declaration deposited in the Register" shall mean, as the case may
be, the initial declaration, the declaration of registration, the
amending declaration, the annual declaration or any other
declaration which has been filed or which may, in the future, be
required to be filed pursuant to An Act respecting the legal
publicity of sole proprietorships and which has been entered on the
Register;
"Director" shall mean the Director appointed pursuant to section 260
of the Act and who is charged with the administration thereof;
"director" shall mean the person whose name appears at the relevant
time in the declaration deposited in the Register and in the Notice
of Directors or in the Notice of Change of Directors filed with the
Director pursuant to sections 106 or 113 of the Act as well as any
other person holding the office of director whatever title may be
ascribed to such person and shall include, in particular, the sole
director, any de facto director as well as any other person who, at
the request of the Corporation, acts or acted as director of another
body corporate of which the Corporation is or was a shareholder or a
creditor or any person who, at the relevant time, acted in that
capacity; and "Board of Directors" shall mean the body of the
Corporation made up of the sole director or of all the directors;
"Inspector General" shall mean the Inspector General of Financial
Institutions who is responsible for carrying out the administration
of An Act respecting the legal publicity of sole proprietorships;
"juridical or business day" shall mean any Monday, Tuesday,
Wednesday, Thursday or Friday, to the extent that it does not fall
on a non-juridical day or holiday;
"meeting of the shareholders" shall mean an annual meeting of the
shareholders, a special meeting of the shareholders as well as any
meeting of the holders of any class or of any series of securities;
"non-juridical day or holiday" shall mean any of the following days,
namely: any Saturday or Sunday; New Year's Day (January 1st); Good
Friday; Easter Monday; the birthday or the day fixed by proclamation
for the celebration of the birthday of the reigning Sovereign;
Victoria Day; Dominion Day or Dollard-des-Ormeaux Day; Saint-Jean
Baptiste Day (June 24th); Canada Day or Confederation Day (July 1st)
or July 2nd if July 1St falls on a Sunday; the first Monday in
September designated Labour Day; the second Monday in October
designated Thanksgiving Day; Remembrance Day (November 11th);
Christmas Day (December 25th); any day appointed by proclamation of
the Governor-General of Canada to be observed as a day of general
prayer or mourning or day of public rejoicing or thanksgiving; in
the Province of Quebec, any of the following additional days, namely
any day appointed by proclamation of the Lieutenant-Governor to be
observed as a public holiday or as a day of general prayer or
mourning or day of public rejoicing or thanksgiving within the
province, and any day which shall be a non-juridical day or holiday
by virtue of an act of the legislature of the province as well as
any day which shall be appointed to be observed as a civic holiday
by resolution of the council or of any other authority charged with
the administration of the civic or municipal affairs of a city,
town, municipality or other organized district. Moreover, the 26th
day of December shall be considered a non-juridical day or holiday,
as shall be the 2nd day of January;
"officer" shall include the President of the Corporation, the
Chairman of the Board of Directors, the Vice-President, the
Secretary, the Assistant-Secretary, the Treasurer, the
Assistant-Treasurer and the Managing Director;
"person" shall include, in particular, an individual or a natural
person, a partnership within the meaning of the Civil Code of
Quebec, an association, a body corporate, a trustee, the liquidator
of a succession or a testamentary executor, a tutor or a guardian, a
curator, an adviser to a person of full age or a committee, a
mandatary or agent, the administrator of a succession or of an
estate or any representative of a deceased person or any other
person responsible for the administration of the property of another;
"record date" shall mean the last possible registration date which
the sole director or the directors may fix in advance, within fifty
(50) days prior to the event in question, for the purposes of
determining the shareholders entitled to receive dividends, to
participate in the distribution subsequent to liquidation, or the
shareholders who or which are qualified for any other purpose,
except as regards the right to receive notice of, or to vote at, a
meeting of the shareholders; and the record date in order to
determine the shareholders qualified for any other purpose, except
as regards the right to vote or the right to receive notice of a
meeting of the shareholders, shall be the date of passage by the
sole director or by the directors of the resolution to this end, at
the time of close of business;
"Register" shall mean the register of sole proprietorships,
partnerships and legal persons created pursuant to An Act respecting
the legal publicity of sole proprietorships, which is also known as
the Centre Informatise Du Registre des Entreprises du Quebec
(CIDREQ) and which is administered by the Inspector General;
"registration procedure" shall mean any registration procedure
required by law by virtue of which a Corporation shall register or
obtain a license or a permit in order to carry on business in a
province, in a territory, in another state or in another country or
political subdivision thereof;
"Regulations" shall mean the Regulations made under the Act and as
amended from time to time, and any Regulation which may be
substituted therefor. In the event of such substitution, any
reference in the by-laws of the Corporation to a provision of the
Regulations shall be read as a reference to the provision
substituted therefor in the new Regulations;
"representative" shall mean any officer or mandatary or agent of the
Corporation or any other person who, at the request of the
Corporation, acts or acted as officer or as mandatory or agent of a
body corporate of which the Corporation is or was a shareholder or a
creditor or any person who, at the relevant time, acted in that
capacity and shall include any promoter or any incorporator of the
Corporation;
"reserved powers", in respect of the sole director or of the
directors, shall mean the duties which, according to the Act, must
be discharged by the sole director or by the directors, including,
in particular, the power to:
a) submit to the sole shareholder or to the shareholders
any matter requiring the approval of the latter;
b) fill vacancies arising among the directors and fill the
position of auditor;
c) issue securities unless the sole director or the
directors have set in advance the method and conditions
of the issue;
d) declare dividends;
e) acquire, in particular by way of purchase or of
redemption, the securities issued by the Corporation;
f) pay the commission provided for in section 41 of the Act
to any person purchasing, or agreeing to purchase or to
find buyers for, the securities of the Corporation;
g) approve the management proxy circulars referred to in
Part XIII of the Act;
h) approve the take-over bid circulars or the directors'
circulars referred to in Part XVII of the Act;
i) approve the annual financial statements of the
Corporation referred to in section 155 of the Act; and
j) pass, amend or repeal by-laws;
"special meeting" shall include, in particular, a special meeting of
the holders of securities of any class and a special meeting of all
shareholders entitled to vote at an annual meeting of the shareholders;
and
"unanimous shareholder agreement" or "unanimous agreement" shall
mean the lawful written agreement which, according to subsection
146(2) of the Act, is designed to restrict, in whole or in part, the
powers of the sole director or of the directors to manage the
business and the affairs of the Corporation and which has been
entered into among all the shareholders or among all the
shareholders and one (1) or more persons who are not shareholders,
and, in accordance with subsection 146(3) of the Act, shall include
the written declaration to the same effect by the sole shareholder
who is the beneficial owner of all the issued securities of the
Corporation.
6. Definitions in the Act or in the Regulations. Subject to the above
definitions, the definitions provided for in the Act or in its
Regulations shall apply to the terms and to the expressions used in the
by-laws of the Corporation.
C. INTERPRETATION
7. Rules of interpretation. Terms and expressions used only in the
singular shall include the plural and vice-versa, and those only
importing the masculine gender shall include the feminine and the
neutral genders and vice-versa.
8. Discretion. Unless otherwise provided, where the by-laws confer a
discretionary power upon the sole director or on the directors, the
latter shall exercise such power as they shall see fit, and shall act
prudently, diligently, honestly and faithfully in the best interests of
the Corporation and they shall avoid placing themselves in a position
of conflict of interest between their personal interest and that of the
Corporation. The sole director or the directors may also decide not to
exercise such power. No provision contained in these by-laws shall be
interpreted so as to increase the duties incumbent on the sole director
or on the directors beyond those which are provided in the Act.
9. Precedence. In the event of a contradiction between the Act, the
unanimous shareholder agreement or the written declaration of the sole
shareholder, the articles or the by-laws of the Corporation, the Act
shall prevail over the unanimous shareholder agreement or the written
declaration of the sole shareholder, the articles and the by-laws; the
unanimous shareholder agreement or the written declaration of the sole
shareholder shall prevail over the articles and the by-laws; and the
articles shall prevail over the by-laws.
10. Headings. The headings used in these by-laws shall serve merely as
references and they shall not be considered in the interpretation of
the terms, of the expressions or of the provisions contained in these
by-laws.
11. Time limits. If the date set for doing anything, in particular the
sending of a notice, falls on a non-juridical day or holiday, such
thing may be validly done on the next juridical or business day. In
computing any time limit set by these by-laws, the day which marks the
starting point is not counted, but the day of the deadline is.
Non-juridical days or holidays are counted but, when the last day is a
non-juridical day or holiday, the time limit is extended to the next
juridical or business day.
Section 2. CORPORATION
A. REGISTERED OFFICE AND ESTABLISHMENT
12. Place and address of registered office. The registered office of the
Corporation shall be located in the Province of Quebec in the place
indicated in its articles or at the address indicated at the relevant
time in the declaration deposited in the Register and in the Notice of
Registered Office or of Change of Registered Office filed with the
Director pursuant to section 19 of the Act.
13. Change of address and of place. The sole director or the directors, by
way of resolution, may change the address of the registered office of
the Corporation within the boundaries of the place specified in its
articles. The President of the Corporation and/or the Secretary or any
other representative designated by the sole director or by the
directors shall notify the Inspector General of this change by filing a
declaration to this effect pursuant to An Act respecting the legal
publicity of sole proprietorships and send to the Director, within
fifteen (15) days, a Notice of Change of Registered Office pursuant to
subsection 19(4) of the Act, this change of address of the registered
office taking effect upon receipt of such notice by the Director. The
sole director or the directors may transfer the registered office of
the Corporation to another place by amending the articles of the
Corporation. Such amendment shall take effect from the date indicated
on the certificate of amendment.
14. Establishment. The Corporation may have one (1) or more establishments
elsewhere in the province in a place other than that of its registered
office..
15. Applicable legislation. Where the Corporation has an establishment or
where it carries on business in a province or in a territory within
Canada or in another jurisdiction, it shall comply with the legislation
applicable to it in that province, in that territory, in that other
state or in that other country or political subdivision thereof and, in
particular, it shall comply with the registration procedure. The
President of the Corporation or any person designated by him are
authorized to sign any document and take all appropriate action with
respect to such registration procedure.
16. Notices to the Corporation. Notices or documents to be sent to, or
served upon, the Corporation may be so sent or served, by registered
or by certified mail, to or at the address of the registered office
indicated at the relevant time in the declaration deposited in the
Register and in the Notice of Registered Of lice or of Change of
Registered Of lice filed with the Director pursuant to section 19 of
the Act. In such a case, the Corporation shall be deemed to have
received, or to have been served, such notices or documents on the
date of normal mail delivery unless reasonable grounds to the contrary
exist.
B. SEAL AND OTHER MEANS OF IDENTIFICATION OF THE CORPORATION
17. Form and contents of seal. Unless a different form or other contents
are approved by the sole director or by the directors, the seal of the
Corporation shall consist of two (2) concentric circles between which
shall appear the corporate name of the Corporation and only the year of
its incorporation may be written in the center of this seal.
18. Logo. The Corporation may approve one (1) or more logos according to
the specifications prescribed by the sole director or by the directors.
19. Facsimile of the seal. If the Corporation carries on business outside
the province in which its registered office is located, it may approve
one (1) or more facsimiles of its seal. Unless other contents are
prescribed by the sole director or by the directors, on any such
facsimile shall appear the corporate name of the Corporation and/or its
version in the language of the province, of the territory, of the state
or of the country or political subdivision thereof where the facsimile
is used, the year of its incorporation only and the name of the
province, of the territory, of the state or of the country or political
subdivision thereof.
20. Safekeeping of the seal. The seal shall be kept at the registered
office of the Corporation or at any other location determined by one
(1) of the persons authorized to use it.
21. Safekeeping of the facsimile. The facsimile of the seal shall be kept
at the principal establishment of the Corporation situated in the
province, in the territory, in the state or in the country or political
subdivision thereof where the facsimile is used or at any other
location determined by one (1) of the persons authorized to use it.
22. Use of the seal. The use of the seal on a document issued by the
Corporation shall be authorized by one (1) of the following persons:
a) the Managing Director;
b) the President of the Corporation;
c) any Vice-President;
d) the Secretary;
e) the Treasurer; and
f) any other representative designated by the sole director or by the
directors.
23. Use of the facsimile. The sole director or the directors shall
determine the representatives authorized to use the facsimile of the
seal of the Corporation and only one (1) such authorized
representative, at a given time, may affix the facsimile to a document
issued by the Corporation.
24. Validity. The Corporation or its guarantors may not assert against a
third party who has dealt in good faith with the Corporation or with
its assigns that a document bearing the seal of the Corporation or its
facsimile and issued by the sole director or by one (1) of its
directors, of its officers or of its mandataries or agents having
actual or usual authority to issue such document is neither valid nor
genuine.
25. Name. The Corporation has a corporate name which shall be assigned to
it at the time of its incorporation and it shall exercise its rights
and perform its obligations under that name. The sole director or the
directors may approve or, as the case may be, abandon, the use of one
(1) or more assumed, business, trade or firm names or trade-marks so as
to enable the Corporation to carry on business or to identify itself,
or, as the case may be, to cease to carry on business or to identify
itself, by a name other than its corporate name or to identify, or to
cease to identify, its wares or its services under one (1) or more
trade-marks. However, the corporate name of the Corporation shall be
set out in legible characters on all its negotiable instruments,
contracts, invoices and orders for goods or services.
C. BOOKS AND REGISTERS
26. Corporate Records Book. The Corporation shall opt for one (1) or more
books in which the following documents, as the case may be, are to be
kept:
a) a copy of the articles of the Corporation as well as any related
certificate;
b) the by-laws of the Corporation and any amendments thereto;
c) a copy of the unanimous shareholder agreement or of the written
declaration of the sole shareholder;
d) a copy of the Notices of Directors or of Change of Directors filed
with the Director pursuant to sections 106 or 113 of the Act;
e) a copy of the Notices of Registered Office or of Change of
Registered Office filed with the Director pursuant to section 19
of the Act;
f) a copy of any declaration deposited in the Register;
g) the resolutions of the sole director or of the directors, of the
Executive Committee and of the other committees of the Board of
Directors as well as the minutes of their meetings;
h) the resolutions of the sole shareholder or of the shareholders as
well as the minutes of the meetings of the shareholders;
i) a register of the directors indicating the name, address and
citizenship of each director as well as the date of the
commencement and, as the case may be, of the end of his term of
office;
j) a register containing the notices of disclosure of interest given
pursuant to subsection 120(6) of the Act;
k) a register of the shareholders indicating the name and address of
each shareholder as well as the date of his registration as
shareholder and, as the case may be, the date on which this
registration was cancelled;
l) a register of the securities issued by the Corporation indicating,
for each class or series of securities, the name, in alphabetical
order, and the last-known address, of each of the holders of these
securities or their predecessors, the number of securities of each
holder and the date and the conditions of any transaction with
respect to each security as well as the reference numbers for the
purposes of the transfer registers and of the security
certificates; and
m) a transfer register indicating the designation of the securities
transferred, the number and the date of the transfer, the names of
the transferor and of the transferee, the number of securities
transferred as well as the numbers of the certificates issued and
cancelled.
27. Minutes and resolutions. The minutes of the meetings of the Board of
Directors, of the Executive Committee and of the other committees of
the Board of Directors and the resolutions of the sole director or of
the directors, of the Executive Committee and of the other committees
of the Board of Directors as well as the resolutions of the sole
shareholder or of the shareholders and the minutes of the meetings of
the shareholders may be kept in the same Corporate Records Book under
the same tab divider.
28. Safekeeping. The Corporate Records Book shall be kept at the registered
office of the Corporation or at any other place determined by the sole
director or by the directors.
29. Accounting records. The Corporation shall keep an adequate accounting.
If the accounting of the Corporation is kept abroad, there shall be
kept, at the registered office or at any other office in Canada, books
enabling the sole director or the directors to ascertain on a quarterly
basis, with reasonable accuracy, the financial position of the
Corporation.
30. Examination of books, registers and documents. Subject to the Act, the
sole shareholder or the shareholders and their creditors, their
mandataries or agents as well as the Director may examine, during the
normal business hours of the Corporation, the following books,
registers and documents: the articles of the Corporation; the by-laws
and any amendments thereto; the unanimous shareholder agreement or the
written declaration of the sole shareholder; the minutes of the
meetings of the Board of Directors, of the Executive Committee and of
the other committees of the Board of Directors and the resolutions of
the sole director or of the directors, of the Executive Committee and
of the other committees of the Board of Directors; the minutes of the
meetings of the shareholders and the resolutions of the sole
shareholder or of the shareholders; the Notices of Directors or of
Change of Directorsae well as the Notices of Registered Office or of
Change of Registered Office filed with the Director; the copy of any
declaration deposited in the Register; the register of the directors of
the Corporation; the register of the shareholders of the Corporation;
the security register indicating the names and addresses of the
shareholder or of the shareholders, the number of securities held and
the date and the details of any transaction with respect to the
securities; the transfer register. This right of examination may be
granted to any person, upon payment of a reasonable fee, where the
issued securities of the Corporation are or have been part of a public
issue and are held by several persons. Subject to the Act, no
shareholder, including the sole shareholder, unless he is also, as the
case may be, the sole director or a director, and no creditor of the
Corporation may examine the books, registers and documents of the
Corporation except for those specifically referred to in this
paragraph. In addition, the sole director or the directors and the
auditor of the Corporation shall have access to the books, registers
and documents of the Corporation at all times.
