BPI Industries Inc. DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment
No. )
Filed by the Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
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o Preliminary
Proxy Statement |
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
þ Definitive Proxy
Statement |
o Definitive
Additional Materials |
o Soliciting
Material Pursuant to Section 240.14a-12 |
BPI INDUSTRIES INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1) |
Title of each class of securities to which transaction applies: |
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(2) |
Aggregate number of securities to which transaction applies: |
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(3) |
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11 (set
forth the amount on which the filing fee is calculated and state
how it was determined): |
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(4) |
Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing. |
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(1) |
Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
Notice of Special Meeting of Shareholders
and Proxy Statement/Information Circular
TABLE OF CONTENTS
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
The Special Meeting of Shareholders of BPI Industries Inc. will
be held at the Companys headquarters located at 30775
Bainbridge Road, Suite 280, Solon, Ohio at 9:00 A.M. on
Thursday, February 9, 2006. The purpose of the meeting is
to separately approve by special resolution amendments to our
governing documents that would:
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1. change the name of the company to BPI Energy Holdings,
Inc.; |
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2. increase the number of shares of common stock that we
are authorized to issue to 200 million shares; |
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3. increase the quorum necessary to transact business at a
meeting of our shareholders to the holders of
331/3%
of our shares of common stock; and |
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4. permit meetings of our shareholders to be held outside
of British Columbia, Canada. |
Shareholders of record at the close of business on
January 10, 2006 are entitled to notice of and to vote at
the meeting.
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For the Board of Directors |
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James G. Azlein |
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Director, President and Chief Executive Officer |
January 12, 2006
BPI INDUSTRIES INC.
30775 Bainbridge Road, Suite 280
Solon, Ohio 44139
PROXY STATEMENT/INFORMATION CIRCULAR
Dated January 12, 2006
The Board of Directors of BPI Industries Inc. (the
Company) respectfully requests your proxy for use at
the Special Meeting of Shareholders to be held at the
Companys headquarters located at 30775 Bainbridge Road,
Suite 280, Solon, Ohio at 9:00 A.M. on Thursday,
February 9, 2006, and at any adjournments of the meeting.
This proxy statement is to inform you about the matters to be
acted upon at the meeting.
The Companys authorized capital consists of
100,000,000 shares of common stock without par value. As of
January 10, 2006, the record date for determining
shareholders entitled to notice of and to vote at the meeting,
the Company had 64,040,237 shares of common stock issued
and outstanding. Unless otherwise permitted by law, only those
shareholders of record holding common stock on the record date
shall be entitled to vote at the meeting or any adjournment
thereof in person or by proxy. Each shareholder of record
holding common stock on the record date is entitled to one vote
on each matter to be presented at the meeting for each share of
common stock registered in his or her name on the list of
shareholders as of the record date. This list will be available
for inspection during normal business hours at the
Companys transfer agent and at the meeting.
Abstentions and broker non-votes are counted for purposes of
determining a quorum. Since each of the four proposals will
require the approval by two-thirds of the votes cast by holders
of common stock represented in person or by proxy at the
meeting, abstentions and broker non-votes will have the effect
of a vote against the applicable proposal. Shareholders will not
be entitled to dissenters rights with respect to any
matter to be considered at the meeting.
We are mailing this notice of meeting, proxy statement and form
of proxy to shareholders on or about January 13, 2006.
SOLICITATION OF PROXIES
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors and management
of BPI Industries Inc. for use at the Special Meeting of
Shareholders for the purposes set forth in the accompanying
Notice of Special Meeting of Shareholders.
Although the solicitation will be made primarily by mail,
proxies may be solicited personally or by telephone or facsimile
by the regular employees of the Company at nominal cost. The
cost of solicitation will be borne by the Company. In addition,
the Company will request brokers and other custodians, nominees
and fiduciaries to forward proxy-soliciting material to the
beneficial owners of shares held of record by such persons at
the Companys expense.
No person is authorized to give any information or to make any
representations other than those contained in this proxy
statement and, if given or made, such information or
representations should not be relied upon as having been
authorized.
APPOINTMENT OF PROXIES
The persons designated as proxies in the enclosed form of proxy
are nominees selected by the Companys management. A
shareholder has the right to appoint a person to represent and
vote for the shareholder at the meeting other than the persons
designated in the enclosed form of proxy. To exercise this
right, the shareholder should strike out the names of the
persons named in the enclosed form of proxy and insert the name
of the shareholders nominee in the blank space provided,
or complete another proper instrument of proxy. Such other
person need not be a shareholder of the Company.
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A proxy must be signed by the shareholder or by the
shareholders attorney authorized in writing, or, if the
shareholder is a corporation, it must either be under its common
seal or signed by a duly authorized officer. Evidence of the
authority of such attorney or officer, as applicable, must
accompany the proxy.
The completed proxy must be deposited with the Companys
registrar and transfer agent, Pacific Corporate Trust Company,
located at the 10th Floor, 625 Howe Street, Vancouver,
British Columbia, V6C 3B8, or with the Companys registered
office, located at Suite 1600, 609 Granville Street,
Vancouver, British Columbia, V7Y 1C3, at least 48 hours
before the time of the meeting or any adjournment thereof at
which the proxy is to be used, excluding Saturdays, Sundays and
holidays.
VOTING AND EXERCISE OF DISCRETION OF PROXIES
The shares represented by a proxy will be voted or withheld from
voting in accordance with the instructions of the shareholder on
any ballot that may be called for, and if the shareholder
specifies a choice with respect to any matter to be acted upon,
the shares will be voted accordingly. If a proxy is signed
without a preference indicated, those shares will be voted
FOR the approval of each of the four proposed
amendments to our governing documents.
We know of no other matters that will be presented at the
meeting. However, if other matters do properly come before the
meeting, if permitted by applicable law, the persons named in
the form of proxy will vote on these matters in accordance with
their best judgment.
To be adopted, each of the four proposals will require approval
by a special resolution, being at least two-thirds of the votes
cast by holders of common stock represented in person or by
proxy at the meeting. None of the proposals is conditioned on
the approval of any of the other proposals.
REVOCATION OF PROXIES
A shareholder may revoke a proxy on any matter on which it has
not been previously exercised:
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a) by depositing an instrument in writing executed by the
shareholder or the shareholders attorney authorized in
writing, or, if the shareholder is a corporation, it must either
be under its common seal or signed by a duly authorized officer,
with evidence of the authority of such attorney or officer, as
applicable, accompanying the proxy (i) with the transfer
agent or the Companys registered office at any time up to
and including the last business day before the day of the
meeting or any adjournment thereof at which the proxy is to be
used, or (ii) with the Chairman of the meeting at the
scheduled commencement of the meeting or adjournment thereof at
which time the proxy is to be used, or |
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b) in any other manner permitted by law. |
Revocation of proxies may also be done electronically.
Shareholders who wish to revoke proxies electronically are urged
to contact the Companys transfer agent to determine the
availability, and instructions for the use, of this option.
PROPOSED AMENDMENTS TO OUR GOVERNING DOCUMENTS
The four proposals provide for four separate amendments to our
governing documents. The four proposals are being voted upon
separately, and each proposal requires the approval by
two-thirds of the votes cast by holders of common stock
represented in person or by proxy at the meeting. None of the
proposals is conditioned on the approval of any of the other
proposals.
Each of the proposed amendments to our governing documents was
unanimously approved by our Board of Directors. Our Board of
Directors believes that, for the reasons discussed below, each
of the proposed amendments to our governing documents is in the
best interests of the Company and our shareholders. Our Board of
Directors recommends that our shareholders vote in favor of each
of the four proposals.
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Proposal Nos. 1 and 2 would amend our Notice of
Articles. If Proposal Nos. 1 and 2 are approved, we will
file a Notice of Alteration with the British Columbia Registrar
of Corporations, and the Registrar will then issue to us a new
Notice of Articles that includes these proposals.
Proposal Nos. 2 through 4 would amend our Articles of
Incorporation. A copy of our proposed Amended and Restated
Articles of Incorporation, which includes the amendments
proposed by Proposal Nos. 2 through 4, is included in this
proxy statement as Appendix A. We urge you to read the
proposed Amended and Restated Articles of Incorporation in its
entirety.
Proposal No. 1
Change the Name of the Company to BPI Energy Holdings,
Inc.
Proposal No. 1 would amend our Notice of Articles to
change the name of the Company from BPI Industries Inc. to BPI
Energy Holdings, Inc.
The Company was incorporated in 1980. Beginning in 1996, the
Company had a minority involvement in what is now our Delta
Project. In 2001, Methane Management, Inc. acquired the Delta
Project subject to our minority interest. In August 2001, the
Company acquired Methane Management, Inc. and consolidated 100%
of the Delta Project within the Company. James G. Azlein,
President of Methane Management, Inc. at the time, became our
President, and we created a new management team. We have since
divested nearly all of our assets that are not related to CBM
projects in the Illinois Basin.
Since 2001, we enlarged our acreage footprint from
43,000 acres to the 418,435 acres of CBM rights that
we currently control, drilled CBM test and production wells at
the Delta and Montgomery Projects, installed gathering and
production facilities at the Delta Project, and commenced gas
sales from our productive wells at the Delta Project. We are now
engaged exclusively in the acquisition, exploration, development
and production of CBM reserves located in the Illinois Basin.
Our Board of Directors believes that the name BPI Energy
Holdings, Inc. will more appropriately identify the Company with
the industry in which it now operates. Our Board believes that
the name change will attract greater interest in the Company by
potential investors, customers, business partners and other
members of the public, and is therefore in the best interests of
the Company and our shareholders.
Proposal No. 2
Increase the Number of Our Authorized Shares of Common
Stock
Proposal No. 2 would amend our Notice of Articles and
Articles of Incorporation to increase the number of shares of
our common stock that we are authorized to issue to
200 million shares. Our Notice of Articles and Articles of
Incorporation currently authorize the issuance of up to
100 million shares of our common stock.
As of January 10, 2006, the Company has
64,040,237 shares of our common stock outstanding. As of
the same date, 9,349,816 shares of our common stock are
issuable upon the exercise of warrants held by third parties,
and 4,070,612 shares of our common stock are issuable upon
the exercise of options held by our officers, directors,
employees and others. If all of these outstanding warrants and
options are exercised, we would have 77,460,665 shares of
our common stock outstanding. In addition, our Board of
Directors has adopted, and our shareholders approved at our
annual meeting on December 13, 2005, the BPI Industries
Inc. 2005 Omnibus Stock Plan, pursuant to which we may issue
stock options and other equity-based awards for up to
5,000,000 shares of our common stock. Our outstanding
equity is therefore approaching our current limit of
100 million authorized shares of common stock.
The purpose for the increase in the authorized number of shares
of our common stock is to provide the Company with the ability
to issue additional shares in the future in connection with
possible equity financings, strategic transactions and joint
ventures, and equity-based awards to our employees, directors
and consultants. The additional availability of shares would
also allow the Company to facilitate stock splits, stock
dividends and other distributions of common stock to our
shareholders. Having such additional authorized shares
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available would give the Company greater flexibility by
permitting shares to be issued in connection with a particular
transaction without the delay incident to holding a special
meeting of shareholders to increase our authorized shares at
that time. We currently have no plans, understandings or
agreements relating to any equity financing, strategic
transaction or joint venture. We also currently have no plans,
understandings or agreements relating to the issuance of
equity-based awards to our employees, directors and consultants,
other than pursuant to the 2005 Omnibus Stock Plan.
We are not currently generating net income or positive cash flow
from operations, and the amount of CBM gas that we are currently
selling is not significant. Even if we achieve increased
revenues and positive cash flow from operations in the future,
we anticipate increased exploration, development and other
capital expenditures as we continue to explore and develop our
CBM rights. Our capital expenditure budget for the
12-month period ending
April 30, 2006 totals approximately $33 million. This
amount anticipates drilling 147 new wells, including 140 new
production wells at the Delta Project and seven new test wells.
Our revenues and cash balances may not be sufficient to fund our
operations beyond April 30, 2006. Therefore, in order to
achieve our long-term plans and maintain a viable business, we
will need to raise additional financing. This financing could be
in the form of conventional borrowing but also could include the
issuance by us of additional common stock, warrants or other
instruments convertible into shares of our common stock, or
other equity.
Under the rules of the American Stock Exchange, we will be
required to obtain shareholder approval for any transaction in
which we sell shares of our common stock, at a price per share
less than the greater of book value or market value, in an
amount equal to 20% or more of the number of our
then-outstanding shares of common stock. This rule does not
apply to a public offering, which would generally
include a firm commitment underwritten offering of common stock
that is registered with the Securities and Exchange Commission.
We will also be required to obtain shareholder approval if in
connection with an acquisition of the stock or assets of another
company we issue a number of shares of our common stock that
results in an increase in the number of our then-outstanding
shares of common stock by 20% or more. The shareholder approval
required in any of the foregoing transactions will require the
affirmative vote of the holders of a majority of the shares of
our common stock represented in person or by proxy at a meeting
of our shareholders or, in the case of a written action without
a meeting, the affirmative vote of the holders of a majority of
the shares of our common stock entitled to vote on the matter.
Any issuance by the Company of shares of common stock, including
the additional shares that would be authorized if this proposal
is adopted, would dilute the present equity ownership position
of our existing shareholders. Our shareholders do not have the
preemptive right to purchase any shares of our common stock that
we may issue in the future.
Although we currently do not have any specific plans to engage
in any of the transactions or issuances described above, our
Board of Directors believes that the Company should have access
to a sufficient number of authorized shares so that the Company
has the flexibility to consider all of the financing, strategic
and other options that may be available to it at any given time.
Our Board of Directors therefore believes that the proposed
increase in the number of our authorized shares is in the best
interests of the Company and our shareholders.
This proposed amendment appears in Section 2.1 of our proposed
Amended and Restated Articles of Incorporation, which is
included in this proxy statement as Appendix A.
Set forth below is a summary of the material terms of our common
stock and a brief comparison of the shareholders rights that
exist under the laws of British Columbia, where we are
incorporated, and, as an example of shareholder rights in the
United States, the laws of the State of Delaware.
Description of Our Common Stock
The following is a summary of the terms of our common stock. The
rights of the holders of our common stock are defined by our
Articles of Incorporation and the British Columbia Business
Corporations Act. You should refer to those documents and
provisions for more complete information regarding our common
stock.
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Holders of our common stock have one vote per share on all
matters upon which our shareholders are entitled to vote,
including the election of directors. In the election of
directors, holders of our common stock do not have cumulative
voting rights. The holders of our common stock have no
preemptive right to purchase any of our securities or any
securities that are convertible into or exchangeable for any of
our securities. Our common stock is not subject to any
provisions relating to redemption. Our common stock is not by
its terms subject to any restrictions on alienation. Our common
stock has no conversion rights and is not subject to further
calls or assessments by us. All outstanding shares of our common
stock are fully paid and nonassessable.
Holders of our common stock have equal rights to receive
dividends when, as and if declared by our Board of Directors,
out of funds legally available therefor. Holders of our common
stock are entitled, upon the liquidation of the company, to
share ratably in the net assets available for distribution,
subject to the rights, if any, of holders of any preferred stock
then outstanding. We currently have no class of preferred stock
authorized or outstanding. To increase the authorized number of
shares of common stock outstanding or create a class of
preferred stock, the affirmative vote of the holders of
two-thirds of our common stock represented in person or by proxy
at a meeting of our shareholders would be required.
Our common stock is currently traded on the American Stock
Exchange under the symbol BPG.
Comparison of Shareholder Rights Under British Columbia and
Delaware Law
The shareholder rights that exist under the terms of our common
stock and British Columbia law are in some instances different
than what they would be, for example, under the laws of the
State of Delaware, where many U.S. corporations are
incorporated. Although some differences exist between the
corporation laws of the two jurisdictions, we believe that the
differences are not significant.
For example, neither British Columbia law nor Delaware law
requires corporations to provide shareholders with cumulative
voting rights. Neither British Columbia law nor Delaware law
requires corporations to provide shareholders with preemptive
rights to purchase any securities of the corporation. Under both
British Columbia law and Delaware law, shareholders have the
right to dissent from most cash-for-stock mergers of a
corporation and seek an appraisal of the value of their shares.
Under British Columbia law such dissenters rights extend
to the sale of all or substantially all of a corporations
assets, although under Delaware law they do not.
Under both British Columbia law and Delaware law, shareholders
may generally approve corporate matters in a written action
taken without a formal meeting of shareholders. Although
Delaware law does not require that shareholders have the right
to call a special meeting, British Columbia law provides that
one or more shareholders holding at least five percent of the
voting shares of a corporation may cause a shareholders meeting
to be called. Under British Columbia law and our current
Articles of Incorporation, two shareholders entitled to vote at
a meeting and who hold at least five percent of our shares
constitute a quorum for the purpose of transacting business at a
meeting. Under Delaware law, a majority of the shares entitled
to vote, unless the corporations certificate of
incorporation provides for a lower percentage not less than
one-third of the shares entitled to vote, constitute a quorum at
a meeting of shareholders.
Under British Columbia law and our Articles of Incorporation, we
may in general alter our Articles only with the approval of the
holders of two-thirds of our common stock represented in person
or by proxy at a meeting of our shareholders. Delaware law
requires the approval of the holders of at least a majority of
the outstanding stock of a corporation to amend a Delaware
corporations certificate of incorporation. In addition,
under British Columbia law and our Articles of Incorporation,
shareholders that hold at least two-thirds of our common stock
represented in person or by proxy at a meeting of our
shareholders may remove a director before the end of the
directors term of office. Under Delaware law, a director
may generally be removed from office before the end of the
directors term by the holders of a majority of the
corporations outstanding stock.
Under British Columbia law, we may generally not enter into an
amalgamation (which is referred to as a merger in the United
States) or sell all or substantially all of our assets unless
the transaction is approved by the holders of two-thirds of our
common stock represented in person or by proxy at a meeting of
our
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shareholders. Delaware law generally requires the approval of
mergers, consolidations and sales of all or substantially all of
a corporations assets by a majority of the voting power of
the corporation.
Both British Columbia law and Delaware law generally permit
corporations to issue preferred stock or shareholder rights
(also known as a poison pill). A British Columbia or
Delaware corporation may generally issue preferred stock or
shareholder rights that would have the effect of deterring a
takeover attempt, including a takeover attempt that might be in
the best interests of the corporation or its shareholders. We do
not currently have either preferred stock or shareholder rights
outstanding, although our Articles of Incorporation permit us to
issue preferred stock and do not restrict us from issuing
shareholder rights. We currently have no plans to issue any
preferred stock or shareholder rights, but we will be able to do
so at any time in the future.
Investment Canada Act
There is no limitation imposed by the laws of Canada, the laws
of British Columbia or our Articles of Incorporation on the
right of a non-resident to hold or vote our common stock, other
than as provided in the Investment Canada Act, which generally
prohibits a reviewable investment by an entity that is not a
Canadian entity, unless after review the applicable
minister is satisfied that the investment is likely to be of
net benefit to Canada.
An investment in our common stock by a non-Canadian who is not a
WTO investor, at a time when we are not already
controlled by a WTO investor, would be reviewable under the
Investment Canada Act if it is an investment to acquire control
and the value of our assets is CAD$5 million or more.
Regardless of the value of the proposed transaction, an order
for review may be made by the Canadian government if the
investment is related to Canadas cultural heritage or
national identity.
An investment in our common stock by a WTO investor, or by a
non-Canadian at a time when we are already controlled by a WTO
investor, would be reviewable under the Investment Canada Act if
it is an investment to acquire control and the value of our
assets is not less than a specified amount (CAD$250 million
in 2005).
The Investment Canada Act has detailed rules to determine
control. For example, a non-Canadian would acquire control of us
for purposes of the Investment Canada Act if a majority of our
outstanding common stock was acquired; acquisition of less than
a majority but more than one-third of our outstanding common
stock would be a rebuttable presumption of a control acquisition
having occurred. Control also could be deemed to occur through
the acquisition of all or substantially all of our assets.
A WTO investor generally includes governments of, or
individuals who are nationals of, member states of the World
Trade Organization and corporations and other entities that are
controlled by them. The United States and most all of the
principal economies of the world are currently members of the
World Trade Organization.
If any of the thresholds described above is exceeded, an
application for review must be filed with the Investment Review
Division of Industry Canada and/or, if the business is related
to Canadas cultural heritage or national identity, with
the Department of Canadian Heritage. Reviews are undertaken by
the Minister of Industry, the Minister of Cultural Heritage or
both ministers, depending on the nature of the business under
review.
The Investment Canada Act provides for an initial
45-day review period.
The reviewing minister may unilaterally extend the review period
for an additional 30 days and, with the consent of the
proposed investor, for longer periods of time. In reviewing
whether an investment is of net benefit to Canada,
the reviewing minister is directed to take into account the
following factors:
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the effect of the investment on the level and nature of economic
activity in Canada; |
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the degree of involvement by Canadians in the business; |
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the effect of the investment on productivity, industrial
efficiency, technological development, product innovation and
product variety in Canada; |
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the effect of the investment on competition within any industry
in Canada; |
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the compatibility of the investment with national industrial,
economic and cultural policies; and |
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the effect of the investment on Canadas ability to compete
in world markets. |
If none of the thresholds described above are exceeded and no
review is required, a notification may generally still be
required to be filed with Industry Canada and/or the Department
of Canadian Heritage.
Proposal No. 3
Increase the Quorum for Meetings of Shareholders
Proposal No. 3 would amend our Articles of
Incorporation to increase the quorum requirement for a meeting
of our shareholders. Under our current Articles of
Incorporation, two shareholders entitled to vote at a meeting
and who hold at least five percent of our shares constitute a
quorum for the purpose of transacting business at a meeting of
our shareholders. The proposed amendment to our Articles of
Incorporation would raise the quorum requirement to the holders
of
331/3%
of our shares of common stock. At this Special Meeting of
Shareholders, our current quorum requirement will apply.