31. Non-certified copies of documents. The sole shareholder or the
shareholders as well as their mandataries or agents may obtain, upon
request and without charge, a non-certified copy of the articles, of
the by-laws of the Corporation and of any amendments thereto as well as
of the unanimous shareholder agreement or of the written declaration of
the sole shareholder, as the case may be.
32. Disclosure of information to shareholders. Unless otherwise provided in
the Act, no shareholder may insist upon being informed with respect to
the management of the business and of the affairs of the Corporation
especially where, in the opinion of the sole director or of the
directors, it would be contrary to the interests of the Corporation to
render any information public. Subject to paragraph 30 above, the sole
director or the directors may determine the conditions under which the
books, registers and documents of the Corporation may be made available
to the sole shareholder or to the shareholders.
PART II CORPORATION WITH MORE THAN ONE DIRECTOR
AND/OR SHAREHOLDER
Section 1. REPRESENTATION OF THE CORPORATION
33. Representative bodies. The Corporation shall act through its
representative bodies: the Board of Directors, the officers, the
meeting of the shareholders and its other representatives. These bodies
shall represent the Corporation within the limits of the powers granted
to them by virtue the Act, of its Regulations, of the articles, of a
unanimous shareholder agreement or of the by-laws. The Board of
Directors may be designated by any other name in any document issued by
the Corporation.
A. DIRECTORS
34. Mandatary or agent. The director shall be considered to be a mandatory
or agent of the Corporation. He shall have the powers and the duties
set out in the Act, in its Regulations, in the articles, in a unanimous
shareholder agreement and in the present by-laws as well as those which
are inherent in the nature of his office. In the course of discharging
his duties, he shall respect the duties with which he is charged under
the Act, its Regulations, the articles, a unanimous shareholder
agreement and the present by-laws and he shall act within the limits of
the powers granted to him.
35. Number. The number of directors shall be determined by the Board of
Directors between the minimum and the maximum indicated in the
articles. Failing such a decision, the number of directors of the
Corporation shall be the number of directors elected unanimously by the
shareholders entitled to vote or the number of directors determined by
a special resolution of the shareholders. Except in the case where
subsection 105(4) of the Act applies, the majority of the members of
the Board of Directors shall be made up of resident Canadians. The
Corporation may amend its articles in order to increase or to decrease
the number or the minimum or maximum number of directors, provided that
the number of votes in favour of the motion to decrease the number of
directors exceeds the number of votes cast against this multiplied by
the number of directors provided for in the articles. However, a
decrease in such numbers may not shorten the term of office of the
directors then in office.
36. Qualifications. Subject to the articles or to a unanimous agreement, a
person need not be a shareholder in order to become a director of the
Corporation. Moreover, any natural person may be a director except for
a person who is under eighteen (18) years of age, a person who is of
unsound mind and has been so found by a court of law in Canada or
elsewhere, a person who has the status of bankrupt or a person who has
been barred by a court of law from holding such an office.
37. Election. The directors shall be elected by the shareholders at the
first meeting of the shareholders and at each annual meeting or, as the
case may be, at a special meeting. In the event of a change in the
composition of the Board of Directors, the Corporation shall give
notice of this change by filing a declaration with the Inspector
General in accordance with An Act respecting the legal publicity of
sole proprietorships and send to
the Director a Notice of Change of Directors in accordance with
subsection 113(1) of the Act.
38. Acceptance of office. A director may accept his office expressly by
signing an Acceptance of Office form to this end. Furthermore, his
acceptance may be made tacitly and, in such a case, it may be inferred
from the actions, from the acts, from the deeds and even from the
silence of the director.
39. Term of office. Unless otherwise decided by the shareholders, each
director shall hold of lice for a term of one (1) year or until his
successor or his replacement shall have been appointed or elected,
unless the term of office of the director ends prematurely. A director
whose term of office has ended may be reselected. The term of office of
the first directors whose names appear at the relevant time in the
declaration deposited in the Register and in the Notice of Directors
prescribed by subsection 106(1) of the Act shall commence on the date
of the certificate of incorporation and shall end when that of their
successors or of their replacements shall commence.
40. De facto directors. The actions, the acts or the deeds of the directors
shall not be voidable by reason only that the latter were incapable,
that their appointment was irregularly made or that a declaration
deposited in the Register or that a Notice of Directors or of Change of
Directors filed with the Director pursuant to subsections 106(1) or
113(1) of the Act are incomplete, irregular or erroneous. The action,
the act or the deed of a person who no longer holds the office of
director shall be valid unless, before that action, that act or that
deed, a written notice shall have been sent or tendered to the Board of
Directors or unless a written notice stating that such person is no
longer a director of the Corporation shall have been entered in the
Corporate Records Book. This presumption shall only be valid with
respect to persons acting in good faith.
41. Notices to directors. The notices or the documents required by the Act,
by its Regulations, by the articles, by the by-laws of the Corporation
or by a unanimous shareholder agreement to be sent to the directors may
be sent by registered or by certified mail or delivered in person to
the directors, to or at the address indicated at that time in the
Corporate Records Book or at the relevant time in the declaration
deposited in the Register and in the Notice of Directors or of Change
of Directors prescribed by sections 106 or 113 of the Act and filed
with the Director. The directors to whom are sent notices or documents
by registered or by certified mail shall be deemed to have received
them at the date of normal mail delivery for such registered or
certified mail. In order to prove receipt of such notices or documents
and the date thereof, it shall be sufficient to establish that the
letter was registered or certified, that it was properly addressed and
that it was deposited at a post office, as well as the date on which it
was so deposited and the time which was required for its delivery in
the ordinary course of mail delivery, or, if the letter was delivered
in person, it shall be sufficient to produce a dated acknowledgement of
receipt bearing the signature of the director.
42. Remuneration and expenses. The directors may fix their own remuneration
without having to pass a resolution to this end. Unless otherwise
provided, such remuneration shall be in addition to any other
remuneration paid to them in another capacity. A director may receive
advances and shall be entitled to be reimbursed for all expenses
incurred in the execution of his office except for those incurred as a
result of his own fault. Moreover, the Board of Directors may pay an
additional remuneration to any director undertaking any task outside
the ordinary course of his office.
43. Conflict of interest. Any director who is a party to a material
contract or to a proposed material contract with the Corporation, or
who is a director of, or has a material interest in, any person which
is a party to a material contract or to a proposed material contract
with the Corporation shall disclose the nature and the extent of his
interest at the time and in the manner provided for by the Act. Any
such contract or proposed contract shall be submitted to the directors
or to the shareholders for approval even if the contract is one which,
in the ordinary course of the business the Corporation, would not
require the approval of the directors or of the shareholders, and a
director who has an interest in a contract submitted to the directors
shall not be entitled to vote on any resolution with respect to its
approval except as otherwise provided by the Act. By accepting his
office, a director shall be deemed to have given a general notice to
the Corporation and to the other directors, disclosing his interest in
any contract with regard to his remuneration, to his compensation and
to any insurance relating thereto. This provision shall be a sufficient
disclosure in accordance with subsection 120(6) of the Act.
44. Resignation. A director may resign from office by forwarding a letter
of resignation to the registered office of the Corporation by courier
or by registered or certified mail. The resignation of a director shall
be approved by the directors. Subject to such approval, the resignation
shall become effective on the date when the letter of resignation shall
have been received by the Corporation or on the date specified in the
letter of resignation if the latter is subsequent to the date of its
sending. Such resignation, however, shall not relieve the director of
the obligation of paying any debt owing to the Corporation before his
resignation became effective. A director shall be liable for any injury
caused to the Corporation by his resignation if he submits it without a
serious reason and at an inopportune moment. However, a director shall
be entitled to the remuneration which he has earned until the date of
his resignation.
45. Removal from office. Unless otherwise provided in the articles or in a
unanimous agreement, any director may be removed from office
prematurely by way of an ordinary resolution passed, at a special
meeting called for this purpose, by a majority of the shareholders
entitled to elect him. Notwithstanding the fact that the director has
been removed from office prematurely, without a serious reason and at
an inopportune moment, the Corporation shall not be liable for any
injury caused to a director by his removal from office. Where the
holders of a class or of a series of securities have the exclusive
right to elect a director, the latter may only be removed from office
by an ordinary resolution passed at a meeting of the holders of that
class or of that series. The director against whom a request for
removal from office is directed shall be notified of the place, of the
date and of the time of the meeting within the same time frame as that
provided for the calling of the meeting. A director who is informed, in
particular by notice, of the calling of a meeting with a view to
removing him from office the shareholders, orally or in writing, and
state the reasons for his opposition to the resolution proposing his
removal from office, in accordance with section 110 of the Act.
Furthermore, at the same meeting, the shareholders, by way of an
ordinary resolution, may fill a vacancy caused by the removal from
office of the director.
46. End of term of office. The term of office of a director of the
Corporation shall end in the event of his death, of his resignation, of
his removal from office or ipso facto if he no longer qualifies as a
director, upon expiry of his term of office, by the institution of a
method of protective supervision in his respect or by one of the common
causes of extinction of obligations provided for by law. The term of
office of a director shall also end in the event of the bankruptcy of
the Corporation.
47. Vacancies. Subject to subsections 109(3), 111(3), 111(4) and 114(3) of
the Act, to paragraph 45 hereof and unless the articles provide
otherwise, the directors, if a quorum exists, may fill a vacancy in
their numbers on the Board of Directors. If the vacancy cannot be so
filled by the directors, the latter shall call, within thirty (30)
days, a special meeting of the shareholders in order to fill this
vacancy. If there are no longer any
directors sitting on the Board of Directors or if the directors fail to
call such a meeting within the prescribed time limit, then one (1) or
more shareholders holding not less than five percent (5%) of the issued
securities of the Corporation may call such a meeting. In the event
that the term of office of all the directors shall have ended before
any securities of the Corporation have been issued, the last director
shall be deemed to have subscribed for one (1) security of the
Corporation and such security shall be deemed to have been issued
conditionally at the end of the term of office of this director thirty
(30) days before the end of such term. At the time of issue of such
security, the Corporation shall lend to the last director an amount
equal to the realizable value of the security and shall apply the
proceeds of this loan in payment of the security so issued. The
shareholder shall then proceed forthwith to elect a new Board of
Directors. Vacancies on the Board of Directors shall then be filled by
way of an ordinary resolution of the shareholders or, as the case may
be, of the holders of a class or of a series of securities having an
exclusive right to elect the director whose office is vacant. A
director appointed to fill a vacancy shall complete the unexpired
portion of his predecessor's term and shall remain in office until his
successor or his replacement shall have been appointed or elected. The
Corporation shall give notice of this change by filing a declaration
with the Inspector General pursuant to An Act respecting the legal
publicity of sole proprietorships and send to the Director a Notice of
Change of Directors in accordance with subsection 113(1) of the Act.
B. POWERS OF THE DIRECTORS
48. General rule. The directors shall supervise the management and carry on
the business and the affairs of the Corporation and they may execute,
in the name of the latter, contracts of any kind which are allowed by
law. Generally speaking, they shall exercise all the powers and duties
of the Corporation and perform all the actions, the acts or the deeds
within the limits of the powers of the latter, except those which the
Act or a unanimous agreement expressly reserve for the shareholders. In
particular, the directors shall be expressly authorized to lease, to
purchase or otherwise to acquire or to sell, to exchange, to
hypothecate or to mortgage, to pledge or otherwise to dispose of the
movable or immovable property or personal or real property, presently
held or after-acquired, of the Corporation. The directors may pass
resolutions with respect to reserved powers and a copy of these
resolutions shall be kept in the Corporate Records Book. Finally, they
may perform any other action, act or deed which is useful or necessary
in the interests of the Corporation.
49. Duties. Every director of the Corporation, in the exercise of his
powers and in the discharge of his duties, shall act prudently,
diligently, honestly and faithfully in the best interests of the
Corporation and avoid placing himself in a position of conflict of
interest between his personal interest and that of the Corporation.
Moreover, every director of the Corporation shall comply with the Act,
with its Regulations, with the articles, with the by-laws of the
Corporation and with any unanimous shareholder agreement of the
Corporation. In arriving at a decision, he may rely in good faith on
the opinion or on the report of an expert and, in such a case, shall be
deemed to have acted prudently, diligently, honestly and faithfully in
the best interests of the Corporation.
50. Gifts inter vivos. The directors may make gifts inter vivos of the
assets of the Corporation, even for a substantial value, without having
to obtain the consent of the shareholders, provided that such gifts
shall be made in the best interests of the Corporation.
51. By-laws. Unless otherwise provided in the articles, in the by-laws of
the Corporation or in a unanimous shareholder agreement, the directors,
by way of resolution, may pass,
amend or repeal any by-law governing the business and the affairs of
the Corporation. By-laws passed, amended or repealed by the directors
according to the above shall be submitted to the shareholders at the
following meeting. By-laws passed, amended or repealed by the directors
shall take effect on the date of their passage, of their amendment or
of their repeal by the directors. After confirmation or amendment by
the shareholders, they shall continue in force in their original or
amended state, as the case may be. However, they shall cease to have
effect following their rejection by the shareholders or in the event of
failure by the directors to submit them to the shareholders at the
meeting following their passage. Furthermore, in the event of a
rejection by the shareholders of a by-law or of a failure by the
directors to submit such by-law to the meeting of the shareholders, any
subsequent resolution by the directors to the same general effect
cannot come into force until after confirmation by the shareholders.
52. Banking or finance. The banking or financial operations of the
Corporation shall be carried on with the banks or with the financial
institutions designated by the directors. The directors shall also
designate one (1) or more persons to carry out these banking or
financial operations on behalf of the Corporation.
53. Financial year. The date of the end of the financial year of the
Corporation shall be determined by the directors.
54. Approval by shareholders. The directors, in their discretion, may
submit any contract, decision made or transaction for approval,
confirmation or ratification at a meeting of the shareholders called
for this purpose. Except in the event of disclosure by a director of
the nature or of the extent of his interest in a material contract or
in a proposed material contract with the Corporation, any such
contract, decision made or transaction shall be approved, confirmed or
ratified by way of a resolution passed by a majority of the votes cast
at any such meeting and, unless any different or additional requirement
is imposed by the Act, by the articles or by any other by-law of the
Corporation, such contract, such decision made or such transaction
shall be as valid and as binding upon the Corporation and upon the
shareholders as if it had been approved, confirmed or ratified by all
the shareholders of the Corporation.
C MEETINGS OF THE BOARD OF DIRECTORS
55. Calling of meetings. The Chairman of the Board of Directors, the
President of the Corporation, any Vice-President, the Secretary or any
two (2) directors may call at any time a meeting of the Board of
Directors and the Secretary of the Corporation shall call the meeting
when so directed or otherwise authorized to do so. Such meetings shall
be called by way of a notice sent by mail, by telegram, by telex or by
any other electronic means or delivered in person to the directors, to
or at the address appearing at that time in the Corporate Records Book
or at the relevant time in the declaration deposited in the Register
and in the Notice of Directors or of Change of Directors referred to in
sections 106 and 113 of the Act and filed with the Director. The notice
of the meeting shall specify the place, the date and the time of such
meeting and, subject to paragraph 59 below, be received at least two
(2) clear juridical or business days prior to the date set for the
meeting. It need specify neither the purpose nor the agenda of the
meeting but it shall detail any question respecting the reserved
powers. The director shall be deemed to have received such notice
within the normal time for delivery according to the means of
communication used unless there are reasonable grounds for believing
that the notice was not received on time or that it was not received at
all. If the address of a director does not appear in the Corporate
Records Book, such notice may be sent to the address where, in the
judgment of the sender, it is most likely to be received promptly by
the director.
56. First directors' resolutions. After the issue of the certificate of
incorporation, the first directors, by way of resolutions in writing,
may pass by-laws, approve forms of security
certificates and of registers of the Corporation, authorize the issue
of securities, appoint officers, appoint one (1) or more auditors or,
as the case may be, accountants of the Corporation, make any necessary
arrangements with banks or with financial institutions, and deal with
any other question.
57. Regular meetings. The directors may determine the place, the date and
the time where or when regular meetings of the Board of Directors shall
be held. A copy of any resolution of the directors setting the place,
the date and the time of these regular meetings shall be sent to each
director immediately after its passage but no further notice of a
regular meeting shall be required unless a question relating to the
reserved powers must be dealt with or settled at that meeting.
58. Annual meeting. Each year, immediately after the annual meeting of the
shareholders, a meeting of the Board of Directors made up of the
newly-elected directors shall be held, provided that a quorum exists,
for the purposes of appointing the officers, the accountant of the
Corporation, as the case may be, and the other representatives of the
Corporation, and to deal with any question which may be raised thereat.