The rules of the American Stock Exchange require listed
companies to have a quorum requirement no lower than the holders
of
331/3%
of the companys common stock. In connection with listing
our common stock on the Exchange, we are required to raise our
quorum requirement to the minimum quorum permitted by the rules
of the Exchange. We are required to implement this change by
March 13, 2006.
In addition, our Board of Directors believes that it is not
appropriate for a small minority of our shareholders to have the
ability to approve or defeat matters that are presented to a
vote of our shareholders. The increased quorum requirement will
prevent matters from being approved or defeated at a meeting of
our shareholders when as few as only two of our shareholders are
represented at the meeting.
For the foregoing reasons, our Board of Directors believes that
the proposed amendment to our Articles of Incorporation to
increase our quorum requirement is in the best interests of the
Company and our shareholders.
This proposed amendment appears in Section 11.3 of our
proposed Amended and Restated Articles of Incorporation, which
is included in this proxy statement as Appendix A.
Proposal No. 4
Permit Shareholder Meetings to be Held Outside of British
Columbia, Canada
Proposal No. 4 would amend our Articles of
Incorporation to permit meetings of our shareholders to be held
outside of British Columbia, Canada. Currently, since our
Articles of Incorporation are silent on where our shareholder
meetings can be held, under the British Columbia Corporations
Act we cannot hold shareholder meetings outside of British
Columbia without the consent of the British Columbia Registrar
of Corporations.
Although the Company is currently incorporated in British
Columbia, we moved our corporate headquarters from Vancouver,
British Columbia to Solon, Ohio in early 2005. This move was
part of our overall plan to consolidate our operations in the
United States and to have our common stock listed on a U.S.
national securities exchange. We maintain a records office and
registered office in Vancouver, British Columbia. However, our
executive officers are located at our offices in Solon, Ohio,
and our field office is located in Marion, Illinois. All of our
employees are located in either Ohio or Illinois. In addition,
most of our investors are located in the United States.
Our Board of Directors believes that the Company should have the
flexibility to have shareholder meetings at or near the
Companys corporate headquarters in Ohio or the
Companys field office in Illinois or at other places
within or outside of the United States. This flexibility will
allow the Company to hold meetings
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where attendance by our shareholders can be maximized. For these
reasons, our Board believes that this proposed amendment is in
the best interests of the Company and our shareholders.
This proposed amendment appears in Section 10.9 of our proposed
Amended and Restated Articles of Incorporation, which is
included in this proxy statement as Appendix A.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information regarding the
beneficial ownership of our common stock as of January 10,
2006 by (i) each of our executive officers and Directors
and (ii) all of our executive officers and Directors as a
group. The table includes shares underlying options and warrants
held by executive officers and Directors. All of these options
and warrants are currently exercisable. Percentage ownership is
calculated in accordance with
Rule 13d-3 of the
U.S. Securities Exchange Act of 1934, as amended (the
U.S. Exchange Act) based on the total number of
shares outstanding as of January 10, 2006.
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|
| |
James G. Azlein
|
|
|
3,626,658 |
|
|
|
5.48 |
% |
George J. Zilich
|
|
|
965,686 |
|
|
|
1.49 |
% |
Costa Vrisakis
|
|
|
1,943,522 |
|
|
|
3.02 |
% |
William J. Centa
|
|
|
300,000 |
|
|
|
* |
|
Dennis Carlton
|
|
|
300,000 |
|
|
|
* |
|
All Directors and executive officers as a group (5 persons)
|
|
|
7,135,866 |
|
|
|
10.53 |
% |
|
|
* |
Less than 1%. |
|
(1) |
Unless otherwise indicated, beneficial ownership of the shares
held by each individual consists of sole voting power and sole
investment power, or of voting power and investment power that
is shared with the spouse of the individual. |
|
(2) |
Includes the following numbers of shares of common stock
beneficially owned apart from options and warrants:
Mr. Azlein, 1,476,046 shares; Mr. Zilich,
285,686 shares; Mr. Vrisakis, 1,627,522 shares;
Mr. Centa, 0 shares; and Mr. Carlton,
0 shares. |
8
The following table shows information relating to all persons
who, as of January 10, 2006, were known by Directors and
senior officers of the Company to beneficially own more than
five percent of the Companys outstanding common stock. The
table includes shares underlying warrants that are currently
exercisable.
|
|
|
|
|
|
|
|
|
|
|
Number of | |
|
|
|
|
Voting Shares | |
|
Percent | |
Name and Address of Beneficial Owner |
|
Owned | |
|
Ownership | |
|
|
| |
|
| |
James G. Azlein
|
|
|
3,626,658 |
|
|
|
5.48 |
% |
c/o BPI Industries Inc.
30775 Bainbridge Road, Suite 280
Solon, Ohio 44139 |
|
|
|
|
|
|
|
|
Advisory Research, Inc.(1)
|
|
|
9,372,500 |
|
|
|
14.63 |
% |
180 N. Stetson Street, Suite 5500
Chicago, Illinois 60601 |
|
|
|
|
|
|
|
|
Commonwealth Bank of Australia(2)
|
|
|
5,107,100 |
|
|
|
7.69 |
% |
48 Martin Place, Level 2
Sydney, Australia NSW 2000 |
|
|
|
|
|
|
|
|
Wellington Capital Management
|
|
|
6,000,000 |
|
|
|
9.37 |
% |
227 West Monroe Street
Chicago, Illinois 60606 |
|
|
|
|
|
|
|
|
Prudential Financial, Inc.(3)
|
|
|
7,600,000 |
|
|
|
11.65 |
% |
751 Broad Street
Newark, New Jersey 07102 |
|
|
|
|
|
|
|
|
|
|
(1) |
The common stock listed was reported by Advisory Research, Inc.
in a Schedule 13G filed with the Securities and Exchange
Commission on January 11, 2006. |
|
(2) |
The common stock listed was reported on December 15, 2005
in a Schedule 13G filed with the Securities and Exchange
Commission and includes shares beneficially owned by Colonial
First State Investment Group Limited and First State Investment
Management (UK) Limited, each of which was reported to be a
wholly owned subsidiary of Commonwealth Bank of Australia. |
|
(3) |
The common stock listed was reported by Prudential Financial,
Inc. in a Schedule 13G filed with the Securities and
Exchange Commission on January 10, 2006. |
9
EXECUTIVE COMPENSATION
The following disclosure concerning executive compensation has
been prepared in accordance with the requirements of Canadian
Form 51-102F6 Statement of Executive Compensation of
National Instrument
51-102 and the
U.S. Exchange Act. During the fiscal year ended
July 31, 2005, the Company had three named executive
officers (as defined in
Form 51-102F6) as
determined pursuant to Canadian National Instrument
51-102, namely
Mr. James G. Azlein, its President and Chief Executive
Officer, Mr. George J. Zilich, its Chief Financial
Officer, General Counsel and Secretary, and
Mr. Keith A. Ebert, its former Vice President.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Compensation | |
|
Long Term Compensation | |
|
|
|
|
|
|
| |
|
| |
|
|
|
|
|
|
|
|
Awards | |
|
Payouts | |
|
|
|
|
|
|
|
|
| |
|
| |
|
|
|
|
|
|
|
|
Securities | |
|
Restricted | |
|
|
|
|
Named Executive |
|
|
|
|
|
Under | |
|
Shares or | |
|
|
|
|
Officer and |
|
|
|
|
|
Other Annual | |
|
Options | |
|
Share | |
|
LTIP | |
|
All Other | |
Principal Position |
|
Year(1) | |
|
Salary | |
|
Bonus | |
|
Compensation | |
|
Granted | |
|
Units | |
|
Payouts | |
|
Compensation | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
James G. Azlein
|
|
|
2005 |
|
|
$ |
163,000 |
|
|
$ |
100,000 |
|
|
$ |
0 |
|
|
|
1,422,278 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
President & CEO |
|
|
2004 |
|
|
|
111,286 |
|
|
|
7,808 |
|
|
|
0 |
|
|
|
320,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
2003 |
|
|
|
145,917 |
|
|
|
6,500 |
|
|
|
0 |
|
|
|
320,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
George J. Zilich
|
|
|
2005 |
|
|
$ |
65,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
475,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
CFO, General |
|
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Counsel & |
|
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secretary(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith A. Ebert
|
|
|
2005 |
|
|
$ |
44,200 |
|
|
$ |
40,000 |
|
|
$ |
0 |
|
|
|
341,667 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Former Vice- |
|
|
2004 |
|
|
|
58,338 |
|
|
|
7,479 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
President(2) |
|
|
2003 |
|
|
|
47,272 |
|
|
|
6,705 |
|
|
|
0 |
|
|
|
125,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(1) |
For fiscal years ended July 31. |
|
(2) |
During the most recently completed fiscal year, on
March 27, 2005, Mr. Ebert resigned as Director and
Vice-President. Mr. Zilich was appointed as the
Companys Chief Financial Officer and General Counsel on
January 21, 2005. Mr. Zilich was appointed Secretary
on March 28, 2005. |
Option Grants in Last Fiscal Year
The following table sets forth the details of all stock options
to acquire securities of the Company granted to the named
executive officers during the most recently completed fiscal
year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Grants | |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Percent of | |
|
|
|
Potential Realizable Value | |
|
|
Number of | |
|
Total | |
|
|
|
at Assumed Annual Rate of | |
|
|
Securities | |
|
Options | |
|
|
|
Stock Price Appreciation | |
|
|
Underlying | |
|
Granted to | |
|
|
|
for Option Term(2) | |
|
|
Options | |
|
Employees in | |
|
Exercise | |
|
Expiration | |
|
| |
|
|
Granted | |
|
Fiscal Year | |
|
Price(1) | |
|
Date | |
|
5% | |
|
10% | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
James G. Azlein
|
|
|
456,666 |
|
|
|
|
|
|
$ |
1.25 |
|
|
|
11/29/09 |
|
|
$ |
157,949 |
|
|
$ |
349,026 |
|
|
|
|
965,612 |
|
|
|
|
|
|
|
1.97 |
|
|
|
11/20/10 |
|
|
|
524,342 |
|
|
|
1,158,658 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,422,278 |
|
|
|
51.91 |
% |
|
|
|
|
|
|
|
|
|
$ |
682,291 |
|
|
$ |
1,507,684 |
|
George J. Zilich
|
|
|
175,000 |
|
|
|
|
|
|
$ |
1.97 |
|
|
|
1/20/10 |
|
|
$ |
95,028 |
|
|
$ |
209,986 |
|
|
|
|
300,000 |
|
|
|
|
|
|
|
1.79 |
|
|
|
3/27/10 |
|
|
|
148,371 |
|
|
|
327,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
475,000 |
|
|
|
17.34 |
% |
|
|
|
|
|
|
|
|
|
$ |
243,399 |
|
|
$ |
537,847 |
|
Keith A. Ebert
|
|
|
341,667 |
|
|
|
12.47 |
% |
|
$ |
1.00 |
|
|
|
11/29/09 |
|
|
$ |
94,380 |
|
|
$ |
208,556 |
|
|
|
(1) |
The exercise price per share of each option is equal to the fair
market value per share of the underlying stock on the date of
grant, as determined by quoted market prices, and converted from
Canadian dollars to U.S. dollars using the published
exchange rate on the date of grant. |
10
|
|
(2) |
The potential realizable value shown is calculated based on the
term of the option at the time of grant. Stock price
appreciation of 5% and 10% is assumed pursuant to the rules and
regulations of the U.S. Securities and Exchange Commission
and does not represent our prediction of stock price
performance. The potential realizable values at 5% and 10%
appreciation are calculated by assuming that the
U.S. dollar equivalent exercise price on the date of grant
appreciates at the indicated rate for the entire term of the
option and that the option is exercised at the U.S. dollar
equivalent exercise price and sold on the last day of its term
at the U.S. dollar equivalent appreciated price, assuming a
constant exchange rate from the date of grant. |
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values
The following table sets forth the aggregate options exercised
by the named executive officers during the most recently
completed fiscal year, and the number and value of unexercised
options on an aggregated basis as of the end of the most
recently completed fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares | |
|
|
|
|
|
|
|
|
Underlying Unexercised | |
|
Value of Unexercised | |
|
|
Securities | |
|
|
|
Options at Fiscal | |
|
In-the-Money Options at | |
|
|
Acquired on | |
|
|
|
Year End | |
|
Fiscal Year End(1) | |
Named Executive Officer |
|
Exercise | |
|
Value Realized | |
|
Exercisable/Unexercisable | |
|
Exercisable/Unexercisable | |
|
|
| |
|
| |
|
| |
|
| |
James G. Azlein
|
|
|
445,555 |
|
|
$ |
317,569 |
|
|
|
1,985,612/ 0 |
|
|
$ |
660,983/ $0 |
|
George J. Zilich
|
|
|
0 |
|
|
|
N/A |
|
|
|
475,000/ 0 |
|
|
|
$0/ $0 |
|
Keith A. Ebert
|
|
|
313,889 |
|
|
$ |
246,054 |
|
|
|
341,667/0 |
|
|
$ |
192,339/ $0 |
|
|
|
(1) |
Value is determined based on the closing market price of our
common stock on July 31, 2005 as reported by the TSX
Venture Exchange, converted from Canadian dollars to
U.S. dollars using the published exchange rate on
July 31, 2005. |
Agreements with Our Employees
We entered into an employment agreement on January 6, 2005
with George J. Zilich, our Chief Financial Officer and General
Counsel. Mr. Zilichs employment agreement provides
that he will be an at-will employee of the Company.
Mr. Zilichs employment agreement entitles him to a
base salary of $120,000 per year, a grant of options to
purchase 175,000 shares of our common stock pursuant
to our Incentive Stock Option Plan, and the right to participate
in the benefits offered to our other senior executives. If
Mr. Zilich is terminated by us without cause,
he is entitled to receive a severance payment equal to two times
his salary and benefits.
We also entered into an employment agreement on January 31,
2005 with Randy Elkins, our Controller. Mr. Elkins
employment agreement provides that he will be an at-will
employee of the Company. Mr. Elkins employment
agreement entitles him to a base salary of $80,000 per
year, an immediate grant of 25,000 options, a grant of 25,000
options after three months, and additional grants of 25,000
options based upon the achievement of performance goals after
12 months and every six months thereafter, subject to a
maximum of 175,000 options. Mr. Elkins employment
agreement also gives him the right to receive health insurance
through the plan that we maintain for our employees.
We also entered into an agreement on April 17, 2004 with
James G. Azlein, our President and Chief Executive Officer,
pursuant to which we agreed to grant to Mr. Azlein, in
exchange for personally guaranteeing 11.025% of a $2,000,000
loan to a company 11.025% of which is indirectly owned by us, a
number of shares of our common stock equal to 10% of the value
of the guarantee. Pursuant to this agreement, we have issued
50,990 shares of our common stock to Mr. Azlein. Under
the terms of this agreement, if Mr. Azlein is required to
perform under the guarantee, he has no recourse to pursue any
legal action for contribution or indemnification against us.
Management Contracts
Management functions of the Company and any subsidiary thereof
are not, to any substantial degree, performed other than by the
Directors or executive officers of the Company or any subsidiary
thereof.
11
Incentive Stock Option Plan
We have established an Incentive Stock Option Plan for issuance
of options to purchase shares of our common stock to our
officers, Directors, employees and consultants. The number of
shares reserved for issuance under this plan is limited to not
more than 10% of the total number of shares of our common stock
outstanding at any time.
Options issued to officers, Directors, employees and consultants
as a group cannot exceed 10% of our total shares of common stock
outstanding. In any year, issuances to officers and Directors as
a group cannot exceed 10% of our total shares of common stock
outstanding at the date of grant (excluding shares of common
stock issued under the Incentive Stock Option Plan or any other
equity compensation arrangement during the preceding one-year
period). In addition, under the plan in any one year we cannot
issue options in excess of 5% of our outstanding shares of
common stock to any individual officer or Director. Each of
these calculations is made on a non-diluted basis.
The Incentive Stock Option Plan permits options to be issued
with exercise prices at a discount to the market price of our
common stock. However, the majority of our options were issued
with exercise prices equal to the closing market price of our
common stock on the date of grant. As of January 10, 2006,
we have options outstanding to purchase 4,070,612 shares of
our common stock, all of which were issued with an exercise
price equal to the market price of our common stock on the date
of grant. All of the options granted by us to U.S. plan
participants since November 2004 and all other participants
since January 2005 have exercise prices equal to the closing
market price of our common stock on the date of grant.
On November 9, 2005, our Board of Directors unanimously
approved and adopted the BPI Industries Inc. 2005 Omnibus Stock
Plan, subject to approval by our shareholders at the 2005 Annual
Meeting of Shareholders and our common stock being delisted from
the TSX Venture Exchange. The Plan became effective on
December 13, 2005, when our shareholders approved the Plan
and our common stock was delisted from the TSX Venture Exchange.
The material terms of the Plan are summarized in, and a copy of
the Plan has been filed as an exhibit to, the Current Report on
Form 8-K that we filed with the Securities and Exchange
Commission on December 15, 2005. We intend to cease making
option grants under our Incentive Stock Option Plan and commence
making such grants and possibly other equity-based awards under
our 2005 Omnibus Stock Plan.
Compensation Committee Interlocks and Insider
Participation
None of our executive officers serve as a member of the board of
directors or compensation committee of any entity that has one
or more executive officers who serve on our Board of Directors
or Compensation Committee.
Report of the Compensation Committee on Executive
Compensation
The Compensation Committee is responsible for the following
matters relating to the compensation of the Companys
executive officers:
|
|
|
|
|
determination of the compensation and bonus arrangements of the
Companys executive officers; |
|
|
|
administration of the long-term incentive plans in which the
Companys executive officers participate; and |
|
|
|
the granting of stock options and other equity-based
compensation awards to the Companys executive officers. |
The Committee believes that executive compensation should be
determined primarily based on the levels required to attract and
retain the executive talent that is necessary to achieve the
Companys goals and objectives. These goals and objectives
seek to promote the long-term profitable growth of the Company.
The Committee also believes that executive compensation should
be correlated with the performance of the executive officer and
the Company. Because the Company is in the early stages of its
development, the
12
performance of the Companys executive officers is not
measured against the Companys reported earnings or other
measure of financial performance. Instead, the performance of
the Companys executive officers is measured against the
Companys growth objectives and development plans and the
executive officers expected and actual contribution to the
achievement of those objectives and plans. The Committee also
takes into consideration the executive officers
compensation history, their past and expected individual
contributions to the Company, and the compensation paid to the
executive officers of similar companies.
The Company currently uses salary, bonus and stock option awards
to compensate and motivate its executive officers. The manner of
application of these compensation tools for individual executive
officers is based upon the nature and scope of the particular
executive officers responsibilities.
During the Companys fiscal year ended July 31, 2005,
the Company paid Mr. James G. Azlein, the Chief
Executive Officer and President of the Company, base salary of
$163,000 and bonus compensation of $100,000. During the
Companys fiscal year ended July 31, 2005,
Mr. Azlein was awarded options to purchase
1,422,278 shares of the Companys common stock. In
approving this base compensation, bonus amount and stock option
awards, the Committee took into account, in addition to the
factors described above, the accomplishments of the Company
during the fiscal year, including the Companys continued
expansion of its CBM acreage rights, the commencement of its
drilling program, and the Companys successful completion
of two equity financings.
The compensation arrangements of Mr. George J. Zilich,
the Chief Financial Officer and General Counsel of the Company,
are governed by an employment agreement entered into between the
Company and Mr. Zilich on January 6, 2005.
Mr. Zilichs employment agreement entitles him to a
base salary of $120,000 per year, a grant of options to
purchase 175,000 shares of the Companys common
stock pursuant to the Companys Incentive Stock Option
Plan, and the right to participate in the benefits offered to
the Companys other senior executives. If Mr. Zilich
is terminated by the Company without cause, he is
entitled to receive a severance payment equal to two times his
salary and benefits. Mr. Zilichs employment agreement
was approved by the Board of Directors. Mr. Zilich did not
receive a bonus during the Companys fiscal year ended
July 31, 2005. During the Companys fiscal year ended
July 31, 2005, Mr. Zilich was awarded options to
purchase 475,000 shares of the Companys common
stock.
The Company has established an Incentive Stock Option Plan for
issuance of options to purchase shares of the Companys
common stock to officers, directors, employees and consultants.
The number of shares reserved for issuance under this plan is
limited to not more than 10% of the total number of shares of
the Companys common stock outstanding at any time. In any
year, issuances to officers and directors as a group cannot
exceed 10% of the Companys total shares of common stock
outstanding at the date of grant (excluding shares of common
stock issued under the Incentive Stock Option Plan or any other
equity compensation arrangement during the preceding one-year
period). In addition, under the plan in any one year the Company
cannot issue options in excess of 5% of its outstanding shares
of common stock to any individual officer or director. Each of
these calculations is made on a non-diluted basis. During the
Companys fiscal year ended July 31, 2005, the Company
awarded options to purchase 2,238,945 shares of its
common stock to its executive officers.
Members of the Compensation Committee:
Dennis Carlton (Chairperson)
Costa Vrisakis
William J. Centa
Interest of Informed Persons in Material Transactions
For purposes of the following discussion, Informed
Person means (a) a Director or executive officer of
the Company; (b) a director or executive officer of a
person or company that is itself an Informed Person or a
subsidiary of the Company; (c) any person or company who
beneficially owns, directly or indirectly, voting securities of
the Company or who exercises control or direction over voting
securities of the Company or a
13
combination of both carrying more than 10 percent of the
voting rights attached to all outstanding voting securities of
the Company, other than the voting securities held by the person
or company as underwriter in the course of a distribution; and
(d) the Company itself if it has purchased, redeemed or
otherwise acquired any of its securities, for so long as it
holds any of its securities.
Except as disclosed below, elsewhere herein or in the Notes (in
particular, Note 14) to the Companys financial
statements for the financial year ended July 31, 2005, none
of:
|
|
|
a) the Informed Persons of the Company; or |
|
|
b) any associate or affiliate of the foregoing persons, |
has any material interest, direct or indirect, in any
transaction since the commencement of the last financial year of
the Company or in a proposed transaction that has materially
affected or would materially affect the Company or any
subsidiary of the Company.