Such meeting shall be held without notice unless a question respecting
the reserved powers must be dealt with or settled at that meeting.
59. Emergency meeting. A meeting of the Board of Directors may be called by
any means, at least three (3) hours before the meeting, by one (1) of
the persons who have the power to call a meeting of the Board of
Directors, if, in the opinion of such person, it is urgent that a
meeting be held. In determining the validity of a meeting so called,
such notice shall be considered sufficient in itself.
60. Waiver of notice. Any director, orally or in writing, may waive his
right to receive notice of a meeting of the Board of Directors or of a
change in such notice or in the time limit indicated therein. Such
waiver may be given validly before, during or after the meeting in
question. The attendance of a director at the meeting, in itself, shall
constitute a waiver, except where he indicates that he is attending the
meeting for the express purpose of objecting to the proceedings
because, among other reasons, the meeting was not validly called. The
signing of a written resolution in lieu of a meeting shall also
constitute a waiver of notice of the calling and of the holding of an
actual meeting.
61. Place of meetings. Meetings of the Board of Directors shall be held at
the registered office of the Corporation or at any other place, in the
Province of Quebec or elsewhere, which the directors may determine.
62. Quorum. Subject to the Act, to the articles, to the by-laws of the
Corporation or to a unanimous shareholder agreement, the quorum at a
meeting of the Board of Directors shall be a majority of the directors
then in office. If a quorum is not attained within fifteen (15) minutes
after commencement of the meeting, the directors may only decide on an
adjournment thereof. The quorum shall be maintained for the duration of
the meeting.
63. Canadian majority. Unless a majority of the directors attending a
meeting is made up of resident Canadians, the directors may not discuss
any matter. In accordance with subsection 114(4) of the Act and
notwithstanding the above, the directors may conduct business, even in
the absence of a majority of resident Canadians, if, among the
directors not in attendance, one (1) resident Canadian approves the
proceedings in writing, by telephone or by any other means of
communication and where the attendance of such director would have
enabled the meeting to attain the requisite Canadian majority.
64. President and Secretary. The Chairman of the Board of Directors or, in
his absence, the President of the Corporation or any Vice-President
shall chair all meetings of the Board of Directors, and the Secretary
of the Corporation shall act as the secretary thereof. In the absence
of these persons, the directors shall choose a chairman from their
number, and, as the case may be, any person to act as secretary of the
meeting.
65. Procedure. The chairman of a meeting of the Board of Directors shall be
responsible for the proper conduct of the meeting, shall submit to the
directors the proposals which must be put to a vote and, generally,
shall establish reasonable and impartial rules of procedure to be
followed, subject to the Act, to the by-laws of the Corporation or to
the rules of procedure usually followed during deliberating assemblies.
Failure by the chairman of the meeting to submit a proposal shall
entitle any director to do so before the rising or the adjournment of
said meeting; if such proposal falls within the powers of the directors
and if no reference thereto is required in the notice of the meeting,
the directors may consider the proposal without it having been
seconded. To this end, the agenda for any meeting of the Board of
Directors shall be deemed to allow time for the directors to submit
their proposals.
66. Vote. Each director may cast one (1) vote and all questions submitted
to the Board of Directors shall be decided by a majority vote of the
directors in attendance and voting. Voting shall be by a show of hands
unless the chairman of the meeting or a director in attendance requests
a ballot. If a ballot is held, the secretary of the meeting shall act
as scrutineer and count the ballots. In both cases, if one (1) or more
directors participate in a meeting by way of technical means, they
shall indicate orally to the secretary the manner in which they shall
be casting their vote. Voting by proxy shall not be permitted at
meetings of the Board of Directors. The chairman of the meeting shall
not have a second or casting vote in the event of a tie vote.
67. Dissent. A director in attendance at a meeting of the Board of
Directors shall not be bound by the actions, by the acts or by the
deeds of the Corporation and shall not be deemed to have approved all
the resolutions passed or all the decisions made if, in the course of
the meeting, his dissent is recorded in the minutes of such meeting,
whether at his request or not, or if a notice in writing of his dissent
is sent to the secretary of the meeting before the adjournment or the
rising of the meeting or if his dissent is sent to the Corporation by
registered or by certified mail or is delivered to the registered
office of the Corporation immediately after the meeting is adjourned or
after it rises. A director absent from a meeting of the Board of
Directors shall be deemed not to have approved any resolution or to
have participated in any decision made at such meeting, if, within
seven (7) days after becoming aware of the resolution, he causes his
dissent to be recorded in the minutes of the meeting or if he sends his
dissent or causes it to be sent by registered or by certified mail or
delivers it or causes it to be delivered to the registered office of
the Corporation.
68. Meeting by way of technical means. All the directors, or one (1) or
several directors with the consent of all the other directors of the
Corporation, which consent may be given before, during or after the
meeting, in a specific manner for a given meeting or in a general
manner for all subsequent meetings, may participate in a meeting of the
Board of Directors by way of technical means, such as a telephone,
which enable them to communicate simultaneously and instantaneously
with the other directors or persons attending, or participating in, the
meeting. In such cases, these directors shall be deemed to have
attended the meeting, which shall be deemed to have been held in the
Province of Quebec. The meeting shall also be deemed to be made up of a
majority of resident Canadians if a majority of the directors
attending, or participating in, the meeting, in person or by way of
technical means, is made up of resident Canadians. The directors
attending, or participating in, a meeting held using such technical
means may decide on any matter, such as the passage of a by-law, one
(1) of the reserved powers or the replacement of a director. A director
may also declare or disclose any conflict of interest at such meeting.
The Secretary shall keep minutes of such meetings and shall record any
dissent. The statement by the chairman and by the secretary of the
meeting so held to the effect that a director participated in the
meeting shall be valid until proven otherwise. In the event of an
interruption in the communication with one (1) or more directors, the
meeting shall continue to be valid if a quorum is maintained.
69. Resolutions in lieu of meetings. Resolutions in writing, signed by all
the directors entitled to vote thereon at meetings of the Board of
Directors, shall be ae valid ae if they had been passed at such
meetings. A copy of these resolutions, once posed, shall be kept with
the minutes of the proceedings of the Board of Directors.
70. Adjournment. The chairman of a meeting of the Board of Directors, with
the consent of the majority of the directors in attendance, may adjourn
this meeting to another place, date and time without having to provide
notice of the meeting again to the directors. The reconvening of any
meeting so adjourned may take place without notice if the place, the
date and the time of the adjourned meeting are announced at the
original meeting. Upon reconvening of the meeting, the directors may
validly decide on any matter which was not settled at the original
meeting, provided a quorum is present. The directors who constituted
the quorum at the original meeting need not be those constituting the
quorum at the reconvened meeting. If a quorum does not exist at the
reconvened meeting, the meeting shall be deemed to have ended at the
previous meeting when the adjournment was pronounced.
71. Validity. Decisions made during the course of a meeting of the Board of
Directors shall be valid notwithstanding any irregularity, thereafter
discovered, in the election or in the appointment of one (1) or more
directors or their inability to serve as directors.
D. OFFICERS AND REPRESENTATIVES
72. Mandataries or agents. The officers and the representatives shall be
considered to be mandataries or agents of the Corporation. They shall
have the powers and the duties set out in the Act, in its Regulations,
in the articles and in the present by-laws as well as those which are
inherent in the nature of their office. In the course of discharging
their duties, they shall respect the duties with which they are charged
under the Act, its Regulations, the articles and the present by-laws
and they shall act within the limits of the powers granted to them.
73. Appointment. Subject to the provisions of the articles, of the by-laws
or of any unanimous agreement, the directors may appoint any qualified
person, who, unless otherwise provided in the present by-laws, need not
necessarily be a shareholder or a director of the Corporation, to the
office of President of the Corporation, of Chairman of the Board of
Directors, of Vice-President, of Treasurer or of Secretary, and they
may provide for assistants of such officers. Moreover, the directors,
or the President of the Corporation or the Chairman of the Board of
Directors with the consent of the directors, may create any other
office and appoint thereto qualified persons, whether they be
shareholders of the Corporation or not, to represent the Corporation
and to discharge the duties which they may determine. The officers or
the representatives may delegate the powers which they have received
from the directorsae well as those which are inherent in their of lice.
However, they shall select their substitutes carefully and provide them
with appropriate instructions.
74. Cumulative duties. The same person may hold two (2) or more offices
within the Corporation, provided that they are not incompatible with
each other. Where the same person holds the offices of Secretary and
Treasurer, he may, but need not, be designated as the
"Secretary-Treasurer" of the Corporation.
75. Term of office.. The term of office of the officers and of the
representatives of the Corporation shall begin with their acceptance of
the office and such acceptance may be inferred from their actions, from
their acts or from their deeds. Their term of office shall continue
until their successors or their replacements shall have been appointed
by the directors unless their term of office ends prematurely in
accordance with paragraphs 94 to 96 of the present by-laws.
76. Remuneration. The remuneration of the of ricers or of the
representatives of the Corporation shall be fixed by the directors
without their having to pass a resolution to this end, or, in the
absence of such a decision, by the President of the Corporation. Unless
otherwise provided, such remuneration shall be in addition to any other
remuneration paid to the officer or to the representative in another
capacity by the Corporation. The fact that any officer, representative
or employee shall also be a director or a shareholder of the
Corporation shall not disqualify him from receiving, in his capacity of
officer, representative or employee, such remuneration as may be
determined.
77. Powers. Subject to the articles, to the by-laws or to a unanimous
shareholder agreement, the directors shall determine the powers of the
of officers and of the representatives of the Corporation. The
directors may delegate to them all their powers, except the reserved
powers or those which require the approval of the shareholders. The
officers and the representatives shall also have the powers inherent in
the Act or which normally relate to their of lice. Furthermore, they
may exercise these powers either within or outside the Province of
Quebec.
78. Duties. The officers and the representatives, in the discharge of their
duties, shall act prudently, diligently, honestly and faithfully in the
best interests of the Corporation and within the limits of their
respective offices and they shall avoid placing themselves in a
position of conflict of interest between their personal interest and
that of the Corporation. They shall be deemed to have acted within the
limits of their offices when they discharge their duties in a manner
which is more advantageous for the Corporation. They shall be held
liable to the Corporation for actions, acts or deeds performed alone
which they were only authorized to carry out in conjunction with one
(1) or more other persons unless they acted in a manner which turned
out to be more advantageous for the Corporation than that which had
been agreed upon. In arriving at a decision, they may rely in good
faith on the opinion or on the report of an expert and, in such a case,
shall be deemed to have acted prudently, diligently, honestly and
faithfully in the best interests of the Corporation.
79. Chairman of the Board of Directors. The directors may appoint a
Chairman of the Board of Directors who shall be a director. If a
Chairman of the Board of Directors is appointed, the directors may
delegate to him all of the powers and duties conferred by the present
by-laws on the President of the Corporation as well as any other powers
which the directors may determine.
80. President of the Corporation. The President of the Corporation shall be
its chief executive officer subject to the control of the directors. He
shall supervise, administer and manage generally the business and the
affairs of the Corporation, except for the reserved powers and for the
business which must be transacted by the shareholders at annual or
special meetings. He shall appoint and dismiss the mandataries or
agents as
well as hire, lay off, fire or dismiss the employees of the
Corporation. He shall also exercise all the powers and discharge all
the duties delegated to him by the directors. When requested to do so
by the directors, or by one (1) or more of them, he shall provide all
relevant information relating to the business and to the affairs of the
Corporation. If no Chairman of the Board of Directors has been elected,
or, if he is absent or unable to act, the President of the Corporation,
if he is a director and if he is in attendance, shall chair all
meetings of the Board of Directors and all meetings of the
shareholders.
81. Vice-President. In the absence of the President of the Corporation or
in the event of the latter's inability, refusal or failure to act, the
Vice-President shall possess all the powers and assume all the duties
of the President of the Corporation save that no Vice-President shall
chair a meeting of the Board of Directors or a meeting of the
shareholders who is not otherwise qualified to attend such meeting as a
director or as a shareholder, as the case may be. If there is more than
one (1) Vice-President, the President of the Corporation shall
designate any Vice-President to act on his behalf, and, if the
President of the Corporation fails to do so, the directors may
designate such Vice-President and, finally, failing such designation by
the directors, the Vice-Presidents may act on the basis of seniority.
82. Treasurer. The Treasurer shall manage generally the finances of the
Corporation. He shall be responsible for all funds, securities, books,
receipts or discharges and other documents of the Corporation. He shall
deposit all money and other valuables in the name and to the credit of
the Corporation in the bank or financial institution chosen by the
directors. He shall submit at each meeting of Board of Directors,
whenever required to do so by the President of the Corporation or by a
director, a detailed statement of account of the receipts and
disbursements as well as a detailed accounting of the financial
position of the Corporation. He shall present a detailed financial
statement of the Corporation, prepared in accordance with the Act, at
the meeting of the Board of Directors prior to the annual meeting of
the shareholders. He shall be responsible for receiving, and for
issuing receipts for, the amounts payable to the Corporation, and for
paying, and for receiving receipts for, amounts which the Corporation
owes, whatever the source of the funds may be. He shall discharge all
duties which are inherent in his of lice as well as those powers and
duties determined by the directors. The latter may appoint an
Assistant-Treasurer in order to assist the Treasurer of the Corporation
in the discharge of his duties.
83. Secretary. The Secretary shall act as secretary at all meetings of the
Board of Directors, of the Executive Committee, unless the latter
decides otherwise, and of the other committees of the Board of
Directors as well as at all the meetings of the shareholders. He shall
ensure that all notices are given and that all documents are sent in
accordance with the provisions the Act and with the by-laws of the
Corporation and he shall keep, in the Corporate Records Book, the
minutes of the meetings of the Board of Directors, of the Executive
Committee and of the other committees of the Board of Directors and of
the meetings of the shareholders as well as the resolutions of the
directors, of the Executive Committee and of the other committees of
the Board of Directors and the resolutions of the shareholders.
Moreover, he shall be responsible for the safekeeping of the seal of
the Corporation and shall ensure the maintenance and the updating of
all books, registers, reports, certificates and other documents of the
Corporation. He shall also be responsible for the filing of the records
of the latter. He shall countersign the minutes and the security
certificates. Finally, he shall discharge such other duties as shall be
entrusted to him by the President of the Corporation or by the
directors. The Assistant-Secretary shall exercise the powers and
discharge the duties which are delegated to him by the directors or by
the Secretary.
84. General Manager. The directors may appoint a resident Canadian among
them to act as General Manager. They may delegate to him all their
powers except for the reserved powers. The remuneration of the General
Manager shall be fixed by the directors. Unless otherwise provided,
such remuneration shall be in addition to any other remuneration to be
paid to him in another capacity by the Corporation. The General Manager
shall be entitled to be compensated by the Corporation for fees and
expenses incurred in the discharge of his duties except for those
incurred as a result of his own fault.
85. Posting of security bond. The directors, the President of the
Corporation or any person designated by any one (1) of them, may
require that certain officers, representatives or employees of the
Corporation post a security bond, in such form and containing such
guarantees as the directors may determine, in order to guarantee the
proper performance of their powers and discharge of their duties.
86. Conflict of interest. Any officer or representative shall avoid placing
himself in a position of conflict of interest between his personal
interest and that of the Corporation and he shall declare or disclose
any conflict of interest to the directors. The rules governing
conflicts of interest of the directors shall apply, with all necessary
changes, to the officers and to the representatives.
87. Signing of documents. Contracts, documents or instruments in writing
requiring the signature of the Corporation may be signed by the
President of the Corporation alone or by two (2) persons holding the
office of Vice-President, of Chairman of the Board of Directors, of
director, of Secretary, of Treasurer or of General Manager or by their
duly authorized assistants and all contracts, documents or instruments
in writing so signed shall bind the Corporation without the necessity
of any other authorization or formality. The directors may also
authorize any other person to sign and to deliver on behalf of the
Corporation all contracts, documents or instruments in writing and such
authorization may be given by way of resolution in general or in
specific terms.
88. Signing of declarations to be deposited in the Register. The
declarations which are to be filed with the Inspector General pursuant
to An Act respecting the legal publicity of sole proprietorships may be
signed by the President of the Corporation, by any director of the
Corporation or by any person designated by the directors.
89. Mechanically-reproduced signature. Subject to the Act, the directors
may permit the contracts, documents or instruments in writing which are
issued by the Corporation to bear mechanically reproduced signatures.
The signature appearing on a resolution in lieu of a meeting of the
Board of Directors or of the shareholders may also be mechanically
reproduced, including the use of a stamp as a signature.
90. Proxy holder of the Corporation. The directors may authorize any person
to sign and to convey proxies and to ensure that the proper ballots or
other evidence of the right to vote attached to all the securities held
by the Corporation shall be issued. Furthermore, the directors, from
time to time, may determine the manner in which, and designate one (1)
or more persons by whom, the rights to vote may or shall be exercised.