Interest of Certain Persons in Matters to be Acted Upon
Except as otherwise disclosed herein, none of the Directors or
executive officers of the Company at any time since the
beginning of the last fiscal year of the Company, the proposed
nominees for election as a Director of the Company or any
associate or affiliate of the foregoing persons, has any
material interest, direct or indirect, by way of beneficial
ownership of securities or otherwise, in any matters to be acted
upon at the meeting.
Indebtedness of Directors, Executive Officers and Senior
Officers
As of the date hereof, other than indebtedness that has been
entirely repaid on or before the date of this proxy statement or
routine indebtedness as defined in Canadian
Form 51-102F5
Information Circular of
NI 51-102, none of
the individuals who are, or at any time since the beginning of
the last fiscal year of the Company were, a Director or
executive officer of the Company or any associates of the
foregoing persons is, or at any time since the beginning of the
most recently completed fiscal year has been, indebted to the
Company or any subsidiary of the Company, or is a person whose
indebtedness to another entity is, or at any time since the
beginning of the most recently completed financial year has
been, the subject of a guarantee support agreement, letter of
credit or other similar arrangement or understanding provided by
the Company or any subsidiary of the Company.
Certain Relationships and Related Transactions
Randy Oestreich, our Vice President of Field Operations, owns
and operates A-Strike
Consulting, a consulting company that provides, among other
things, laboratory testing related to CBM. We own a lab testing
facility and allow
A-Strike Consulting to
operate the facility. We pay all expenses related to the
facility and, in return, receive 80% of the revenue generated
from the operations of the facility as reimbursement of our
expenses. During the year ended July 31, 2005, we received
approximately $59,000 in expense reimbursement related to this
arrangement.
Mr. Oestreichs brother owns Dependable Service
Company, a company that provides general labor services to us.
We paid Dependable Services Company $147,000 and $16,000 in
fiscal years ended July 31, 2005 and 2004, respectively.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal to be considered
for inclusion in the proxy statement for the Companys
annual meeting in 2006 should send the proposal to BPI
Industries Inc., addressed to the Secretary, so that it is
received on or before July 19, 2006. We suggest that all
proposals be sent certified mail, return receipt requested.
14
Pursuant to the Business Corporations Act (British Columbia), a
qualified shareholder, being either a registered or beneficial
shareholder holding voting securities of the Company who has
held those voting securities for a period not less than the two
years predating the singing of the proposal, may submit a
written proposal, no longer than 1,000 words, for
consideration at the Companys next annual general meeting.
The proposal must be signed by the submitter and a sufficient
number of shareholders representing no less than 1% of the
Companys issued and outstanding voting securities, and
received at the Companys registered and records office no
later than three months prior to the anniversary of the date of
the Companys annual general meeting for the prior year.
The proposal must be accompanied by a declaration from the
submitter and each co-signatory containing the name and address
of that signatory, the number and class of voting security, and,
if applicable, the name of the registered shareholder for those
shares.
If the Company has received a valid proposal, the Company must
send to all persons entitled to receive notice of the
Companys next annual general meeting, in accordance with
the same time limits for sending the notice of meeting, the text
of the proposal, the names and mailing addresses of the
submitter and supporters, and the text of any statement
accompanying the proposal. Unless the Company receives more than
one proposal pertaining to substantially the same matter, the
Company must allow the submitter to present the proposal, in
person or by proxy, at the relevant annual general meeting.
Where the Company receives more than one proposal pertaining to
substantially the same matter, the Company must only comply with
these provisions with respect to the first proposal received by
the Company.
If the Company does not intend to process a proposal because of
a statutory exemption from compliance with these provisions, the
Company must, within 21 days after the proposal is received
by the Companys registered and records office, send to the
submitter a written notice of the Companys decision as
well as the reason(s) why the Company believes it does not have
to process the proposal. The submitter has recourse to a court
of competent jurisdiction to review the Companys decision.
ADDITIONAL COPIES OF MEETING MATERIALS
Additional copies of the materials for the meeting, comprising
the notice of meeting, this proxy statement and the form of
proxy, will be available at the transfer agent and the
registered office during normal business hours.
ADDITIONAL INFORMATION
Additional information relating to the Company is available on
SEDAR at www.sedar.com. Financial information is provided in the
Companys financial statements and Management Discussion
and Analysis for its most recently completed fiscal year, copies
of which are available on SEDAR.
We are required to file annual, quarterly and current reports,
proxy statements and other information with the Securities and
Exchange Commission. Our Securities and Exchange Commission
filings are available to the public over the Internet at the
Securities and Exchange Commissions website located at
www.sec.gov. You may also read and copy any document that we
file with the Securities and Exchange Commission at the
Securities and Exchange Commissions Public Reference Room
located at Headquarters Office, 100 F Street, N.E.,
Room 1580, Washington, D.C. 20549. You may obtain
additional information on the Public Reference Room by calling
the Securities and Exchange Commission at
1-800-SEC-0330. We
maintain a website at www.bpi-industries.com. The information
contained on our website is not incorporated by reference in
this proxy statement, and you should not consider it a part of
this proxy statement.
You should rely only on the information contained or referred to
in this proxy statement to vote on the matters presented to you
for your approval. We have not authorized anyone to provide you
with information that is different from what is contained in
this proxy statement. You should not assume that the information
contained in this proxy statement is accurate as of any date
other than the date hereof.
15
APPROVAL
The contents and distribution to shareholders of this proxy
statement has been approved by the Board of Directors of the
Company.
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By Order of the Board of Directors |
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BPI INDUSTRIES INC. |
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JAMES G. AZLEIN |
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Director, President and Chief Executive Officer |
DATED this 12th day of January, 2006.
16
Appendix A
BPI ENERGY HOLDINGS, INC.
(the Company)
Incorporation number: BCO214676
ARTICLES
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1.
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Interpretation |
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A-1 |
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2.
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Shares and Share Certificates |
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A-1 |
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3.
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Issue of Shares |
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A-2 |
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4.
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Share Registers |
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A-3 |
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5.
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Share Transfers |
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A-3 |
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6.
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Transmission of Shares |
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A-4 |
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7.
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Purchase of Shares |
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A-5 |
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8.
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Borrowing Powers |
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A-5 |
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9.
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Alterations |
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A-5 |
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10.
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Meetings of Shareholders |
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A-6 |
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11.
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Proceedings at Meetings of Shareholders |
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A-8 |
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12.
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Votes of Shareholders |
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A-11 |
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13.
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Directors |
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A-14 |
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14.
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Election and Removal of Directors |
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A-15 |
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15.
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Alternate Directors |
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A-17 |
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16.
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Powers and Duties of Directors |
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A-18 |
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17.
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Disclosure of Interest of Directors |
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A-19 |
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18.
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Proceedings of Directors |
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A-20 |
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19.
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Executive and Other Committees |
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A-22 |
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20.
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Officers |
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A-23 |
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21.
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Indemnification |
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A-23 |
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22.
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Dividends and Reserves |
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A-24 |
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23.
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Documents, Records and Reports |
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A-26 |
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24.
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Notices |
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A-26 |
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25.
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Seal |
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A-27 |
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26.
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Prohibitions |
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A-28 |
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A-i
In these Articles, unless the context otherwise requires:
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(1) board of directors, directors
and board mean the directors or sole director of the
Company for the time being; |
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(2) Business Corporations Act means the
Business Corporations Act (British Columbia) from time to
time in force and all amendments thereto and includes all
regulations and amendments thereto made pursuant to that Act; |
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(3) legal personal representative means the
personal or other legal representative of the shareholder; |
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(4) registered address of a shareholder means
the shareholders address as recorded in the central
securities register; |
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(5) seal means the seal of the Company, if any. |
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1.2 Business Corporations Act
and Interpretation Act Definitions Applicable |
The definitions in the Business Corporations Act and the
definitions and rules of construction in the Interpretation
Act, with the necessary changes, so far as applicable, and
unless the context requires otherwise, apply to these Articles
as if they were an enactment. If there is a conflict between a
definition in the Business Corporations Act and a
definition or rule in the Interpretation Act relating to
a term used in these Articles, the definition in the Business
Corporations Act will prevail in relation to the use of the
term in these Articles. If there is a conflict between these
Articles and the Business Corporations Act, the
Business Corporations Act will prevail.
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2. |
Shares and Share
Certificates |
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2.1 Authorized Share
Structure |
The authorized share structure of the Company consists of
200,000,000 common shares without par value.
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2.2 Form of Share
Certificate |
Each share certificate issued by the Company must comply with,
and be signed as required by, the Business Corporations
Act.
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2.3 Shareholder Entitled to
Certificate or Acknowledgment |
Each shareholder is entitled, without charge, to (a) one
share certificate representing the shares of each class or
series of shares registered in the shareholders name or
(b) a non-transferable written acknowledgment of the
shareholders right to obtain such a share certificate,
provided that in respect of a share held jointly by several
persons, the Company is not bound to issue more than one share
certificate and delivery of a share certificate for a share to
one of several joint shareholders or to one of the
shareholders duly authorized agents will be sufficient
delivery to all.
Any share certificate or non-transferable written acknowledgment
of a shareholders right to obtain a share certificate may
be sent to the shareholder by mail at the shareholders
registered address and neither the Company nor any director,
officer or agent of the Company is liable for any loss to the
shareholder because the share certificate or acknowledgement is
lost in the mail or stolen.
A-1
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2.5 Replacement of Worn Out
or Defaced Certificate or Acknowledgement |
If the directors are satisfied that a share certificate or a
non-transferable written acknowledgment of the
shareholders right to obtain a share certificate is worn
out or defaced, they must, on production to them of the share
certificate or acknowledgment, as the case may be, and on such
other terms, if any, as they think fit:
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(1) order the share certificate or acknowledgment, as the
case may be, to be cancelled; and |
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(2) issue a replacement share certificate or
acknowledgment, as the case may be. |
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2.6 Replacement of Lost,
Stolen or Destroyed Certificate or Acknowledgment |
If a share certificate or a non-transferable written
acknowledgment of a shareholders right to obtain a share
certificate is lost, stolen or destroyed, a replacement share
certificate or acknowledgment, as the case may be, must be
issued to the person entitled to that share certificate or
acknowledgment, as the case may be, if the directors receive:
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(1) proof satisfactory to them that the share certificate
or acknowledgment is lost, stolen or destroyed; and |
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(2) any indemnity the directors consider adequate. |
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2.7 Splitting Share
Certificates |
If a shareholder surrenders a share certificate to the Company
with a written request that the Company issue in the
shareholders name two or more share certificates, each
representing a specified number of shares and in the aggregate
representing the same number of shares as the share certificate
so surrendered, the Company must cancel the surrendered share
certificate and issue replacement share certificates in
accordance with that request.
There must be paid to the Company, in relation to the issue of
any share certificate under Articles 2.5, 2.6 or 2.7, the
amount, if any and which must not exceed the amount prescribed
under the Business Corporations Act, determined by the
directors.
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2.9 Recognition of
Trusts |
Except as required by law or statute or these Articles, no
person will be recognized by the Company as holding any share
upon any trust, and the Company is not bound by or compelled in
any way to recognize (even when having notice thereof) any
equitable, contingent, future or partial interest in any share
or fraction of a share or (except as by law or statute or these
Articles provided or as ordered by a court of competent
jurisdiction) any other rights in respect of any share except an
absolute right to the entirety thereof in the shareholder.
Subject to the Business Corporations Act and the rights
of the holders of issued shares of the Company, the Company may
issue, allot, sell or otherwise dispose of the unissued shares,
and issued shares held by the Company, at the times, to the
persons, including directors, in the manner, on the terms and
conditions and for the issue prices (including any premium at
which shares with par value may be issued) that the directors
may determine. The issue price for a share with par value must
be equal to or greater than the par value of the share.
A-2
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3.2 Commissions and
Discounts |
The Company may at any time, pay a reasonable commission or
allow a reasonable discount to any person in consideration of
that person purchasing or agreeing to purchase shares of the
Company from the Company or any other person or procuring or
agreeing to procure purchasers for shares of the Company.
The Company may pay such brokerage fee or other consideration as
may be lawful for or in connection with the sale or placement of
its securities.
Except as provided for by the Business Corporations Act,
no share may be issued until it is fully paid. A share is fully
paid when:
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(1) consideration is provided to the Company for the issue
of the share by one or more of the following: |
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(a) past services performed for the Company; |
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(b) property; |
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(c) money; and |
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(2) the value of the consideration received by the Company
equals or exceeds the issue price set for the share under
Article 3.1. |
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3.5 Share Purchase Warrants
and Rights |
Subject to the Business Corporations Act, the Company may
issue share purchase warrants, options and rights upon such
terms and conditions as the directors determine, which share
purchase warrants, options and rights may be issued alone or in
conjunction with debentures, debenture stock, bonds, shares or
any other securities issued or created by the Company from time
to time.
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4.1 Central Securities
Register |
As required by and subject to the Business Corporations
Act, the Company must maintain in British Columbia a central
securities register. The directors may, subject to the
Business Corporations Act, appoint an agent to maintain
the central securities register. The directors may also appoint
one or more agents, including the agent which keeps the central
securities register, as transfer agent for its shares or any
class or series of its shares, as the case may be, and the same
or another agent as registrar for its shares or such class or
series of its shares, as the case may be. The directors may
terminate such appointment of any agent at any time and may
appoint another agent in its place.
The Company must not at any time close its central securities
register.
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5.1 Registering
Transfers |
A transfer of a share of the Company must not be registered
unless:
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(1) a duly signed instrument of transfer in respect of the
share has been received by the Company; |
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(2) if a share certificate has been issued by the Company
in respect of the share to be transferred, that share
certificate has been surrendered to the Company; and |
A-3
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(3) if a non-transferable written acknowledgment of the
shareholders right to obtain a share certificate has been
issued by the Company in respect of the share to be transferred,
that acknowledgment has been surrendered to the Company. |
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5.2 Form of Instrument of
Transfer |
The instrument of transfer in respect of any share of the
Company must be either in the form, if any, on the back of the
Companys share certificates or in any other form that may
be approved by the directors from time to time.
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5.3 Transferor Remains
Shareholder |
Except to the extent that the Business Corporations Act
otherwise provides, the transferor of shares is deemed to
remain the holder of the shares until the name of the transferee
is entered in a securities register of the Company in respect of
the transfer.
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5.4 Signing of Instrument of
Transfer |
If a shareholder, or his or her duly authorized attorney, signs
an instrument of transfer in respect of shares registered in the
name of the shareholder, the signed instrument of transfer
constitutes a complete and sufficient authority to the Company
and its directors, officers and agents to register the number of
shares specified in the instrument of transfer or specified in
any other manner, or, if no number is specified, all the shares
represented by the share certificates or set out in the written
acknowledgments deposited with the instrument of transfer:
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(1) in the name of the person named as transferee in that
instrument of transfer; or |
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(2) if no person is named as transferee in that instrument
of transfer, in the name of the person on whose behalf the
instrument is deposited for the purpose of having the transfer
registered. |
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5.5 Enquiry as to
Title Not Required |
Neither the Company nor any director, officer or agent of the
Company is bound to inquire into the title of the person named
in the instrument of transfer as transferee or, if no person is
named as transferee in the instrument of transfer, of the person
on whose behalf the instrument is deposited for the purpose of
having the transfer registered or is liable for any claim
related to registering the transfer by the shareholder or by any
intermediate owner or holder of the shares, of any interest in
the shares, of any share certificate representing such shares or
of any written acknowledgment of a right to obtain a share
certificate for such shares.
There must be paid to the Company, in relation to the
registration of any transfer, the amount, if any, determined by
the directors.
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6. |
Transmission of
Shares |
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6.1 Legal Personal
Representative Recognized on Death |
In case of the death of a shareholder, the legal personal
representative, or if the shareholder was a joint holder, the
surviving joint holder, will be the only person recognized by
the Company as having any title to the shareholders
interest in the shares. Before recognizing a person as a legal
personal representative, the directors may require proof of
appointment by a court of competent jurisdiction, a grant of
letters probate, letters of administration or such other
evidence or documents as the directors consider appropriate.
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6.2 Rights of Legal Personal
Representative |
The legal personal representative has the same rights,
privileges and obligations that attach to the shares held by the
shareholder, including the right to transfer the shares in
accordance with these Articles, provided
A-4
the documents required by the Business Corporations Act
and the directors have been deposited with the Company.
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7.1 Company Authorized to
Purchase Shares |
Subject to Article 7.2, the special rights and restrictions
attached to the shares of any class or series and the
Business Corporations Act, the Company may, if authorized
by the directors, purchase or otherwise acquire any of its
shares at the price and upon the terms specified in such
resolution.
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7.2 Purchase When
Insolvent |
The Company must not make a payment or provide any other
consideration to purchase or otherwise acquire any of its shares
if there are reasonable grounds for believing that:
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(1) the Company is insolvent; or |
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(2) making the payment or providing the consideration would
render the Company insolvent. |
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7.3 Sale and Voting of
Purchased Shares |
If the Company retains a share redeemed, purchased or otherwise
acquired by it, the Company may sell, gift or otherwise dispose
of the share, but, while such share is held by the Company, it:
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(1) is not entitled to vote the share at a meeting of its
shareholders; |
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(2) must not pay a dividend in respect of the
share; and |
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(3) must not make any other distribution in respect of the
share. |
The Company, if authorized by the directors, may:
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(1) borrow money in the manner and amount, on the security,
from the sources and on the terms and conditions that they
consider appropriate; |
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(2) issue bonds, debentures and other debt obligations
either outright or as security for any liability or obligation
of the Company or any other person and at such discounts or
premiums and on such other terms as they consider appropriate; |
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(3) guarantee the repayment of money by any other person or
the performance of any obligation of any other person; and |
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(4) mortgage, charge, whether by way of specific or
floating charge, grant a security interest in, or give other
security on, the whole or any part of the present and future
assets and undertaking of the Company. |
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9.1 Alteration of Authorized
Share Structure |
Subject to Article 9.2 and the Business Corporations
Act, the Company may by ordinary resolution:
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(1) create one or more classes or series of shares or, if
none of the shares of a class or series of shares are allotted
or issued, eliminate that class or series of shares; |
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(2) increase, reduce or eliminate the maximum number of
shares that the Company is authorized to issue out of any class
or series of shares or establish a maximum number of shares that
the Company is authorized to issue out of any class or series of
shares for which no maximum is established; |
A-5
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(3) if the Company is authorized to issue shares of a class
of shares with par value: |
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(a) decrease the par value of those shares; or |
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(b) if none of the shares of that class of shares are
allotted or issued, increase the par value of those shares; |
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(4) alter the identifying name of any of its shares; or |
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(5) otherwise alter its shares or authorized share
structure when required or permitted to do so by the Business
Corporations Act. |
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9.2 Special Rights and
Restrictions |
Subject to the Business Corporations Act, the Company may
by special resolution:
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(1) create special rights or restrictions for, and attach
those special rights or restrictions to, the shares of any class
or series of shares, whether or not any or all of those shares
have been issued; |
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(2) vary or delete any special rights or restrictions
attached to the shares of any class or series of shares, whether
or not any or all of those shares have been issued; |
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(3) subdivide or consolidate all or any of its unissued, or
fully paid issued, shares; or |
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(4) change all or any of its unissued, or fully paid
issued, shares with par value into shares without par value or
any of its unissued shares without par value into shares with
par value. |
The Company may by special resolution authorize an alteration of
its Notice of Articles in order to change its name.
If the Business Corporations Act does not specify the
type of resolution and these Articles do not specify another
type of resolution, the Company may by special resolution alter
these Articles.
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10. |
Meetings of
Shareholders |
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10.1 Annual General
Meetings |
Unless an annual general meeting is deferred or waived in
accordance with the Business Corporations Act, the
Company must hold an annual general meeting at least once in
each calendar year and not more than 15 months after the
last annual reference date at such time and place as may be
determined by the directors.
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10.2 Resolution Instead of
Annual General Meeting |
If all the shareholders who are entitled to vote at an annual
general meeting consent by a unanimous resolution under the
Business Corporations Act to all of the business that is
required to be transacted at that annual general meeting, the
annual general meeting is deemed to have been held on the date
of the unanimous resolution. The shareholders must, in any
unanimous resolution passed under this Article 10.2, select
as the Companys annual reference date a date that would be
appropriate for the holding of the applicable annual general
meeting.
A-6
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10.3 Calling of Meetings of
Shareholders |
The directors may, whenever they think fit, call a meeting of
shareholders.
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10.4 Notice for Meetings of
Shareholders |
The Company must send notice of the date, time and location of
any meeting of shareholders, by way of either mail, delivery,
fax or email, or in such other manner, if any, as may be
prescribed by ordinary resolution (whether previous notice of
the resolution has been given or not), to each shareholder
entitled to attend the meeting, to each director and to the
auditor of the Company, unless these Articles otherwise provide,
at least the following number of days before the meeting:
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(1) if and for so long as the Company is a public company,
21 days; |
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(2) otherwise, 10 days. |
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10.5 Record Date for
Notice |
The directors may set a date as the record date for the purpose
of determining shareholders entitled to notice of any meeting of
shareholders. The record date must not precede the date on which
the meeting is to be held by more than two months or, in the
case of a general meeting requisitioned by shareholders under
the Business Corporations Act, by more than four months.
The record date must not precede the date on which the meeting
is held by fewer than:
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(1) if and for so long as the Company is a public company,
21 days; |
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(2) otherwise, 10 days. |
If no record date is set, the record date is 5 p.m. on the
day immediately preceding the first date on which the notice is
sent or, if no notice is sent, the beginning of the meeting.
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10.6 Record Date for
Voting |
The directors may set a date as the record date for the purpose
of determining shareholders entitled to vote at any meeting of
shareholders. The record date must not precede the date on which
the meeting is to be held by more than two months or, in the
case of a general meeting requisitioned by shareholders under
the Business Corporations Act, by more than four months.
If no record date is set, the record date is 5 p.m. on the
day immediately preceding the first date on which the notice is
sent or, if no notice is sent, the beginning of the meeting.