91. Legal or other proceedings. The President of the Corporation or any
other person authorized by the directors or by the President of the
Corporation shall be respectively authorized to commence any action,
suit, application, proceeding of a civil, of a criminal or of an
administrative nature or any other legal proceeding on behalf of the
Corporation or to appear and to answer for the Corporation with respect
to any writ, order or injunction, issued by any court of law or by any
tribunal, with respect to any interrogatories upon articulated facts or
examinations for discovery, and with respect to
any other action, suit, application or other legal proceeding in which
the Corporation shall be involved; to answer in the name of the
Corporation with respect to any seizure by garnishment in which the
Corporation shall be garnishee and to make any affidavit or sworn
declaration relating to such garnishment or to any other legal
proceeding to which the Corporation shall be made a party; to make
demands or requests for assignment of property or applications or
petitions for winding-up or liquidation or sequestration or
receivership orders against any debtor of the Corporation; to attend,
and to vote at, any meeting of the creditors or of the debtors of the
Corporation; to grant proxies and to take, with respect to such
actions, suits, applications or other legal proceedings, any other
action, act or deed or to make any other decision deemed to be in the
best interests of the Corporation.
92. Prima facie evidence of by-law. A copy of a by-law of the Corporation
to which the seal of the Corporation has been affixed and which
purports to have been signed by the President of the Corporation or by
the Secretary thereof shall be admissible as against any shareholder of
the Corporation as being, in itself, prima facie evidence of the
by-law.
93. De facto officers or representatives. The actions, the acts or the
deeds carried out by the officers or by the representatives shall not
be voidable by reason only of the fact that the latter were incapable
or that their appointment was irregularly made.
94. Resignation. Any officer or representative may resign from of lice by
forwarding a letter of resignation to the registered office of the
Corporation by courier or by registered or certified mail. The
resignation shall become effective upon receipt of the letter of
resignation by the Corporation or at any later date specified therein.
The resignation of an officer or of a representative may only take
place subject to the provisions of any existing employment contract
between him and the Corporation. However, the resignation shall not
relieve the officer or the representative of the obligation of paying
any debt owing by him to the Corporation before such resignation became
effective. The officer shall be liable for any injury caused to the
Corporation by his resignation if he submits it without a serious
reason and at an inopportune moment.
95. Removal from office. The directors may remove from office any officer
or representative of the Corporation and may choose the successor or
the replacement of such person. Nevertheless, the removal from office
of an officer or of a representative may only take place subject to the
provisions of any existing employment contract between him and the
Corporation. However, the Corporation shall be liable for any injury
caused to the officer or to the representative by his removal from
office without a serious reason and at an inopportune moment.
96. End of term of office.. The term of office of an officer or of a
representative shall end upon his death, his resignation, his removal
from office, upon expiry of his term of office as officer or
representative, if he is of unsound mind and is so found by a court of
law in Canada or elsewhere, if he acquires the status of bankrupt, upon
appointment of his successor or of his replacement, by the institution
of a method of protective supervision in his respect or by one of the
common causes of extinction of obligations provided for by law.
E. EXECUTIVE COMMITTEE AND OTHER COMMITTEES
97. Appointment. The directors may create an Executive Committee and
appoint its members. The appointment of the members of the Executive
Committee shall normally take place at the meeting of the Board of
Directors immediately following the annual meeting of the shareholders.
98. Qualifications. The members of the Executive Committee of the Board of
Directors shall be chosen from among the directors. A majority of the
members of the Executive Committee shall be made up of resident
Canadians unless subsection 105(4) of the Act applies.
99. Powers. Subject to the restrictions on the exercise of powers provided
for in subsection 115(3) of the Act, the Executive Committee shall
exercise, under the control of the directors, all the powers of the
directors with regard to the management and control of the business and
of the affairs of the Corporation, except for the reserved powers and
for those powers which require the approval of the shareholders. The
Executive Committee shall report on its activities to the directors who
may reverse or modify the decisions of the Executive Committee, subject
to the rights of third parties. The Executive Committee shall consult
with, and assist, the officers and the representatives in all the
business and the affairs concerning the Corporation and its management.
100. Meetings. The directors or any person appointed by them may call
meetings of the Executive Committee at any time. These meetings shall
be chaired by the Chairman of the Board of Directors, or, in his
absence, by a chairman selected from among their number by the members
of the Executive Committee in attendance at the meeting. The Secretary
of the Corporation shall also act as the secretary of the Executive
Committee, unless the Executive Committee decides otherwise. Written
resolutions signed by all the members of the Executive Committee shall
be as valid as if they had been passed at a meeting of the Executive
Committee. A copy of these resolutions, once passed, shall be kept with
the minutes of the proceedings of the Executive Committee. The rules
applicable to meetings of the Board of Directors shall apply, with all
necessary changes, to meetings of the Executive Committee. The quorum
at meetings of the Executive Committee shall be a majority of the
members of the Executive Committee.
101. Remuneration. Members of the Executive Committee shall be entitled for
their services to the remuneration which the directors of the
Corporation shall fix without having to pass a resolution to this end.
Unless otherwise provided, such remuneration shall be in addition to
any other remuneration paid to them in another capacity by the
Corporation.
102. Compensation. Members of the Executive Committee shall be entitled to
be compensated by the Corporation for fees and expenses incurred in the
discharge of their duties. Such compensation shall be made in
accordance with the Division of the present by-laws entitled
"Protection of the Directors, of the Officers and of the
Representatives".
103. Other committees. The directors may also create other advisory
committees which they deem necessary and appoint any person to serve
thereon, whether or not such person be a director of the Corporation.
The powers of these other committees shall be limited to those powers
delegated to them by the directors and such other committees shall only
have access to such information as the directors may determine. Members
of these other committees shall be entitled for their services to the
remuneration which the directors of the Corporation shall fix without
having to pass a resolution to this end. They shall also be entitled to
be compensated by the Corporation for fees and expenses incurred in the
discharge of their duties. Such compensation shall be made in
accordance with the Division of the present by-laws entitled
"Protection of the Directors, of the Officers and of the
Representatives". The rules applicable to meetings of the Board of
Directors shall apply, with all necessary changes, to meetings of these
other committees. The quorum at meetings of each of these committees
shall be a majority of the members of that committee.
104. Dissent. A member of the Executive Committee or of another committee of
the Board of Directors in attendance at a meeting of the Executive
Committee or of such other committee shall not be bound by the actions,
by the acts or by the deeds of the Corporation and shall not be deemed
to have approved all the resolutions passed or all the decisions made
if, in the course of the meeting, his dissent is recorded in the
minutes of such meeting, whether at his request or not, or if a notice
in writing of his dissent is sent to the secretary of the meeting
before the adjournment or the rising of the meeting or if his dissent
is sent to the Corporation by registered or by certified mail or is
delivered to the registered office of the Corporation immediately after
the meeting is adjourned or after it rises. A member of the Executive
Committee or of another committee of the Board of Directors absent from
a meeting of the Executive Committee or of such other committee shall
be deemed not to have approved any resolution or to have participated
in any decision made at such meeting, if, within seven (7) days after
becoming aware of the resolution, he causes his dissent to be recorded
in the minutes of the meeting or if he sends his dissent or causes it
to be sent by registered or by certified mail or delivers it or causes
it to be delivered to the registered office of the Corporation.
105. Removal from office and replacement. The directors may remove from
office any member of the Executive Committee or of any other committee
of the Board of Directors. Despite the fact that the removal from
office of a member of the Executive Committee shall have been carried
out prematurely, without a serious reason and at an inopportune moment,
the Corporation shall not be liable for any injury caused to the member
of the Executive Committee. The directors may fill any vacancy which
occurs on any committee at a meeting called for this purpose or by way
of resolution.
106. End of term of office. The term of office of a member of the Executive
Committee or of any other committee of the Board of Directors shall end
by reason of his death, of his resignation, of his removal from office
upon expiry of his term of office, if he is of unsound mind and is so
found by a court of law in Canada or elsewhere, if he acquires the
status of bankrupt, if he becomes disqualified from serving as a
director or as a member of the Executive Committee or of another
committee of the Board of Directors, upon appointment of his successor
or of his replacement, by the institution of a method of protective
supervision in his respect or by one of the common causes of extinction
of obligations provided for by law.
F. DIVISIONS
107. Creation. The directors may separate the activities of the Corporation
into divisions according to such criteria (such as type of activity,
geographical territory, etc.) and for such purposes as they may
determine. They may also subdivide the activities of such divisions
into subdivisions or consolidate these divisions or subdivisions
according to such criteria as they may determine.
108. Management. The directors, or the President of the Corporation with the
consent of the directors, may appoint one (1) or more persons to manage
a division or a subdivision and may determine their powers, duties,
terms of employment and remuneration. The persons managing such
divisions or subdivisions of the Corporation, by reason only of that
fact, shall not be officers of the Corporation.
G. PROTECTION OF THE DIRECTORS, OF THE OFFICERS AND OF THE
REPRESENTATIVES
109. Exclusion of liability vis-a-vis the Corporation and third parties.
Except as otherwise provided in the Act or in the by-laws of the
Corporation, no director or officer acting or
having acted for or in the name of the Corporation shall be held
liable, in this capacity or in his capacity as mandatary or agent of
the latter, whether it be vis-a-vis the Corporation or third parties,
for the actions, the acts or the deeds, the things done or allowed to
be done, the omissions, the decisions made or not made, the
liabilities, the undertakings, the payments made, the receipts given or
the discharges granted, the negligence or the faults of any other
director, officer, employee, servant or representative of the
Corporation. Among other things, no director or officer shall be held
liable vis-a-vis the Corporation for any direct or indirect loss
suffered by the latter for any reason whatsoever; more specifically, he
shall not be held liable either for the insufficiency or the deficiency
of title to any property acquired by the Corporation, or for or on its
behalf, or for the insufficiency or the deficiency of any security or
debt instrument in or by which any of the funds or of the assets of the
Corporation shall be or have been placed or invested or yet for any
loss or damage resulting from the bankruptcy, from the insolvency or
from the delictual or tortious action, act or deed of any person,
including any person with whom or with which funds, securities, assets
or negotiable instruments shall be or have been placed or deposited.
Furthermore, the directors or the officers shall not be held liable
vis-a-vis the Corporation for any loss, conversion of property,
misappropriation, embezzlement or any other damage resulting from any
dealings with respect to any funds, assets or securities or for any
other loss, damage or misfortune whatsoever which may occur in the
discharge of, or in relation to the discharge of, their duties unless
the same shall occur owing to their failure to discharge the duties of
their office prudently, diligently, honestly and faithfully in the best
interests of the Corporation or owing to the fact that the directors or
the officers shall have placed themselves in a position of conflict of
interest between their personal interest and that of the Corporation.
None of the above shall be interpreted in such a way as to relieve a
director or an officer of his duty to act in accordance with the Act
and with its Regulations or of his joint or several liability for any
breach thereof, in particular in the event of a breach of the specific
provisions of the Act or of its Regulations. Moreover, the directors or
the officers individually or personally liable vis-a-vis third parties
for the duration of their term of office in respect of a contract, a
decision made, an undertaking or a transaction, whether or not
concluded, or with respect to bills of exchange, to promissory notes or
to cheques drawn, accepted or endorsed, to the extent that they are
acting or they acted in the name, or on behalf, of the Corporation, in
the ordinary course of the performance of the powers which they have
received, unless they acted prior to the incorporation of the
Corporation and unless their actions, their acts or their deeds have
not been ratified by the Corporation within the time limit prescribed
by the Act after its incorporation.
110. Right to compensation. The Corporation shall compensate its directors,
its officers or its representatives in respect of all costs or expenses
reasonably incurred by them in connection with the defense of an
action, of a suit, of an application, of a proceeding of a civil, of a
criminal or of an administrative nature or of any other legal
proceeding to which one (1) or more of them were parties by reason of
their duties or of their office, whether this action, this suit, this
application or this legal proceeding was commenced by or on behalf of
the Corporation or by a third party. Reasonable costs or expenses shall
include, in particular, all damages or fines arising from the actions,
from the acts or from the deeds done by the directors, by the officers
or by the representatives in the discharge of their duties as well as
all amounts paid to settle an action or to satisfy a judgment. The
right to compensation shall exist only to the extent that the
directors, the officers or the representatives were substantially
successful on the merits in their defense of the action, of the suit,
of the application or of the legal proceeding, that they acted
prudently, diligently, honestly and faithfully in the best interests of
the Corporation, that they did not place themselves in a position of
conflict of interest between their personal interest and that of the
Corporation, and, in the case of an action, of a suit, of an
application or of a proceeding of a criminal or of an administrative
nature leading to the imposition of a
fine, to the extent that they had reasonable grounds for believing that
their conduct was lawful or to the extent that they were acquitted or
freed. The Corporation shall assume these liabilities in respect of any
person who acts or acted at its request as a director, as an officer or
as a representative of a body corporate of which the Corporation is or
was a shareholder or a creditor. As the case may be, this compensation
shall be paid to the heirs, legatees, liquidators or testamentary
executors, transferees, mandataries or agents, legal representatives,
successors, assigns or rightful claimants of the directors, of the
officers or of the representatives, in accordance with paragraph 114
below.
111. Legal action by third party. Where an action, a suit, an application, a
proceeding of a civil, of a criminal or of an administrative nature or
any other legal proceeding is commenced by a third party against one
(1) or more of the directors, of the officers or of the representatives
of the Corporation for one (1) or more actions, acts or deeds done in
the discharge of their duties, the Corporation shall assume the defense
of its mandatary or agent.
112. Legal action by the Corporation. Where an action, a suit, an
application, a proceeding of a civil, of a criminal or of an
administrative nature or any other legal proceeding is commenced by the
Corporation against one (1) or more of its directors, of its of ricers
or of its representatives for one (1) or more actions, acts or deeds
done in the discharge of their duties, the Corporation may pay
compensation to the directors, to the officers or to the
representatives if it loses its case and if a court of law or a
tribunal so orders. If the Corporation wins its case only in part, the
court of law or the tribunal may determine the amount of the costs or
of the expenses which the Corporation shall assume.
113. Liability insurance. The Corporation may purchase and maintain
insurance for the benefit of its directors, of its officers, its
representatives, of their predecessors as well as of their heirs,
legatees, liquidators or testamentary executors, transferees,
mandataries or agents, legal representatives, successors, assigns or
rightful claimants covering any liability incurred by them by reason of
their acting or having acted as a director, as an officer or as a
representative of the Corporation or, at the request of the latter, of
a body corporate of which the Corporation is or was a shareholder or a
creditor. However, this insurance may cover neither the liability
arising from the failure of the insured to act prudently, diligently,
honestly and faithfully in the best interests of the Corporation, nor
the liability arising from a fault or gross negligence or from a
personal offense severable from the discharge of their duties or the
liability arising from the fact that the insured shall have placed
themselves in a position of conflict of interest between their personal
interest and that of the Corporation.
114. Compensation after end of term of office. The compensation provided for
in the preceding paragraphs may be obtained even after the person has
ceased to hold the office of director, of officer or of representative
of the Corporation or, as the case may be, of a body corporate of which
the Corporation is or was a shareholder or a creditor. In the event of
death, the compensation may be paid to the heirs, legatees, liquidators
or testamentary executors, transferees, mandataries or agents, legal
representatives, successors, assigns or rightful claimants of such
person. Such compensation may also be combined with any other recourse
which the director, the of ricer, the representative, one (1) of his
predecessors as well as his heirs, legatees, liquidators or
testamentary executors, transferees, mandataries or agents, legal
representatives, successors, assigns or rightful claimants may have.
115. Determination of conditions precedent to compensation. In the event
that a court of law or a tribunal has not made a finding on the matter,
the compliance or the non-compliance of the conduct of a director, of
an officer or of a representative with the
standards of conduct set out in paragraph 110 above, or the question of
whether a case was won in part or whether a person was substantially
successful on the merits in his defense of the action, of the suit, of
the application or of the legal proceeding shall be determined in the
following manner: a) by a majority vote of the directors who are not
parties to such action, suit, application or legal proceeding, if a
quorum exists; or b) by way of opinion from an independent legal
counsel if such a quorum of the directors cannot be attained, or, even
if attained, if a quorum of the directors who are not parties to such
action, suit, application or legal proceeding so decides; or, failing
the above, c) by decision of the majority of the shareholders of the
Corporation.
116. Place of action. The powers and the duties of the Corporation with
respect to the compensation of any director, officer or representative
shall apply regardless of the place where the action, the suit, the
application or the legal proceeding shall have been filed.
Section 2. SHAREHOLDERS
A. SECURITIES
117. Allotment and issue of securities. Unless otherwise provided in the
Act, in the articles, in the by-laws or in a unanimous shareholder
agreement, the directors, by way of resolution, may accept
subscriptions for securities, allot or issue securities of the share
capital of the Corporation at such times, on such terms and conditions,
to such persons and for such consideration as they see fit, provided
that no security of the Corporation may be issued before having been
fully paid up either in specie or in property or in services rendered
the fair value of which cannot be less than the amount of money which
the Corporation could have received if the securities had been fully
paid-up in specie or they may otherwise dispose thereof or alienate
them in favour of any person for a consideration which shall not
contravene the Act, the articles, the by-laws or the unanimous
shareholder agreement.