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10.7 Failure to Give Notice
and Waiver of Notice |
The accidental omission to send notice of any meeting to, or the
non-receipt of any notice by, any of the persons entitled to
notice does not invalidate any proceedings at that meeting. Any
person entitled to notice of a meeting of shareholders may, in
writing or otherwise, waive or reduce the period of notice of
such meeting.
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10.8 Notice of Special
Business at Meetings of Shareholders |
If a meeting of shareholders is to consider special business
within the meaning of Article 11.1, the notice of meeting
must:
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(1) state the general nature of the special
business; and |
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(2) if the special business includes considering,
approving, ratifying, adopting or authorizing any document or
the signing of or giving of effect to any document, have
attached to it a copy of the document or state that a copy of
the document will be available for inspection by shareholders: |
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(a) at the Companys records office, or at such other
reasonably accessible location in British Columbia as is
specified in the notice; and |
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(b) during statutory business hours on any one or more
specified days before the day set for the holding of the meeting. |
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10.9 Location of
Meetings |
A meeting of shareholders of the Company may be held anywhere in
the world as determined by the directors.
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11. |
Proceedings at Meetings
of Shareholders |
At a meeting of shareholders, the following business is special
business:
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(1) at a meeting of shareholders that is not an annual
general meeting, all business is special business except
business relating to the conduct of or voting at the meeting; |
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(2) at an annual general meeting, all business is special
business except for the following: |
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(a) business relating to the conduct of or voting at the
meeting; |
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(b) consideration of any financial statements of the
Company presented to the meeting; |
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(c) consideration of any reports of the directors or
auditor; |
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(d) the setting or changing of the number of directors; |
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(e) the election or appointment of directors; |
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(f) the appointment of an auditor; |
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(g) the setting of the remuneration of an auditor; |
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(h) business arising out of a report of the directors not
requiring the passing of a special resolution or an exceptional
resolution; |
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(i) any other business which, under these Articles or the
Business Corporations Act, may be transacted at a meeting
of shareholders without prior notice of the business being given
to the shareholders. |
The majority of votes required for the Company to pass a special
resolution at a meeting of shareholders is
2/3
of the votes cast on the resolution.
Subject to the special rights and restrictions attached to the
shares of any class or series of shares, the quorum for the
transaction of business at a meeting of shareholders is one or
more shareholders represented in person or by proxy at the
meeting that alone or together, in the aggregate, hold at least
331/3%
of the issued shares entitled to be voted at the meeting.
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11.4 One Shareholder May
Constitute Quorum |
If there is only one shareholder entitled to vote at a meeting
of shareholders:
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(1) the quorum is one person who is, or who represents by
proxy, that shareholder, and |
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(2) that shareholder, present in person or by proxy, may
constitute the meeting. |
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11.5 Other Persons May
Attend |
The directors, the president (if any), the secretary (if any),
the assistant secretary (if any), any lawyer for the Company,
the auditor of the Company and any other persons invited by the
directors are entitled to attend any meeting of shareholders,
but if any of those persons does attend a meeting of
shareholders, that person is not to be counted in the quorum and
is not entitled to vote at the meeting unless that person is a
shareholder or proxy holder entitled to vote at the meeting.
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11.6 Requirement of
Quorum |
No business, other than the election of a chair of the meeting
and the adjournment of the meeting, may be transacted at any
meeting of shareholders unless a quorum of shareholders entitled
to vote is present at the commencement of the meeting, but such
quorum need not be present throughout the meeting.
If, within one-half hour from the time set for the holding of a
meeting of shareholders, a quorum is not present:
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(1) in the case of a general meeting requisitioned by
shareholders, the meeting is dissolved, and |
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(2) in the case of any other meeting of shareholders, the
meeting stands adjourned to the same day in the next week at the
same time and place. |
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11.8 Lack of Quorum at
Succeeding Meeting |
If, at the meeting to which the meeting referred to in
Article 11.7(2) was adjourned, a quorum is not present
within one-half hour from the time set for the holding of the
meeting, the person or persons present and being, or
representing by proxy, one or more shareholders entitled to
attend and vote at the meeting constitute a quorum.
The following individual is entitled to preside as chair at a
meeting of shareholders:
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(1) the chair of the board, if any; or |
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(2) if the chair of the board is absent or unwilling to act
as chair of the meeting, the president, if any. |
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11.10 Selection of Alternate
Chair |
If, at any meeting of shareholders, there is no chair of the
board or president present within 15 minutes after the time set
for holding the meeting, or if the chair of the board and the
president are unwilling to act as chair of the meeting, or if
the chair of the board and the president have advised the
secretary, if any, or any director present at the meeting, that
they will not be present at the meeting, the directors present
must choose one of their number to be chair of the meeting or if
all of the directors present decline to take the chair or fail
to so choose or if no director is present, the shareholders
entitled to vote at the meeting who are present in person or by
proxy may choose any person present at the meeting to chair the
meeting.
The chair of a meeting of shareholders may, and if so directed
by the meeting must, adjourn the meeting from time to time and
from place to place, but no business may be transacted at any
adjourned meeting other than the business left unfinished at the
meeting from which the adjournment took place.
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11.12 Notice of Adjourned
Meeting |
It is not necessary to give any notice of an adjourned meeting
or of the business to be transacted at an adjourned meeting of
shareholders except that, when a meeting is adjourned for
30 days or more, notice of the adjourned meeting must be
given as in the case of the original meeting.
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11.13 Decisions by Show of
Hands or Poll |
Subject to the Business Corporations Act, every motion
put to a vote at a meeting of shareholders will be decided on a
show of hands unless a poll, before or on the declaration of the
result of the vote by show of hands, is directed by the chair or
demanded by at least one shareholder entitled to vote who is
present in person or by proxy.
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11.14 Declaration of
Result |
The chair of a meeting of shareholders must declare to the
meeting the decision on every question in accordance with the
result of the show of hands or the poll, as the case may be, and
that decision must be entered in the minutes of the meeting. A
declaration of the chair that a resolution is carried by the
necessary majority or is defeated is, unless a poll is directed
by the chair or demanded under Article 11.13, conclusive
evidence without proof of the number or proportion of the votes
recorded in favour of or against the resolution.
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11.15 Motion Need Not be
Seconded |
No motion proposed at a meeting of shareholders need be seconded
unless the chair of the meeting rules otherwise, and the chair
of any meeting of shareholders is entitled to propose or second
a motion.
In case of an equality of votes, the chair of a meeting of
shareholders does not, either on a show of hands or on a poll,
have a second or casting vote in addition to the vote or votes
to which the chair may be entitled as a shareholder.
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11.17 Manner of Taking
Poll |
Subject to Article 11.18, if a poll is duly demanded at a
meeting of shareholders:
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(1) the poll must be taken: |
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(a) at the meeting, or within seven days after the date of
the meeting, as the chair of the meeting directs; and |
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(b) in the manner, at the time and at the place that the
chair of the meeting directs; |
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(2) the result of the poll is deemed to be the decision of
the meeting at which the poll is demanded; and |
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(3) the demand for the poll may be withdrawn by the person
who demanded it. |
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11.18 Demand for Poll on
Adjournment |
A poll demanded at a meeting of shareholders on a question of
adjournment must be taken immediately at the meeting.
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11.19 Chair Must Resolve
Dispute |
In the case of any dispute as to the admission or rejection of a
vote given on a poll, the chair of the meeting must determine
the dispute, and his or her determination made in good faith is
final and conclusive.
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On a poll, a shareholder entitled to more than one vote need not
cast all the votes in the same way.
No poll may be demanded in respect of the vote by which a chair
of a meeting of shareholders is elected.
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11.22 Demand for Poll Not to
Prevent Continuance of Meeting |
The demand for a poll at a meeting of shareholders does not,
unless the chair of the meeting so rules, prevent the
continuation of a meeting for the transaction of any business
other than the question on which a poll has been demanded.
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11.23 Retention of Ballots
and Proxies |
The Company must, for at least three months after a meeting of
shareholders, keep each ballot cast on a poll and each proxy
voted at the meeting, and, during that period, make them
available for inspection during normal business hours by any
shareholder or proxyholder entitled to vote at the meeting. At
the end of such three month period, the Company may destroy such
ballots and proxies.
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12. |
Votes of
Shareholders |
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12.1 Number of Votes by
Shareholder or by Shares |
Subject to any special rights or restrictions attached to any
shares and to the restrictions imposed on joint shareholders
under Article 12.3:
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(1) on a vote by show of hands, every person present who is
a shareholder or proxy holder and entitled to vote on the matter
has one vote; and |
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(2) on a poll, every shareholder entitled to vote on the
matter has one vote in respect of each share entitled to be
voted on the matter and held by that shareholder and may
exercise that vote either in person or by proxy. |
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12.2 Votes of Persons in
Representative Capacity |
A person who is not a shareholder may vote at a meeting of
shareholders, whether on a show of hands or on a poll, and may
appoint a proxy holder to act at the meeting, if, before doing
so, the person satisfies the chair of the meeting, or the
directors, that the person is a legal personal representative or
a trustee in bankruptcy for a shareholder who is entitled to
vote at the meeting.
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12.3 Votes by Joint
Holders |
If there are joint shareholders registered in respect of any
share:
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(1) any one of the joint shareholders may vote at any
meeting, either personally or by proxy, in respect of the share
as if that joint shareholder were solely entitled to it; or |
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(2) if more than one of the joint shareholders is present
at any meeting, personally or by proxy, and more than one of
them votes in respect of that share, then only the vote of the
joint shareholder present whose name stands first on the central
securities register in respect of the share will be counted. |
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12.4 Legal Personal
Representatives as Joint Shareholders |
Two or more legal personal representatives of a shareholder in
whose sole name any share is registered are, for the purposes of
Article 12.3, deemed to be joint shareholders.
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12.5 Representative of a
Corporate Shareholder |
If a corporation, that is not a subsidiary of the Company, is a
shareholder, that corporation may appoint a person to act as its
representative at any meeting of shareholders of the Company,
and:
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(1) for that purpose, the instrument appointing a
representative must: |
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(a) be received at the registered office of the Company or
at any other place specified, in the notice calling the meeting,
for the receipt of proxies, at least the number of business days
specified in the notice for the receipt of proxies, or if no
number of days is specified, two business days before the day
set for the holding of the meeting; or |
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(b) be provided, at the meeting, to the chair of the
meeting or to a person designated by the chair of the meeting; |
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(2) if a representative is appointed under this
Article 12.5: |
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(a) the representative is entitled to exercise in respect
of and at that meeting the same rights on behalf of the
corporation that the representative represents as that
corporation could exercise if it were a shareholder who is an
individual, including, without limitation, the right to appoint
a proxy holder; and |
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(b) the representative, if present at the meeting, is to be
counted for the purpose of forming a quorum and is deemed to be
a shareholder present in person at the meeting. |
Evidence of the appointment of any such representative may be
sent to the Company by written instrument, fax or any other
method of transmitting legibly recorded messages.
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12.6 Proxy Provisions Do Not
Apply to All Companies |
Articles 12.7 to 12.15 do not apply to the Company if and
for so long as it is a public company or a pre-existing
reporting company which has the Statutory Reporting Company
Provisions as part of its Articles or to which the Statutory
Reporting Company Provisions apply.