118. Commission. The directors may authorize the Corporation to pay a
reasonable commission to a person in consideration of his purchasing or
agreeing to purchase securities of the Corporation, directly from the
Corporation or from any other person, or of his procuring or agreeing
to procure purchasers for any such securities.
119. Joint shareholders. Where two (2) or more persons are registered as
joint shareholders in the securities' register of the Corporation, any
one (1) of them may give receipts and grant discharges in respect of
any dividends, payments of capital, of interest and/or payment of the
redemption price or other payments with regard to the securities held
jointly. In such cases, the joint shareholder who acts shall be deemed
to have been appointed manager by the other joint shareholder or
shareholders.
120. New shareholder. Any person who, by operation of the Act, by transfer
or by any other means, becomes a shareholder of the Corporation shall
be bound by any notice or document relating thereto, if such notice or
document was duly sent to the name and address of the person from whom
or from which he acquired his title to such securities, prior to the
new shareholder registering the securities.
B. SECURITY CERTIFICATES
121. Right to a certificate. Each shareholder, in his discretion, shall be
entitled either to a security certificate representing the securities
which he holds in the Corporation or to an irrevocable acknowledgement
in writing of his right to obtain a security certificate of the
Corporation, detailing the number, the class and the series of
securities which he holds as
indicated in the securities' register. Such certificate shall be in a
form approved by the directors.
122. Signing of certificates. Certificates representing the securities of
the Corporation shall be signed manually by, or on behalf of, at least
one (1) of the directors or officers of the Corporation or by, or on
behalf of, one (1) of its registration or transfer agents or by a
trustee who shall certify them to be in accordance with a trust
indenture. A handwritten signature shall not be required, however, on a
security certificate representing a demand note which has not been
issued pursuant to a trust indenture, a fractional security, an option
or the right to acquire securities, or scrips.
123. Additional signatures. The directors may determine any additional
signatures which may be required on the certificates representing the
securities of the Corporation. Such signatures may be printed or
mechanically reproduced, even if the signatories have ceased to hold
office.
124. Joint holders. The Corporation shall not be required to issue more than
one (1) certificate in respect of securities held jointly by several
persons. In the event of a jointly-held security, delivery of the
certificate to one (1) of the joint holders shall constitute sufficient
delivery to all.
125. Full copy of text. The Corporation shall provide shareholders, at their
request and free of charge, with a full copy of the text of the rights,
of the privileges, of the conditions and of the restrictions attaching
to each class or series of securities making up the share capital of
the Corporation as well as of the authority of the directors to fix the
rights, the privileges, the conditions and the restrictions of
subsequent series.
126. Fractional securities. If fractional securities are issued, for each
fractional security, the Corporation may issue either a certificate or
bearer scrips entitling one to a full security in exchange for all the
corresponding scrips. Such scrips or certificates shall not be required
to bear a handwritten signature.
127. Evidence. In a legal action with regard to securities, unless
specifically denied in the pleadings, the signatures on the security
certificates or the required endorsements shall be admissible without
the necessity of adducing further evidence.
128. Replacement of certificates. Where a shareholder declares in writing
that a security certificate which he holds has been lost, destroyed or
stolen, and describes the circumstances surrounding the event, the
Corporation shall issue a new certificate in favour of the shareholder,
provided that:
a) the shareholder's request has been made to the Corporation before
the latter has been notified of the acquisition of this
certificate by a purchaser acting in good faith;
b) the shareholder has provided the Corporation with a sufficient
bond; and
c) the shareholder has satisfied any other reasonable requirements
which the directors, the President or the Secretary of the
Corporation may determine.
C TRANSFER OF SECURITIES
129. Securities' and transfer registers. The directors shall determine the
place within the Province of Quebec where the Corporation shall keep a
central register of the securities which it has issued, and failing
such a decision, this register shall be kept at the registered office
of the Corporation. The directors may also determine one (1) or more
places,
within or outside the Province of Quebec, where branch transfer
registers shall or may be kept. The central and branch transfer
registers shall be kept by the Secretary of the Corporation or by the
mandataries or agents designated by the directors.
130. Transfer agents. The directors may appoint as mandataries or agents one
(1) or more transfer agents for the purpose of holding a central
securities' register or, as the case may be, branch transfer registers.
The directors may also pass by-laws concerning such transfers of
securities. The transfer agent shall keep the registers required for
the recording of any transaction of securities. All security
certificates which a transfer agent shall issue after his appointment
shall bear his signature and such certificates shall only be valid if
he countersigns them. The directors shall have the power to remove the
transfer agents whom they have appointed. However, the Corporation
shall be held liable for any injury caused to the transfer agents by
their removal without a serious reason and at an inopportune moment.
131. Transfers of securities. Subject to the Act and to the provisions of
paragraph 136 below, a transfer of securities shall be subject to the
restrictions contained in the articles and in the by-laws of the
Corporation and, as the case may be, in any unanimous shareholder
agreement. All transfers of securities of the share capital of the
Corporation and all details relating thereto shall be recorded in the
central securities' register or in the branch transfer registers of the
Corporation. However, no transfer of securities shall be validly
entered in one (1) of these registers of the Corporation or authorized
to be entered therein unless the certificate representing the
securities to be transferred shall have been returned to the Secretary
of the Corporation for cancellation. The Secretary shall inscribe the
word "cancelled" as well as the date of cancellation on any certificate
returned to him. If no certificate representing the transferred
securities has been issued by the Corporation, an instrument in writing
documenting the power to transfer shall be presented prior to the
registration of the transfer.
132. Lien on a security. If the articles of the Corporation provide that the
securities issued by the latter are subject to a lien registered in the
name of the shareholder for a debt owed by the shareholder to the
Corporation, the directors may refuse to register the transfer of this
security until such debt has been reimbursed.
133. Enforcement of a lien. Any proceeds from the sale of securities carried
out by the directors in order to enforce a lien held by the Corporation
shall be allocated as follows: first, to the payment of costs brought
about by this sale, then, to any amount owing by the shareholder to the
Corporation and, finally, the balance, if any, shall be returned to the
shareholder. Such a sale cannot take place before the debt shall be due
and owing nor before the directors shall have notified the shareholder
or his heirs, legatees, liquidators or testamentary executors,
transferees, mandataries or agents, legal representatives, successors,
assigns or rightful claimants of the fact that the debt has become due,
of the among owing and of their intention to proceed with the sale of
the securities nor before the shareholder in default has neglected to
remedy such default within seven (7) days of the receipt of such
notice.
134. Registration of transfers. Subject to the Act and to the provisions of
paragraph 136 below, no transfer of securities or of warrants shall be
registered in the securities' register of the Corporation unless:
a) the security certificate has been duly endorsed by the proper
person;
b) a reasonable assurance has been given to the effect that the
endorsement is genuine;
c) every act or statute in Canada or in a province or territory of
Canada with respect to the collection of income tax, sales taxes
or charges, duties or fees has been complied with;
d) any restriction on its issue, on its transfer or on the holding
thereof ae authorized by the articles has been complied with; and
e) any lien on the securities as provided for in paragraph 132 above
has been reimbursed.
135. Deceased shareholder. In the event of the death of the holder or of one
(1) of the joint holders of any security of the Corporation, the
Corporation shall neither modify the securities' register or the
transfer register nor pay any dividend or make any other distribution
relating to the security in question unless all the documents which may
be required by the Act shall have been submitted and all reasonable
requirements imposed by the Corporation or by its transfer agents shall
have been satisfied.
136. Effect of registration. Subject to the Act, the Corporation may
consider the registered holder of a security as the only person
eligible to vote, to receive assets, interest, dividends or other
payments and to exercise the other rights and privileges attaching to
this capacity.
D. DIVIDENDS
137. Declaration and payment. Subject to the Act and unless otherwise
provided in a unanimous shareholder agreement and subject to it being
established that the Corporation is or will be able to discharge its
liabilities when due and that the realizable value of its assets will
not be less than the aggregate of its liabilities and of its stated
capital, the directors may declare and pay dividends to the
shareholders according to their respective rights and interests in the
Corporation. The directors shall not be compelled to make any
distribution of the profits of the Corporation; thus they may create a
reserve fund for the payment of dividends or set aside such profits in
whole or in part in order to keep them as a reserve fund of any kind.
Such dividends may be paid in specie, in property or by the issue of
fully paid-up securities of the Corporation.
138. Payment. Unless the holder otherwise indicates, a dividend payable in
specie shall be paid by cheque to the order of the registered holder of
the securities of the class in respect of which a dividend have been
declared and shall be delivered or mailed by prepaid ordinary mail to
such registered holder to or at the address appearing at that time in
the registers of the Corporation. In the case of joint holders, unless
such joint holders otherwise direct, the cheque shall be made payable
to the order of all of such joint holders and be delivered or mailed to
them to or at the address of one (1) of them appearing at that time in
the registers of the Corporation. The mailing of such chequeae
aforesaid, unless the same is not paid upon due presentation, shall
satisfy all claims and discharge the Corporation of its liability for
the dividend to the extent of the amount of the cheque. In the event of
non-receipt of the dividend cheque by the person to whom it was
delivered or mailed ae aforesaid, the Corporation shall issue to such
person a replacement cheque for the same amount on such termsae
determined by the directors.
139. Unclaimed dividend. The right to any dividend unclaimed after a period
of three (3) years from its declaration date shall be lost and the
dividend shall revert to the Corporation.
140. Joint shareholders. Where two (2) or more persons are registered ae
joint shareholders in the Corporate Records Book, each of the
shareholders may grant a valid discharge in
respect of the payment of any dividend. In such a case, the shareholder
who acts shall be deemed to have been appointed manager by the other
joint shareholder or shareholders.
141. Set-off. The directors, in their discretion, may apply, in whole or in
part, any amount of dividend declared payable to a shareholder to set
off any debt owed by the shareholder to the Corporation.
E. NOTICES AND INFORMATION TO SHAREHOLDERS
142. Notices to shareholders. Subject to the provisions of paragraphs 147,
148 and 151 below, the notices or the documents required by the Act, by
its Regulations, by the articles, by the by-laws of the Corporation or
by a unanimous shareholder agreement to be sent to the shareholders may
be sent by registered or by certified mail or delivered in person to
the shareholders, to or at the address indicated at that time in the
Corporate Records Book or in the registers of its transfer agent. Where
two (2) or more persons hold securities jointly, the notices or the
documents shall be sent to one (1) of the persons entered as joint
shareholders in the Corporate Records Book or in the registers of the
transfer agent and this shall constitute sufficient notice with respect
to the other joint shareholder or shareholders unless the joint
shareholders have appointed a manager, in which case Me notices or the
documents shall be sent to the latter. Receipt by a shareholder of a
notice or of a document sent by registered or by certified mail shall
be deemed to have taken place at the time when, according to the
ordinary course of mail delivery, the registered or certified letter
containing such notice or document should have been received. In order
to prove receipt of such notices or documents and the date thereof, it
shall be sufficient that the letter was registered or certified, that
it was properly addressed and that it was deposited at a post office,
as well as the date on which it was so deposited and the time which was
required for its delivery in the ordinary course of mail delivery or,
if the letter was delivered in person, it shall be sufficient to
produce a dated acknowledgement of receipt bearing the signature of the
shareholder.
143. Addresses of shareholders. In addition to the persons referred to in
subsection 51(2) of the Act, the Corporation may consider the holder of
the securities who is registered in the securities' register of the
Corporation ae being the person entitled to receive the notices or the
documents required to be sent to the shareholders. The sending of any
notice or document to such person, in accordance with paragraph 142
above, shall constitute sufficient notice to the heirs, legatees,
liquidators or testamentary executors, transferees, mandataries or
agents, legal representatives, successors, assigns or rightful
claimants of the shareholder. Each shareholder shall provide the
Corporation with an address where the notices or the documents shall be
sent to him or left for him, failing which he shall be deemed to have
waived his right to receive such notices or documents.
144. Untraceable shareholder. The Corporation shall not be obliged to send
the notices or the documents required by the Act, by its Regulations,
by the articles, by the by-laws of the Corporation or by a unanimous
shareholder agreement to be sent to the shareholders where previous
notices or documents have been returned to it on more than three (3)
consecutive occasions, unless the untraceable shareholder has notified
the Corporation in writing of his new address.
145. Notice of record date. The directors may fix in advance, between the
fiftieth (50~) and the twenty first (21~) day preceding the date when a
meeting of the shareholders is to take place, a record date in order to
determine the shareholders eligible to receive notice of such meeting.
Where no record date has been set, the record date in order to
determine the shareholders entitled to receive notice of a meeting of
the shareholders shall be the
eve of the day when such notice is given, at the time of close of
business, or the day of the meeting itself, in the absence of notice.
F. MEETINGS OF THE SHAREHOLDERS
146. Annual meetings. Annual meetings of the shareholders of the Corporation
shall be held no later than eighteen (18) months following the
incorporation of the Corporation and thereafter within fifteen (15)
months following the date of the preceding annual meeting. The
directors shall determine the exact date as well as the time and the
place of any such meeting. The annual meeting of the shareholders shall
convene to take notice of the financial statements of the Corporation
and of the other documents which are required by the Act to be placed
on the agenda of the annual meeting, to elect directors, to appoint one
(1) or more auditors, as the case may be, and to fix, or authorize the
directors to fix, their remuneration, and to decide on any other matter
which may be placed on the agenda. The annual meetings may be called by
the President of the Corporation or by any director in accordance with
paragraph 151.
147. Special meetings. Special meetings of the shareholders of the
Corporation may be called at any time by the Chairman of the Board of
Directors, by the President of the Corporation, by the General Manager
or by two (2) directors.
148. Calling by shareholders. The holders of not less than five per cent
(5%) of the securities issued by the Corporation which carry the right
to vote at the meeting sought to be held may request that the directors
call a meeting for the purposes stated in their request. The request,
which may consist of several documents of like form signed by at least
one (1) of the shareholders, shall state the items on the agenda of the
meeting to be called. It shall be sent to each director and to the
registered office of the Corporation. The directors shall call the
meeting within twenty-one (21) days following receipt of the request in
order to debate the questions referred to therein. The directors,
however, shall not be obliged to call the meeting if the notice of a
record date set pursuant to subsection 134(2) of the Act has been given
in accordance with subsection 134(4) of the Act, if a meeting has
already been called and if notice thereof has been given pursuant to
section 135 of the Act or if the items on the agenda stated in the
request relate to instances described in paragraphs 137(5)b) to e) of
the Act. Should the directors fail to call said meeting within the time
limits prescribed above, any shareholder who signed the request may do
so.
149. Meetings in the Province of Quebec. Subject to the articles or to any
unanimous shareholder agreement, the meetings of the shareholders shall
be held at the registered office of the Corporation or at any other
place in the Province of Quebec designated by the directors. The
meetings may be held validly within the territorial limits of the
Province of Quebec on land, at sea or in the air. Meetings held by way
of written resolutions in lieu of meetings shall be deemed to have been
held in the Province of Quebec at the registered office of the
Corporation.
150. Meetings outside the Province of Quebec. The meetings of the
shareholders, with the unanimous consent of the shareholders entitled
to attend, and to vote at, such meetings, may be held outside the
Province of Quebec if the auditor and all the directors are in
attendance or, in writing, have waived notice of the meeting or if they
have agreed to the holding of the meeting. Where a meeting of the
shareholders is held outside the Province of Quebec, the shareholders
who are not in attendance or represented by proxy and who, in writing,
have waived notice of the calling of the meeting or who have agreed to
the holding of the meeting shall be deemed to have agreed to its being
held at that place outside the Province of Quebec. Any business which
may be transacted at a meeting of the shareholders may be transacted at
such a meeting.
151. Notice of meeting. Notice of the calling of any meeting of the
shareholders shall be sent by letter or by telegram, between the
fiftieth (50~) and the twenty first (21S') day prior to the meeting, to
each shareholder entitled to vote thereat, to each director at his
last-known address indicated in the Corporate Records Book and to the
auditor.
152. Notice to the auditor. The auditor of the Corporation shall be entitled
to notice of any meeting, to attend such meeting at the expense of the
Corporation and to be heard thereat on any issue pertaining to his
duties. The auditor or his predecessors to whom one (1) of the
directors or one (1) shareholder, whether entitled to vote or not,
shall give written notice at least ten (10) days prior to the holding
of such meeting shall attend this meeting at the expense of the
Corporation and answer any questions pertaining to his duties.
153. Contents of notice. The notice of the calling of a meeting of the
shareholders shall contain all the items on the agenda and state their
nature with sufficient detail so as to enable the shareholders to reach
an informed opinion with respect thereto and shall reproduce the text
of any special resolution to be submitted at the meeting. It shall not
be necessary for the notice of an annual meeting to indicate that the
financial statements of the Corporation and the auditor's report shall
be examined and that the renewal of the latter's duties and the
election of the directors shall be addressed at this meeting, but a
copy of the financial statements of the Corporation and of the
auditor's report shall be appended to this notice.
154. Waiver of notice. A meeting of the shareholders may be held validly at
any time and for any purpose without the notice required by the Act, by
its Regulations or by the by-laws, if all the shareholders entitled to
vote at the meeting as well as all the directors and the auditor waive
notice of the meeting in any manner whatsoever. This waiver of the
notice of the meeting may take place before, during or after the
holding of the meeting. Moreover, the attendance of a shareholder, of a
director, of the auditor or of any other person entitled to attend such
meeting shall constitute a waiver on his part of notice of the meeting,
unless he indicates that he is attending for the express purpose of
objecting to the proceedings because, among other reasons, the meeting
was not validly called. The signing, by any of the aforementioned
persons, of a resolution in lieu of a meeting shall also constitute a
waiver of the notice on his part of the calling and of the holding of
an actual meeting.
155. Irregularities. Irregularities affecting the notice of a meeting or the
sending thereof, the accidental omission to give such notice or the
non-receipt of the notice by a shareholder, by a director, by the
auditor or by any other person entitled to attend the meeting in no way
shall affect the validity of a meeting of the shareholders. Moreover,
the accidental failure in the notice of a meeting to refer to one (1)
or more of the matters to be submitted to such meeting, even though
reference thereto is required, shall not prohibit the meeting from
considering this matter unless it is prejudicial to a shareholder or
unless there is a risk of his interests being injured. A certificate
from the Secretary, from an officer or from another duly authorized
representative of the Corporation shall constitute irrebuttable
evidence of the sending of a notice of the meeting to the shareholders
and shall be binding upon each of the shareholders.
156. Persons entitled to attend a meeting. The only persons entitled to
attend a meeting of the shareholders shall be those entitled to vote
thereat, the directors, the auditor of the Corporation and other
persons who, pursuant to the Act, to the articles or to the by-laws of
the Corporation, are entitled or required to attend a meeting of the
shareholders. Any other person may be admitted to a meeting of the
shareholders upon invitation of the chairman of the meeting or if a
majority of the shareholders agrees thereto.
157. Quorum. Subject to the Act, to the articles, to the by-laws of the
Corporation or to a unanimous shareholder agreement, the attendance, in
person or by proxy, of a person holding or representing at least one
(1) security issued by the Corporation and carrying the right to vote
shall constitute a quorum at the meeting for the purpose of choosing a
chairman of the meeting, as the case may be, and of pronouncing the
adjournment of the meeting. For any other purpose, a quorum at a
meeting of the shareholders shall be attained, no matter how many
persons are actually in attendance when, at least fifteen (15) minutes
after the time set for the meeting, the shareholders representing a
majority of the votes are in attendance, in person or represented by
proxy. Where a quorum is attained at the opening of a meeting of the
shareholders, the shareholders attending the meeting in person or
represented by proxy may proceed with the business of the meeting
notwithstanding the fact that the quorum is not maintained throughout
the entire meeting. Where the Corporation only has one (1) shareholder
or where only one (1) holder of a class of securities entitled to vote
attends the meeting, the attendance of this shareholder in person or
represented by proxy shall constitute the quorum at the meeting for any
purpose.
158. Adjournment. A shareholder attending a meeting in person or represented
by proxy and constituting a quorum for the purposes of adjourning a
meeting may adjourn any meeting of the shareholders. The chairman of
the meeting, with the consent of the shareholders attending the meeting
in person or represented by proxy and entitled to vote, may adjourn any
meeting of the shareholders to a specified place, date and time if he
deems it appropriate. Notice of the adjournment of a meeting to a date
less than thirty (30) days later shall be given by an announcement made
before the latter is adjourned. If a meeting of the shareholders is
adjourned one (1) or more times for a total of thirty (30) days or
more, notice of the adjournment of such meeting shall be given in the
same manner as the notice of the original meeting. In the event that a
meeting is held according to the terms of the adjournment, it may
validly consider any matter provided that a quorum is attained. The
persons who constituted the quorum at the original meeting shall not be
required to constitute the quorum at the reconvening of the meeting. If
a quorum is not attained at the reconvening of the meeting, the meeting
shall be deemed to have ended immediately after adjournment thereof.
159. Chairman and secretary. The meetings of the shareholders shall be
chaired by the President of the Corporation or, failing him, by any
Vice-President. The Secretary of the Corporation shall act as the
secretary at meetings of the shareholders. In the absence of these
persons, the shareholders attending the meeting shall designate any
person to act as chairman or secretary of the meeting. It shall not be
necessary to appoint a chairman and a secretary in the event of an
adjournment.
160. Procedure. The chairman of a meeting of the shareholders shall be
responsible for the proper conduct of the meeting, shall submit to the
shareholders the proposals which must be put to a vote and shall
establish reasonable and impartial rules of procedure to be followed,
subject to the Act, to the articles, to any unanimous shareholder
agreement, to the by-laws of the Corporation and to the rules of
procedure usually followed during deliberating assemblies. He shall
decide on any matter including, but without restricting the generality
of the foregoing, issues relating to the validity of proxies. His
decisions shall be final and binding on the shareholders.
161. Resolutions in lieu of meetings. Resolutions in writing, signed by all
the shareholders entitled to vote on these resolutions at meetings of
the shareholders, shall be as valid as if they had been passed at these
meetings. A copy of these resolutions shall be kept with the minutes of
these meetings. However, it shall not be possible to decide by way of
written
resolutions where a director submits a written statement pursuant to
subsection 110(2) of the Act in which he gives the reasons for his
resignation or for his opposition to his removal or to his replacement
or where an auditor submits a written statement pursuant to subsection
168(5) of the Act in which he gives the reasons for his resignation or
for his opposition to his removal, to his replacement or to the
decision not to appoint an auditor.
G. RIGHT OF SHAREHOLDERS TO VOTE
162. General rule. Subject to the articles and to the by-laws of the
Corporation, each shareholder shall be entitled to as many votes as he
has securities which carry a right to vote at meetings of the
shareholders. This right shall belong to the shareholders whose names
appear in the securities' register on the record date, or, if no record
date has been set, on the date of the notice of the meeting or, failing
that, at the time of close of business on the eve of the date of
notice, or, if no notice is given, on the date of the meeting.
163. Joint shareholders. Where two (2) or more persons hold securities
jointly, one (1) of these persons attending a meeting of the
shareholders or duly represented thereat, in the absence of the other
or of the others, shall be entitled to vote with respect to these
securities and, in such a case, shall be deemed to have been appointed
manager by the other joint shareholder or shareholders. However, if
several of these persons attend the meeting in person or represented by
proxy and vote, they shall vote together as one (1) shareholder with
respect to the securities which they hold jointly.
164. Securities held by an administrator of the property of another or by a
trustee. Where a person, in his capacity as administrator of the
property of another or trustee, holds securities for a shareholder,
this person or his proxy holder shall be entitled to vote at any
meeting of the shareholders with respect to the securities so held if
such securities are voting securities.
165. Voting by a show of hands and casting vote. Any question submitted to a
meeting of the shareholders shall be decided by a vote by a show of
hands, unless a ballot is requested or unless the chairman of the
meeting prescribes another voting procedure. Proxy holders may vote by
a show of hands unless they have received contrary instructions. The
chairman of the meeting shall not be entitled to a second or casting
vote in the event of a tie vote. At any meeting, a statement by the
chairman of the meeting to the effect that a resolution has been passed
or defeated unanimously or by a particular majority shall constitute
conclusive evidence thereof without it being necessary to prove the
number or the percentage of votes cast in favour of, or against, the
proposal.
166. Voting on behalf of a body corporate. The Corporation shall permit any
individual authorized by a resolution of the Board of Directors or of
the governing body of a body corporate which is one (1) of the
shareholders of the Corporation to represent the body corporate at
meetings of the shareholders of the Corporation. An individual so
authorized may exercise, on behalf of the body corporate which he
represents, all the powers which such person could exercise if it were
an individual shareholder.
167. Ballot. Voting at a meeting of the shareholders shall be by ballot
where a shareholder or a proxy holder entitled to vote at the meeting
so requests. Each shareholder or proxy holder shall deliver to the
scrutineer of the meeting a ballot on which he has written his name,
that of the shareholder or those of the shareholders which he
represents by proxy, as the case may be, the number of votes which he
is entitled to cast and the manner in which he shall be casting those
votes. A vote by ballot may be requested before or after
any vote by a show of hands. Such request may also be withdrawn before
the ballot is taken. A vote by ballot shall take precedence over a vote
by a show of hands.
168. Scrutineer. The chairman of a meeting of the shareholders may appoint
one (1) or more persons, whether or not they be representatives or
shareholders of the Corporation, to act as scrutineers at any meeting
of the shareholders. Failing such an appointment, the secretary of the
meeting shall act as the scrutineer.
H. PROXIES
169. Proxies. A shareholder entitled to vote at a meeting, by means of a
proxy, may appoint a proxy holder as well as one (1) or more alternate
proxy holders, who need not be shareholders, to attend the meeting and
to act thereat within the limits set out in the proxy. The instrument
in writing appointing a proxy holder shall be signed by the shareholder
or by his mandatory or agent authorized in writing. However, it shall
not be necessary for the instrument in writing to be signed before
witnesses. If the shareholder is a body corporate, any director of the
body corporate may appoint a proxy holder and sign his proxy. A proxy
holder may hold the proxies of several shareholders. A proxy shall be
valid only at the meeting in respect of which it was given as well as
at any reconvening thereof in the event of an adjournment. A proxy may
be general in nature and may be in respect of the exercise of the sum
of the rights attaching to the securities of the holder granting the
proxy.
170. Form of proxy. The instrument in writing appointing a proxy holder may
read as follows:
The undersigned, ........................., shareholder of
......................., hereby appoints ........................., or,
in his absence , as his mandatary or agent for the purpose of attending
the meeting of the shareholders to be held at ................. on the
.............day of 19......... and any reconvening of this meeting, in
the event of an adjournment, and for the purpose of acting on his
behalf with the same authority as if the undersigned had attended in
person the said meeting or its reconvening in the event of an
adjournment.
Dated this .............. day of .................19........
--------------------------
Signature of shareholder
171. Revocation. The instrument appointing a proxy holder shall revoke any
prior instrument appointing another proxy holder. Such an instrument
may be revoked by the filing' at the registered of lice of the
Corporation, before the end of the last juridical or business day
preceding the meeting, or its reconvening in the event of an
adjournment, of an instrument in writing signed by the shareholder or
by his mandatory or agent bearing a written authorization, by the
filing thereof with the chairman of the meeting on the day of the
meeting, or upon reconvening thereof in the event of an adjournment, or
in any other manner permitted by law.
172. Filing of proxies. The directors may pass a by-law designating a place,
other than that where a meeting of shareholders, or a reconvening
thereof in the event of an adjournment, is to be held, where proxies
shall be filed before the holding of the meeting. Such by-law may
provide that any proxy so filed may be included in the vote as if it
had been tendered at the meeting, or at a reconvening thereof in the
event of an adjournment, and the votes cast in accordance with this
by-law shall be valid and counted. Subject to the passage of such
by-law, the chairman of any meeting of the shareholders, in his sole
discretion, may decide to accept as valid a written communication sent
by telegram, by cable, by telex or by any other means with respect to
the authorization of any person who claims to represent, and to vote in
the name of, a shareholder, notwithstanding the fact that no proxy
granting such authority has been filed with the Corporation. Any vote
cast following the acceptance of such communication shall be valid and
counted.
173. Deadline for filing. The directors, in the notice of the calling of a
meeting of the shareholders, may specify a deadline for granting a
proxy to a mandatory or to an agent, which, excluding any non-judicial
days or holidays, may not precede by more than forty-eight (48) hours
the date of opening of the meeting, or of a reconvening thereof in the
event of an adjournment.
174. Soliciting proxies. If the Corporation has fifteen (15) or more
shareholders, joint holders of one (1) security being counted as a
single shareholder, when giving notice of the meeting to the
shareholders, it shall send them a form of proxy in the prescribed
form. The proxies shall be solicited by way of a proxy circular sent in
the prescribed form, and shall take the form of an appendix to, or of a
separate document sent along with, the notice of the meeting, in case
of solicitation by or on behalf of the management, or, in any other
case, by any dissident who shall state therein the purpose of the
solicitation. A copy of this circular shall be sent to the Director
along with a notice of the meeting. A person who is appointed proxy
holder after having solicited a proxy shall attend in person the
meeting in question, or cause an alternate proxy holder to represent
him at the meeting, and shall comply with the instructions of the
shareholder who appointed him. He shall have the same rights as the
shareholder who appointed him in respect of his participation in the
proceedings and of voting by way of ballot. However, where the proxy
holder has received contrary instructions from his mandator or
principal, he may not take part in a vote by way of a show of hands.
I. AUDITOR OR ACCOUNTANT
175. Appointment of auditor. Subject to the provisions of the Act which
enable one to dispense with the appointment of an auditor and subject
to paragraph 181 below, the shareholders, by way of an ordinary
resolution, at the first annual meeting of the shareholders and at each
subsequent annual meeting, shall appoint an auditor to serve until the
close of the next annual meeting. Failing the appointment of an auditor
at a meeting, the incumbent auditor shall continue to serve until the
appointment of his successor or of his replacement. The shareholders
may also appoint more than one auditor. The directors, in the course of
the organizational proceedings of the Corporation, may appoint an
auditor to serve until the close of the first annual meeting of the
shareholders.
176. Remuneration of auditor. The shareholders shall fix the remuneration of
the auditor or of the auditors unless this power has been delegated to
the directors.
177. Independence of auditor. The auditor shall be independent of the
Corporation, of the affiliates, of the directors and of the officers of
the latter. A person shall be deemed not to be independent if he or his
business partner is a business partner, a director, an officer or an
employee of the Corporation, of an affiliate, of any of the directors,
of the officers or of the employees of the latter, or if he
beneficially owns or controls, directly or indirectly, a material
interest in the securities of the Corporation, of one (1) of its
affiliates, or has been a receiver, a receiver manager, a liquidator or
trustee in bankruptcy of the Corporation or of one (1) of its
affiliates within the two (2) years immediately preceding his proposed
appointment to the position of auditor. The auditor shall resign as
soon as he becomes aware that he no longer qualifies to serve as
auditor unless a court of law otherwise authorizes him to serve.
178. Removal of auditor. The auditor may be removed at any time by the
shareholders of the Corporation at a special meeting. However, the
Corporation shall be liable for any injury caused to the auditor by his
removal without a serious reason and at an inopportune moment. A
vacancy created by the removal of the auditor may be filled by the
shareholders at the meeting at which it was decided to remove him or,
if the vacancy is not so filled by the shareholders, by the directors.
Any other vacancy in the position of auditor shall be filled by the
directors. The person appointed to replace the auditor shall hold the
position for the unexpired term of his predecessor.
179. Opposition by auditor. The auditor shall be entitled to give to the
Corporation reasons in writing for his resignation or for his
opposition to the actions or to the resolutions contemplated with
respect to his removal or to his replacement at the end of his term.
180. End of term of auditor. The term of the auditor shall end upon his
death, his resignation, his removal in accordance with paragraph 178 of
the present by-laws, upon expiry of his term, if he is of unsound mind
and is so found by a court of law in Canada or elsewhere, if he
acquires the status of bankrupt, if he becomes disqualified from
practicing as an auditor in the province where the registered office of
the Corporation is located, upon appointment of his successor or of his
replacement, by the institution of a method of protective supervision
in his respect or by one of the common causes of extinction of
obligations provided for by law. The resignation of the auditor shall
take effect on the date on which written notice of his resignation is
received by the Corporation or on any later date which is specified
therein. However, the auditor shall be liable for any injury caused to
the Corporation by his resignation if he submits it without a serious
reason and at an inopportune moment.
181. Accountant. If the shareholders of the Corporation decide not to
appoint an auditor by way of a resolution passed unanimously by all the
shareholders, including those not otherwise entitled to vote, the
directors may appoint an accountant to prepare the financial statements
of the Corporation and to discharge such other duties as they may
determine. The directors shall also fix the remuneration of the
accountant without having to pass a resolution to this end and they
shall fill any vacancy which may occur in the position of the
accountant.
182. End of term of accountant. The term of the accountant shall end upon
his death, his resignation, his removal by the directors, upon expiry
of his term, if he is of unsound mind and is so found by a court of law
in Canada or elsewhere, if he acquires the status of bankrupt, if he
becomes disqualified from practicing as an accountant in the province
where the registered office of the Corporation is located, upon
appointment of his successor or of his replacement, by the institution
of a method of protective supervision in his respect or by one of the
common causes of extinction of obligations provided for by law. The
resignation of the accountant shall take effect on the date on which
written notice of his resignation is received by the Corporation or on
any later date which is specified therein. However, the accountant
shall be liable for any injury caused to the Corporation by his
resignation if he submits it without a serious reason and at an
inopportune moment.
183. Audit Committee. The directors may create an Audit Committee made up of
not less than three (3) directors of the Corporation, a majority of
whom shall be made up of persons who are neither officers nor employees
of the Corporation or of bodies corporate which are shareholders of the
Corporation and which control it. If the Corporation issues
securities by way of a distribution to the public, it shall create such
an Audit Committee unless it has been dispensed of this duty by the
Director. Each member of the Audit Committee shall hold office until he
is replaced by the directors or, as the case may be, until he ceases to
be a director. The directors may fill any vacancy on the Audit
Committee.
184. Duty of Audit Committee. The Audit Committee shall review the financial
statements of the Corporation before their approval according to the
Act. It shall also receive notification of any errors or misstatements
contained in financial statements of the Corporation which have been
the subject of a report by the auditor or by one (1) of his
predecessors. Any director or officer of the Corporation shall notify
the Audit Committee forthwith of any errors or misstatements of which
he becomes aware in financial statements which have been the subject of
a report by the auditor or by one (1) of his predecessors.
185. Meetings of Audit Committee. Meetings of the Audit Committee shall be
subject, with all necessary changes, to the rules and to the procedures
which govern the meetings of the Board of Directors.
PART III CORPORATION WITH SOLE DIRECTOR OR SOLE SHAREHOLDER
Section 1. REPRESENTATION OF THE CORPORATION
186. Representative bodies. The Corporation shall act through its
representative bodies: the Board of Directors, the officers, the
meeting of the shareholders and its other representatives. These bodies
shall represent the Corporation within the limits of the powers granted
to them by virtue of the Act, of its Regulations, of the articles, of a
written declaration of the sole shareholder or of a unanimous
shareholder agreement or of the present by-laws. The Board of Directors
may be designated by any other name in any document issued by the
Corporation.
Section 2. SOLE DIRECTOR AND OFFICER
A. SOLE DIRECTOR
187. Composition of the Board of Directors. The Board of Directors shall be
made up of one (1) sole director.
188. Mandatary or agent. The sole director shall be considered to be a
mandatory or an agent of the Corporation. He shall have the powers and
the duties set out in the Act, in its Regulations, in the articles, in
a written declaration of the sole shareholder or in a unanimous
shareholder agreement and in the present by-laws as well as those which
are inherent in the nature of his office. In the course of discharging
his duties, he shall respect the duties with which he is charged under
the Act, the articles, a written declaration of the sole shareholder or
a unanimous shareholder agreement and the present by-laws and he shall
act within the limits of the powers granted to him.
189. Qualifications. Subject to the articles, to a written declaration of
the sole shareholder or to a unanimous agreement, a person need not be
a shareholder in order to become a director of the Corporation.
Moreover, any natural person may be a director except for a person who
is under eighteen (18) years of age, a person who is of unsound mind
and has been so found by a court of law in Canada or elsewhere, a
person who has the status of bankrupt or a person who has been barred
by a court of law from holding such an office.
190. Acceptance of office. The sole director may accept his office expressly
by signing an Acceptance of Office form to this end. Furthermore, his
acceptance may be made tacitly and, in such a case, it may be inferred
from the actions, from the acts, from the deeds and even from the
silence of the sole director.
191. Term of office. Unless otherwise decided by the sole shareholder or by
the shareholders, the sole director shall hold office for a term of one
(1) year or until his successor or his replacement shall have been
appointed or elected, unless the term of office of the sole director
ends prematurely. Subject to the Act and to the articles, the sole
director may resign from office and be replaced by another director in
the same resolution. Such resignation, however, shall not relieve the
sole director of the obligation of paying any debt owing to the
Corporation before his resignation became effective. The sole director
shall be liable for any injury caused to the Corporation by his
resignation if he submits it without a serious reason and at an
inopportune moment. However, the sole director shall be entitled to the
remuneration which he has earned until the date of his resignation.
192. Powers. The sole director shall supervise the management and carry on
the business and the affairs of the Corporation and he may execute, in
the name of the latter, contracts of any kind which are allowed by law.
Generally speaking, he shall exercise all the powers and duties of the
Corporation and perform all the actions, the acts or the deeds within
the limits of the powers of the latter, except those which the Act, a
written declaration of the sole shareholder or a unanimous shareholder
agreement expressly reserve for the sole shareholder or for the
shareholders. In particular, the sole director shall be expressly
authorized to lease, to purchase or otherwise to acquire or to sell, to
exchange, to hypothecate or to mortgage, to pledge or otherwise to
dispose of the movable or immovable property or personal or real
property, presently held or after-acquired, of the Corporation. He may
perform any other action, act or deed which is useful or necessary in
the interests of the Corporation. Finally, the sole director may pass
resolutions with respect to the reserved powers and a copy of these
resolutions shall be kept in the Corporate Records Book.
193. Duties. The sole director of the Corporation, in the exercise of his
powers and in the discharge of his duties, shall act prudently,
diligently, honestly and faithfully in the best interests of the
Corporation and avoid placing himself in a position of conflict of
interest between his personal interest and that of the Corporation.
Moreover, the sole director of the Corporation shall comply with the
Act, with its Regulations, with the articles, with the by-laws of the
Corporation, with any written declaration of the sole shareholder or
with any unanimous shareholder agreement of the Corporation. In
arriving at a decision, he may rely in good faith on the opinion or on
the report of an expert and, in such a case, shall be deemed to have
acted prudently, diligently, honestly and faithfully in the best
interests of the Corporation.
194. Gifts inter vivos. The sole director may make gifts inter vivos of the
assets of the Corporation, even for a substantial value, without having
to obtain the consent of the sole shareholder or of the shareholders,
provided that such gifts shall be made in the best interests of the
Corporation.
195. Remuneration and expenses. The sole director may fix his own
remuneration without having to pass a resolution to this end. Unless
otherwise provided, such remuneration shall be in addition to any other
remuneration paid to him in another capacity. The sole director may
receive advances and shall be entitled to be reimbursed for all
expenses incurred in the execution of his office except for those
incurred as a result of his own fault.
196. Conflict of interest. The sole director who is a party to a material
contract or to a proposed material contract with the Corporation, or
who is a director of, or has a material interest in, any person which
is a party to or a material contract or to a proposed material contract
with the Corporation shall disclose the nature and the extent of his
interest at the time and in the manner provided for by the Act. Any
such contract or proposed contract shall be submitted to the sole
shareholder or to the shareholders for approval even if the contract is
one which, in the ordinary course of the business of the Corporation,
would not require the approval of the sole shareholder or of the
shareholders. By accepting his office, the sole director shall be
deemed to have given a general notice to the Corporation and to the
sole shareholder or to the shareholders, disclosing his interest in any
contract with regard to his remuneration, to his compensation and to
any insurance relating thereto. This provision shall be a sufficient
disclosure in accordance with subsection 120(6) of the Act.
197. By-laws. Unless otherwise provided in the articles, in the by-laws of
the Corporation, in a written declaration of the sole shareholder or in
a unanimous shareholder agreement, the sole director, by way of
resolution, may pass, amend or repeal any by-law governing the business
and the affairs of the Corporation. By-laws passed, amended or repealed
by the sole director according to the above shall be submitted to the
sole shareholder or to the shareholders at the following meeting.
By-laws passed, amended or repealed by the sole director shall take
effect on the date of their passage, of their amendment or of their
repeal by the sole director. After confirmation or amendment by the
sole shareholder or by the shareholders, they shall continue in force
in their original or amended state, as the case may be. However, they
shall cease to have effect following their rejection by the sole
shareholder or by the shareholders or, in the event of failure by the
sole director to submit them to the sole shareholder or to the
shareholders at the meeting following their passage. Furthermore, in
the event of a rejection by the sole shareholder or by the shareholders
of a by-law or of a failure by the sole director to submit this by-law
to the sole shareholder or to the meeting of the shareholders, any
subsequent resolution by the sole director to the same general effect
cannot come into force until after confirmation by the sole shareholder
or by the shareholders.
198. End of term of office. The term of office of the Corporation shall end
in the event of his death, of his resignation, of his removal from
office or ipso facto if he no longer qualifies as a director, upon
expiry of his term of office, by the institution of a method of
protective supervision in his respect or by one of the common causes of
extinction of obligations provided for by law. The term of office of
the sole director shall also end in the event of the bankruptcy of the
Corporation.
B. OFFICERS AND REPRESENTATIVES
199. Mandataries or agents. The officers and the representatives shall be
considered to be mandataries or agents of the Corporation. They shall
have the powers and the duties set out in the Act, in its Regulations,
in the articles and in the present by-laws as well as those which are
inherent in the nature of their office.. In the course of discharging
their duties, they shall respect the duties with which they are charged
under the Act, its Regulations, -the articles and the present by-laws
and they shall act within the limits of the powers granted to them.
200. Appointment and cumulative duties. The sole director shall hold the
offices of President and of Secretary of the Corporation. He may also
create any other office and appoint thereto qualified persons, whether
they be shareholders of the Corporation or not, to represent the
Corporation and to discharge the duties which he determines. The
officers or the representatives may delegate the powers which they have
received from
the sole director as well as those which are inherent in their office..
However, they shall select their substitutes carefully and provide them
with appropriate instructions.
201. Term of office. The term of office of the officers and of the
representatives of the Corporation shall begin with their acceptance of
the office and such acceptance may be inferred from their actions, from
their acts or from their deeds. Their term of office shall continue
until their successors or their replacements shall have been appointed
by the sole director unless their term of office in accordance with
paragraphs 211 to 213 of the present by-laws.
202. Remuneration. The sole director shall fix the remuneration of the
officers or of the representatives of the Corporation without having to
pass a resolution to this end. Unless otherwise provided, such
remuneration shall be in addition to any other remuneration paid to the
officer or to the representative in another capacity by the
Corporation. The fact that any officer, representative or employee
shall also be the sole director or the sole shareholder or a
shareholder of the Corporation shall not disqualify him from receiving,
in his capacity as officer, representative or employee, such
remuneration as may be determined.
203. Powers. Subject to the articles, to the by-laws, to a written
declaration of the sole shareholder or to a unanimous shareholder
agreement, the sole director shall determine the powers of the officers
and of the representatives of the Corporation. The sole director may
delegate to them all his powers except the reserved powers or those
which require the approval of the sole shareholder or of the
shareholders. The officers and the representatives shall have the
powers inherent in the Act or which normally relate to their office..
Furthermore, they may exercise these powers either within or outside
the Province of Quebec.
204. Duties. The officers and the representatives, in the discharge of their
duties, shall act prudently, diligently, honestly and faithfully in the
best interests of the Corporation and within the limits of their
respective offices and they shall avoid placing themselves in a
position of conflict of interest between their personal interest and
that of the Corporation. They shall be deemed to have acted within the
limits of their offices when they discharge their duties in a manner
which is more advantageous for the Corporation. They shall be held
liable to the Corporation for actions, acts or deeds performed alone
which they were only authorized to carry out in conjunction with one
(1) or more other persons unless they acted in a manner which turned
out to be more advantageous for the Corporation than that which had
been agreed upon. In arriving at a decision, they may rely in good
faith on the opinion or on the report of an expert and, in such a case,
shall be deemed to have acted prudently, diligently, honestly and
faithfully in the best interests of the Corporation.
205. Posting of security bond. The sole director or any person designated by
him may require that certain officers, representatives or employees of
the Corporation post a security bond, in such form and containing such
guarantees as the sole director may determine, in order to guarantee
the proper performance of their powers and discharge of their duties.
206. Conflict of interest. Any officer or representative shall avoid placing
himself in a position of conflict of interest between his personal
interest and that of the Corporation and he shall declare or disclose
any conflict of interest to the sole director. The rules governing
conflicts of interest of the sole director shall apply, with all
necessary changes, to the officers and to the representatives.
207. Signing of documents. Contracts, documents or instruments in writing
requiring the signature of the Corporation may be signed by the sole
director in his capacity as President and Secretary of the Corporation
and all contracts, documents or instruments in writing so signed shall
bind the Corporation without the necessity of any other authorization
or formality. The sole director may also authorize any other person to
sign and to deliver on behalf of the Corporation all contracts,
documents or instruments in writing and such authorization may be given
by way of resolution in general or in specific terms. Subject to the
Act, the sole director may permit the contracts, documents or
instruments in writing which are issued by the Corporation to bear
mechanicallyreproduced signatures.
208. Signing of declarations to be deposited in the Register. The
declarations which are to be filed with the Inspector General pursuant
to An Act respecting the legal publicity of sole proprietorships may be
signed by the sole director in his capacity as President of the
Corporation or by any person designated by the sole director.
209. Legal or other proceedings. The sole director in his capacity as
President of the Corporation or any other person authorized by the sole
director shall be respectively authorized to commence any action, suit,
application, proceeding of a civil, of a criminal or of an
administrative nature or any other legal proceeding on behalf of the
Corporation or to appear and to answer for the Corporation with respect
to any writ, order or injunction, issued by any court of law or by any
tribunal, with respect to any interrogatories upon articulated facts or
examinations for discovery, and with respect to any other action, suit,
application or other legal proceeding in which the Corporation shall be
involved; to answer in the name of the Corporation with respect to any
seizure by garnishment in which the Corporation shall be garnishee and
to make any affidavit or sworn declaration relating to such garnishment
or to any other legal proceeding to which the Corporation shall be made
a party; to make demands or requests for assignment of property or
applications or petitions for winding-up or liquidation or
sequestration or receivership orders against any debtor of the
Corporation; to attend, and to vote at, any meeting of the creditors or
of the debtors of the Corporation; to grant proxies and to take, with
respect to such actions, suits, applications or other legal
proceedings, any other action, act or deed or to make any other
decision deemed to be in the best interests of the Corporation.
210. Prima facie evidence of by-law. A copy of a by-law of the Corporation
to which the seal of the Corporation has been affixed and which
purports to have been signed by the President and Secretary of the
Corporation shall be admissible ae against the sole shareholder or
against any shareholder of the Corporation ae being, in itself, prima
facie evidence of the by-law.
211. Resignation. Any officer may resign from office by forwarding a letter
of resignation to the registered office of the Corporation by courier
or by registered or certified mail. The resignation shall become
effective upon receipt of the letter of resignation by the Corporation
or at any later date specified therein. The resignation of an of ricer
or of a representative may only take place subject to the provisions of
any existing employment contract between him and the Corporation. The
resignation shall not relieve the officer or the representative of the
obligation of paying any debt owing by him to the Corporation before
his resignation became effective. The officer or the representative
shall be liable for any injury caused to the Corporation by his
resignation if he submits it without a serious reason and at an
inopportune moment.
212. Removal from office. The sole director may remove from office any
officer or representative of the Corporation and may choose the
successor or the replacement of
such person. Nevertheless, the removal from office of an officer or of
a representative may only take place subject to the provisions of any
existing employment contract between him and the Corporation. However,
the Corporation shall be liable for any injury caused to the officer or
to the representative by his removal from of lice without a serious
reason and at an inopportune moment.
213. End of term of office. The term of office of an of ricer or of a
representative shall end upon his death, his resignation, his removal
from office, upon expiry of his term of office as officer or
representative, if he is of unsound mind and is so found by a court of
law in Canada or elsewhere, if he acquires the status of bankrupt, upon
appointment of his successor or of his replacement, by the institution
of a method of protective supervision in his respect or by one of the
common causes of extinction of obligations provided for by law.
C. PROTECTION OF THE SOLE DIRECTOR, OF THE OFFICERS AND OF
THE REPRESENTATIVES
214. Exclusion of liability vis-a-vis the Corporation and third parties.
Except as otherwise provided in the Act or in by-laws of the
Corporation, the sole director or an officer acting or having acted for
or in the name of the Corporation shall not be held liable, in this
capacity or in their capacity as mandataries or agents of the latter,
whether it be vis-a-vis the Corporation or third parties, for the
actions, the acts or the deeds, the things done or allowed to be done,
the omissions, the decisions made or not made, the liabilities, the
undertakings, the payments made, the receipts given or the discharges
granted, the negligence or the faults of any officer, employee, servant
or representative of the Corporation. Among other things, the sole
director or an officer shall not be held liable vis-a-vis the
Corporation for any direct or indirect loss suffered by the latter for
any reason whatsoever; more specifically, they shall not be held liable
either for the insufficiency or the deficiency of title to any property
acquired by the Corporation, or for or on its behalf, or for the
insufficiency or the deficiency of any security or debt instrument in
or by which any of the funds or of the assets of the Corporation shall
be or have been placed or invested or yet for any loss or damage
resulting from the bankruptcy, from the insolvency or from the
delictual or tortious action, act or deed of any person, including any
person with whom or with which funds, securities, assets or negotiable
instruments shall be or have been placed or deposited. Furthermore, the
sole director or the officers shall not be held liable vis-a-vis the
Corporation for any loss, conversion of property, misappropriation,
embezzlement or any other damage resulting from any dealings with
respect to any funds, assets or securities or for any other loss,
damage or misfortune whatsoever which may occur in the discharge of, or
in relation to the discharge of, their duties unless the same shall
occur owing to their failure to discharge the duties of their office
prudently, diligently, honestly and faithfully in the best interests of
the Corporation or owing to the fact that the sole director or the
officers shall have placed themselves in a position of conflict of
interest between their personal interest and that of the Corporation.
None of the above shall be interpreted in such a way as to relieve the
sole director or an officer of their duty to act in accordance with the
Act and with its Regulations or of their joint or several liability for
any breach thereof, in particular in the event of a breach of the
specific provisions of the Act or of its Regulations. Moreover, the
sole director or the officers shall not be held individually or
personally liable vis-a-vis third parties for the duration of their
term of office in respect of a contract, a decision made, an
undertaking or a transaction, whether or not concluded, or with respect
to bills of exchange, to promissory notes or to cheques drawn, accepted
or endorsed, to the extent that they are acting or they acted in the
name, or on behalf, of the Corporation, in the ordinary course of the
performance of the powers which they have received, unless they acted
prior to the incorporation of the Corporation and unless their
actions, their acts or their deeds have not been ratified by the
Corporation within the time limit prescribed by the Act after its
incorporation.
215. Right to compensation. The Corporation shall compensate the sole
director, its officers or its representatives in respect of all costs
or expenses reasonably incurred by them in connection with the defense
of an action, a suit, an application, a proceeding of a civil, of a
criminal or of an administrative nature or of any other legal
proceeding to which one (1) or more of them were parties by reason of
their duties or of their office, whether this action, this suit, this
application or this legal proceeding was commenced by or on behalf of
the Corporation or by a third party. Reasonable costs or expenses shall
include, in particular, all damages or fines arising from the actions,
from the acts or from the deeds done by the sole director, by the
officers or by the representatives in the discharge of their duties as
well as all amounts paid to settle an action or to satisfy a judgment.
The right to compensation shall exist only to the extent that the sole
director, the officers or the representatives were substantially
successful on the merits in their defense of the action, of the suit,
of the application or of the legal proceeding, that they acted
prudently, diligently, honestly and faithfully in the best interests of
the Corporation, that they did not place themselves in a position of
conflict of interest between their personal interest and that of the
Corporation, and, in the case of an action, of a suit, of an
application or of a proceeding of a criminal or of an administrative
nature leading to the imposition of a fine, to the extent that they had
reasonable grounds for believing that their conduct was lawful or to
the extent that they were acquitted or freed. The Corporation shall
assume these liabilities in respect of any person who acts or acted at
its request as a director, as an officer or as a representative of a
body corporate of which the Corporation is or was a shareholder or a
creditor. As the case may be, this compensation shall be paid to the
heirs, legatees, liquidators or testamentary executors, transferees,
mandataries or agents, legal representatives, successors, assigns or
rightful claimants of the sole director, of the officers or of the
representatives, in accordance with paragraph 219 below.
216. Legal action by third party. Where an action, a suit, an application, a
proceeding of a civil, of a criminal or of an administrative nature or
any other legal proceeding is commenced by a third party against the
sole director or against one (1) or more of the officers or
representatives of the Corporation for one (1) or more actions, acts or
deeds done in the discharge of their duties, the Corporation shall
assume the defense of its mandatory or agent.
217. Legal action by the Corporation. Where an action, a suit, an
application, a proceeding of a civil, of a criminal or of an
administrative nature or any other legal proceeding is commenced by the
Corporation against the sole director or against one (1) or more of the
officers or representatives of the Corporation for one (1) or more
actions, acts or deeds done in the discharge of their duties, the
Corporation may pay compensation to the sole director, to the officers
or to the representatives if it loses its case and if a court of law or
a tribunal so decides. If the Corporation wins its case only in part,
the court of law or the tribunal may determine the amount of the costs
or of the expenses which the Corporation shall assume.
218. Liability insurance. The Corporation may purchase and maintain
insurance for the benefit of the sole director, of its officers, of its
representatives, of their predecessors as well as of their heirs,
legatees, liquidators or testamentary executors, transferees,
mandataries or agents, legal representatives, successors, assigns or
rightful claimants covering any liability incurred by them by reason of
their acting or having acted as sole director, as an officer or as a
representative of the Corporation or, at the request of the latter, as
a director, as an officer or as a representative of a body corporate of
which the Corporation is or was a shareholder or a creditor. However,
this insurance may cover
neither the liability arising from the failure of the insured to act
prudently, diligently, honestly and faithfully in the best interests of
the Corporation, nor the liability arising from a fault or gross
negligence or from a personal offence severable from the discharge of
their duties or the liability arising from the fact that the insured
shall have placed themselves in a position of conflict of interest
between their personal interest and that of the Corporation.
219. Compensation after end of term of office. The compensation provided for
in the preceding paragraphs may be obtained even after the person has
ceased to hold the office of sole director, of officer of
representative of the Corporation or, as the case may be, of director,
of officer or of representative of a body corporate of which the
Corporation is or was a shareholder or a creditor. In the event of
death, the compensation may be paid to the heirs, legatees, liquidators
or testamentary executors, transferees, mandataries or agents, legal
representatives, successors, assigns or rightful claimants of such
person. Such compensation may also be combined with any other recourse
which the sole director, the officer, the representative, one (1) of
his predecessors as well as his heirs, legatees, liquidators or
testamentary executors, transferees, mandataries or agents, legal
representatives, successors, assigns or rightful claimants may have.
220. Determination of conditions precedent to compensation. In the event
that a court of law or a tribunal has not made a finding on the matter,
the compliance or the non-compliance of the conduct of the sole
director, of an officer or of a representative with the standards of
conduct set out in paragraph 215 above or the question whether a case
was won in part or whether a person was substantially successful on the
merits in his defense of the action, of the suit, of the application or
of the legal proceeding shall be determined in the following manner: a)
by way of opinion from an independent legal counsel; or b) by decision
of the majority of the shareholders of the Corporation where there is
more than one shareholder; or, failing that, c) by decision of the sole
shareholder, to the extent that he and the sole director are not the
same person.
221. Place of action. The powers and the duties of the Corporation with
respect to the compensation of the sole director, of an officer or of a
representative shall apply regardless of the place where the action,
the suit, the application or the legal proceeding shall have been
filed.
D. BANKING OR FINANCE
222. Banking or finance. The banking or financial operations of the
Corporation shall be carried on with the banks or with the financial
institutions designated by the sole director. The sole director shall
also designate one (1) or more persons to carry out these banking or
financial operations on behalf of the Corporation.
223. Financial year. The date of the end of the financial year of the
Corporation shall be determined by the sole director.
224. Auditor. Subject to the provisions of the Act which enable one to
dispense with the appointment of an auditor and subject to paragraph
228 below, the sole shareholder or the shareholders, by way of an
ordinary resolution, at the time of the signing of the resolution in
lieu of the first annual meeting of the shareholders or at the first
annual meeting of the shareholders and at the time of the signing of
the resolution in lieu of each subsequent annual meeting or at each
subsequent annual meeting, shall appoint an auditor or decide not to
appoint one. If the sole shareholder or the shareholders appoint an
auditor, the latter shall serve until the signing of the resolution in
lieu of the next annual meeting or until the close of the next annual
meeting. Failing the appointment of
an auditor at the time of the signing of the resolution in lieu of an
annual meeting or at an annual meeting, the incumbent auditor shall
continue to serve until the appointment of his successor or of his
replacement. The sole shareholder or the shareholders may also appoint
more than one auditor. The sole shareholder or the shareholders shall
fix the remuneration of the auditor or of the auditors unless this
power has been delegated to the sole director. The sole director, in
the course of the organizational proceedings of the Corporation, may
appoint an auditor to serve until the signing of the resolution in lieu
of the first annual meeting of the shareholders or until the close of
the first annual meeting of the shareholders.
225. Removal of auditor. The auditor may be removed at any time by the sole
shareholder or by the shareholders of the Corporation by way of a
resolution or at a special meeting. However, the Corporation shall be
liable for any injury caused to the auditor by his removal without a
serious reason and at an inopportune moment. A vacancy created by the
removal of the auditor may be filled by the sole shareholder or by the
shareholders in the resolution in which, or at the meeting at which, it
was decided to remove him, or if the vacancy is not so filled by the
sole shareholder or by the shareholders, by the sole director. Any
other vacancy in the position of auditor shall be filled by the sole
director. The person appointed to replace the auditor shall hold the
position for the unexpired term of his predecessor.
226. Opposition by auditor. The auditor shall be entitled to give to the
Corporation reasons in writing for his resignation or for his
opposition to the actions or to the resolutions contemplated with
respect to his removal or to his replacement at the end of his term.
227. End of term of auditor. The term of the auditor shall end upon his
death, his resignation, his removal in accordance with paragraph 225 of
the present by-laws, upon expiry of his term, if he is of unsound mind
and is so found by a court of law in Canada or elsewhere, if he
acquires the status of bankrupt, if he becomes disqualified from
practicing as an auditor in the province where the registered office of
the Corporation is located, upon appointment of his successor or of his
replacement, by the institution of a method of protective supervision
in his respect or by one of the common causes of extinction of
obligations provided for by law. The resignation of the auditor shall
take effect on the date on which written notice of his resignation is
received by the Corporation or on any later date which is specified
therein. However, the auditor shall be liable for any injury caused to
the Corporation by his resignation if he submits it without a serious
reason and at an inopportune moment.
228. Accountant. If the sole shareholder or the shareholders decide not to
appoint an auditor by way of a resolution passed by the sole
shareholder or unanimously by all the shareholders, including those not
otherwise entitled to vote, the sole director may appoint an accountant
to prepare the financial statements of the Corporation and to discharge
such other duties as the sole director may determine. The sole director
shall also fix the remuneration of the accountant without having to
pass a resolution to this end and he shall fill any vacancy which may
occur in the position of the accountant.
229. End of term of accountant. The term of the accountant shall end upon
his death, his resignation, his removal by the sole director, upon
expiry of his term, if he is of unsound mind and is so found by a court
of law in Canada or elsewhere, if he acquires the status of bankrupt,
if he becomes disqualified from practicing as an accountant in the
province where the registered office of the Corporation is located,
upon appointment of his successor or of his replacement, by the
institution of a method of protective supervision in his respect or by
one of the common causes of extinction of obligations provided for by
law. The resignation of the accountant shall take effect on the date on
which written
notice of his resignation is received by the Corporation or on any
later date which is specified therein. However, the accountant shall be
liable for any injury caused to the Corporation by his resignation if
he submits it without a serious reason and at an inopportune moment.
Section 3. SOLE SHAREHOLDER
A. SECURITIES AND DIVIDENDS
230. Allotment and issue of securities. Unless otherwise provided in the
Act, in the articles, in the by-laws or in a written declaration of the
sole shareholder, the sole director or the directors shall have
absolute power over the share capital of the Corporation and, in
particular, by way of resolution, they may accept subscriptions for
securities, allot or issue securities of the share capital of the
Corporation at such times, on such terms and conditions, to such
persons and for such consideration as they see fit, provided that no
security of the Corporation may be issued before having been fully
paid-up either in specie or in property or in services rendered the
fair value of which may not be less than the amount of money which the
Corporation could have received if the securities had been fully
paid-up in specie or they may otherwise dispose thereof or alienate
them in favour of any person for a consideration which shall not
contravene the Act, the articles, the by-laws or the written
declaration of the sole shareholder.
231. Security certificates. The sole shareholder, in his discretion, shall
be entitled either to a security certificate representing the
securities which he holds in the Corporation or to an irrevocable
acknowledgement in writing of his right to obtain a security
certificate of the Corporation detailing the number, the class and the
series of securities which he holds as indicated in the securities'
register. The sole director or the directors shall determine the form
and, unless otherwise provided in the Act, the contents of the
certificates representing the securities of the Corporation. These
certificates shall bear the signature of the sole director or of the
directors.
232. Dividends. Subject to the Act and unless otherwise provided in a
written declaration of the sole shareholder and subject to it being
established that the Corporation is or will be able to discharge its
liabilities when due and that the realizable value of its assets will
not be less than the aggregate of its liabilities and of its stated
capital, the sole director or the directors may declare and pay
dividends to the sole shareholder according to his rights and to his
interests in the Corporation. The sole director or the directors shall
not be compelled to make any distribution of the profits of the
Corporation; thus they may create a reserve fund for the payment of
dividends or set aside such profits in whole or in part in order to
keep them as a reserve fund of any kind. Such dividends may be paid in
specie, in property or by the issue of fully paid-up securities of the
Corporation.
B. RESOLUTIONS OF THE SOLE SHAREHOLDER
233. Powers. The sole shareholder shall exercise by himself all the powers
which the Act expressly reserves for the shareholders by passing
resolutions of the sole shareholder. A copy of these resolutions shall
be kept in the Corporate Records Book.
234. Annual and other resolutions. The sole shareholder of the Corporation
shall pass annual resolutions of the sole shareholder in which he shall
approve the financial statements of the Corporation, and, as the case
may be, the report of the auditor, appoint an auditor or decide not to
appoint one, re-elect the sole director or elect directors, fix, or
authorize the sole director or the directors to fix, their
remuneration, and settle any other matter which shall be in his power
to decide. The sole shareholder at any time may also
pass any other resolution of the sole shareholder with respect to any
other matter which he may legally consider.
By-law Number 1 passed this
--------------------------
President and/or Secretary
BY-LAW NUMBER 2
being the
GENERAL BORROWING BY-LAW OF
DECTRON INTERNATIONALE INC.
The following general borrowing by-law of the Corporation, also referred to as
By-law Number 2, which authorizes the sole director or the directors to borrow
money upon the credit of the Corporation, has been passed by a resolution of the
sole director or of the directors and confirmed by a resolution of the sole
shareholder or of the shareholders, in accordance with the Canada Business
Corporations Act.
1. In addition to the powers conferred on the sole director or on the
directors by the articles and without restricting the generality of the
powers conferred on the sole director or on the directors by section
189 of the Canada Business Corporations Act, the sole director or the
directors, if they see fit, and without having to obtain the
authorization of the sole shareholder or of the shareholders, may:
a) borrow money upon the credit of the Corporation;
b) issue or reissue debt obligations, debentures or other
securities of the Corporation and pledge or sell the same at
such price or amount as shall be deemed appropriate;
c) give a guarantee in the name of the Corporation to secure the
performance of the obligation of another person, subject to it
being established that the Corporation is or will be able to
discharge its liabilities when due and that the realizable
value of its assets will not be less than the aggregate of its
liabilities and of its stated capital; and
d) grant a hypothec or a mortgage, even a floating hypothec or
mortgage, on a universality of property, movable or immovable,
present or future, corporeal or incorporeal, of the
Corporation.
2. No provision shall limit or restrict the borrowing power of the
Corporation on bills of exchange or promissory notes made, drawn,
accepted or endorsed by or on behalf of the Corporation.
3. The sole director or the directors, by way of resolution, may delegate
the powers conferred on them by paragraph 1 above to a director, to an
Executive Committee, to a committee of the Board of Directors or to an
officer of the Corporation.
4. The powers hereby conferred should be deemed to be supplementary to,
and not in substitution of, any borrowing powers possessed by the sole
director or by the directors or by the officers of the Corporation
independently of a borrowing by-law.
By-law Number 1 passed this
--------------------------
President and/or Secretary
BY-LAW NUMBER 3
being the
GENERAL BORROWING BY-LAW OF
DECTRON INTERNATIONALE INC.
The following banking by-law, also referred to as By-law Number 3, has been
passed by a resolution of the sole director or of the directors and confirmed by
a resolution of the sole shareholder or of the shareholders, in accordance with
the Canada Business Corporations Act.
BE IT RESOLVED:
1. to authorize the sole director or the directors of the Corporation to
borrow money from a bank or from a financial institution upon the
credit of the Corporation, for the required amounts and by way of
overdraft loan or otherwise;
2. to render binding on the Corporation all promissory notes or other
negotiable instruments, including partial or complete renewals covering
such loans as well as the agreed-upon interest accruing therefrom,
given to the said bank or financial institution and signed in the name
of the Corporation by the officers of the Corporation authorized to
sign these negotiable instruments;
3. to authorize the sole director or the directors to grant a hypothec or
a mortgage, even a floating hypothec or mortgage, on a universality of
property, movable or immovable, present or future, corporeal or
incorporeal, of the Corporation to secure the repayment of the loans
contracted by the Corporation with the bank or with the financial
institution or the performance of any other obligation assumed by the
Corporation vis-a-vis the bank or the financial institution; and to
render binding on the Corporation any hypothec or mortgage so granted
and signed by the officer or by the officers authorized to sign
negotiable instruments on behalf of the Corporation;
4. to have all contracts, deeds, documents, grants and other guarantees
reasonably required by said bank or financial institution or by its
legal advisers, for one (1) of the purposes stated above, executed,
completed, and delivered by the duly authorized officers of the
Corporation; and
5. to have the present by-law remain in force, after confirmation by the
sole shareholder or by the shareholders of the Corporation, until
another by-law repealing it has been confirmed by the sole shareholder
or by the shareholders and until a copy thereof has been delivered to
the said bank or financial institution.
By-law Number 1 passed this
--------------------------
President and/or Secretary