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12.7 Appointment of Proxy
Holders |
Every shareholder of the Company, including a corporation that
is a shareholder but not a subsidiary of the Company, entitled
to vote at a meeting of shareholders of the Company may, by
proxy, appoint one or more (but not more than five) proxy
holders to attend and act at the meeting in the manner, to the
extent and with the powers conferred by the proxy.
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12.8 Alternate Proxy
Holders |
A shareholder may appoint one or more alternate proxy holders to
act in the place of an absent proxy holder.
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12.9 When Proxy Holder Need
Not Be Shareholder |
A person must not be appointed as a proxy holder unless the
person is a shareholder, although a person who is not a
shareholder may be appointed as a proxy holder if:
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(1) the person appointing the proxy holder is a corporation
or a representative of a corporation appointed under
Article 12.5; |
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(2) the Company has at the time of the meeting for which
the proxy holder is to be appointed only one shareholder
entitled to vote at the meeting; or |
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(3) the shareholders present in person or by proxy at and
entitled to vote at the meeting for which the proxy holder is to
be appointed, by a resolution on which the proxy holder is not
entitled to vote but in |
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respect of which the proxy holder is to be counted in the
quorum, permit the proxy holder to attend and vote at the
meeting. |
A proxy for a meeting of shareholders must:
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(1) be received at the registered office of the Company or
at any other place specified, in the notice calling the meeting,
for the receipt of proxies, at least the number of business days
specified in the notice, or if no number of days is specified,
two business days before the day set for the holding of the
meeting; or |
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(2) unless the notice provides otherwise, be provided, at
the meeting, to the chair of the meeting or to a person
designated by the chair of the meeting. |
A proxy may be sent to the Company by written instrument, fax or
any other method of transmitting legibly recorded messages.
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12.11 Validity of Proxy
Vote |
A vote given in accordance with the terms of a proxy is valid
notwithstanding the death or incapacity of the shareholder
giving the proxy and despite the revocation of the proxy or the
revocation of the authority under which the proxy is given,
unless notice in writing of that death, incapacity or revocation
is received:
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(1) at the registered office of the Company, at any time up
to and including the last business day before the day set for
the holding of the meeting at which the proxy is to be
used; or |
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(2) by the chair of the meeting, before the vote is taken. |
A proxy, whether for a specified meeting or otherwise, must be
either in the following form or in any other form approved by
the directors or the chair of the meeting:
[name of company]
(the Company)
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The undersigned, being a shareholder of the Company, hereby
appoints [name] or, failing that person, [name],
as proxy holder for the undersigned to attend, act and vote for
and on behalf of the undersigned at the meeting of shareholders
of the Company to be held on [month, day, year] and at
any adjournment of that meeting. |
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Number of shares in respect of which this proxy is given (if no
number is specified, then this proxy if given in respect of all
shares registered in the name of the shareholder): |
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Signed
[month, day, year] |
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[Signature
of shareholder] |
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[Name
of shareholder printed] |
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12.13 Revocation of
Proxy |
Subject to Article 12.14, every proxy may be revoked by an
instrument in writing that is:
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(1) received at the registered office of the Company at any
time up to and including the last business day before the day
set for the holding of the meeting at which the proxy is to be
used; or |
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(2) provided, at the meeting, to the chair of the meeting. |
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12.14 Revocation of Proxy
Must Be Signed |
An instrument referred to in Article 12.13 must be signed
as follows:
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(1) if the shareholder for whom the proxy holder is
appointed is an individual, the instrument must be signed by the
shareholder or his or her legal personal representative or
trustee in bankruptcy; |
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(2) if the shareholder for whom the proxy holder is
appointed is a corporation, the instrument must be signed by the
corporation or by a representative appointed for the corporation
under Article 12.5. |
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12.15 Production of Evidence
of Authority to Vote |
The chair of any meeting of shareholders may, but need not,
inquire into the authority of any person to vote at the meeting
and may, but need not, demand from that person production of
evidence as to the existence of the authority to vote.
The number of directors, excluding additional directors
appointed under Article 14.8, is set at:
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(1) subject to paragraphs (2) and (3), the number
of directors that is equal to the number of the Companys
first directors; |
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(2) if the Company is a public company, the greater of
three and the most recently set of: |
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(a) the number of directors set by ordinary resolution
(whether or not previous notice of the resolution was
given); and |
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(b) the number of directors set under Article 14.4; |
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(3) if the Company is not a public company, the most
recently set of: |
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(a) the number of directors set by ordinary resolution
(whether or not previous notice of the resolution was
given); and |
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(b) the number of directors set under Article 14.4. |
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13.2 Change in Number of
Directors |
If the number of directors is set under Articles 13.1(2)(a)
or 13.1(3)(a):
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(1) the shareholders may elect or appoint the directors
needed to fill any vacancies in the board of directors up to
that number; |
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(2) if the shareholders do not elect or appoint the
directors needed to fill any vacancies in the board of directors
up to that number contemporaneously with the setting of that
number, then the directors may appoint, or the shareholders may
elect or appoint, directors to fill those vacancies. |
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13.3 Directors Acts
Valid Despite Vacancy |
An act or proceeding of the directors is not invalid merely
because fewer than the number of directors set or otherwise
required under these Articles is in office.
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13.4 Qualifications of
Directors |
A director is not required to hold a share in the capital of the
Company as qualification for his or her office but must be
qualified as required by the Business Corporations Act to
become, act or continue to act as a director.
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13.5 Remuneration of
Directors |
The directors are entitled to the remuneration for acting as
directors, if any, as the directors may from time to time
determine. If the directors so decide, the remuneration of the
directors, if any, will be determined by the shareholders. That
remuneration may be in addition to any salary or other
remuneration paid to any officer or employee of the Company as
such, who is also a director.
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13.6 Reimbursement of
Expenses of Directors |
The Company must reimburse each director for the reasonable
expenses that he or she may incur in and about the business of
the Company.
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13.7 Special Remuneration for
Directors |
If any director performs any professional or other services for
the Company that in the opinion of the directors are outside the
ordinary duties of a director, or if any director is otherwise
specially occupied in or about the Companys business, he
or she may be paid remuneration fixed by the directors, or, at
the option of that director, fixed by ordinary resolution, and
such remuneration may be either in addition to, or in
substitution for, any other remuneration that he or she may be
entitled to receive.
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13.8 Gratuity, Pension or
Allowance on Retirement of Director |
Unless otherwise determined by ordinary resolution, the
directors on behalf of the Company may pay a gratuity or pension
or allowance on retirement to any director who has held any
salaried office or place of profit with the Company or to his or
her spouse or dependants and may make contributions to any fund
and pay premiums for the purchase or provision of any such
gratuity, pension or allowance.
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14. |
Election and Removal of
Directors |
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14.1 Election at Annual
General Meeting |
At every annual general meeting and in every unanimous
resolution contemplated by Article 10.2:
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(1) the shareholders entitled to vote at the annual general
meeting for the election of directors must elect, or in the
unanimous resolution appoint, a board of directors consisting of
the number of directors for the time being set under these
Articles; |
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(2) each director may be elected for a term of office of
one or more years of office as may be specified by ordinary
resolution at the time he is elected. In the absence of any such
ordinary resolution, a directors term of office shall be
one year of office. No director shall be elected for a term of
office exceeding five years of office. The shareholders may, by
special resolution, vary the term of office of any
director; and |
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(3) all directors are eligible for re-election or
re-appointment. |
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14.2 Consent to be a
Director |
No election, appointment or designation of an individual as a
director is valid unless:
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(1) that individual consents to be a director in the manner
provided for in the Business Corporations Act; |
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(2) that individual is elected or appointed at a meeting at
which the individual is present and the individual does not
refuse, at the meeting, to be a director; or |
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(3) with respect to first directors, the designation is
otherwise valid under the Business Corporations Act. |
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14.3 Failure to Elect or
Appoint Directors |
If:
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(1) the Company fails to hold an annual general meeting,
and all the shareholders who are entitled to vote at an annual
general meeting fail to pass the unanimous resolution
contemplated by Article 10.2, on or before the date by
which the annual general meeting is required to be held under
the Business Corporations Act; or |
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(2) the shareholders fail, at the annual general meeting or
in the unanimous resolution contemplated by Article 10.2,
to elect or appoint any directors; |
then each director then in office continues to hold office until
the earlier of:
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(3) the date on which his or her successor is elected or
appointed; and |
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(4) the date on which he or she otherwise ceases to hold
office under the Business Corporations Act or these
Articles. |
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14.4 Places of Retiring
Directors Not Filled |
If, at any meeting of shareholders at which there should be an
election of directors, the places of any of the retiring
directors are not filled by that election, those retiring
directors who are not re-elected and who are asked by the newly
elected directors to continue in office will, if willing to do
so, continue in office to complete the number of directors for
the time being set pursuant to these Articles until further new
directors are elected at a meeting of shareholders convened for
that purpose. If any such election or continuance of directors
does not result in the election or continuance of the number of
directors for the time being set pursuant to these Articles, the
number of directors of the Company is deemed to be set at the
number of directors actually elected or continued in office.
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14.5 Directors May Fill
Casual Vacancies |
Any casual vacancy occurring in the board of directors may be
filled by the directors.
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14.6 Remaining Directors
Power to Act |
The directors may act notwithstanding any vacancy in the board
of directors, but if the Company has fewer directors in office
than the number set pursuant to these Articles as the quorum of
directors, the directors may only act for the purpose of
appointing directors up to that number or of summoning a meeting
of shareholders for the purpose of filling any vacancies on the
board of directors or, subject to the Business Corporations
Act, for any other purpose.
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14.7 Shareholders May Fill
Vacancies |
If the Company has no directors or fewer directors in office
than the number set pursuant to these Articles as the quorum of
directors, the shareholders may elect or appoint directors to
fill any vacancies on the board of directors.
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14.8 Additional
Directors |
Notwithstanding Articles 13.1 and 13.2, between annual
general meetings or unanimous resolutions contemplated by
Article 10.2, the directors may appoint one or more
additional directors, but the number of additional directors
appointed under this Article 14.8 must not at any time
exceed:
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(1) one-third of the number of first directors, if, at the
time of the appointments, one or more of the first directors
have not yet completed their first term of office; or |
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(2) in any other case, one-third of the number of the
current directors who were elected or appointed as directors
other than under this Article 14.8. |
Any director so appointed ceases to hold office immediately
before the next election or appointment of directors under
Article 14.1(1), but is eligible for re-election or
re-appointment.
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14.9 Ceasing to be a
Director |
A director ceases to be a director when:
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(1) the term of office of the director expires; |
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(2) the director dies; |
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(3) the director resigns as a director by notice in writing
provided to the Company or a lawyer for the Company; or |
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(4) the director is removed from office pursuant to
Articles 14.10 or 14.11. |
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14.10 Removal of Director by
Shareholders |
The Company may remove any director before the expiration of his
or her term of office by special resolution. In that event, the
shareholders may elect, or appoint by ordinary resolution, a
director to fill the resulting vacancy. If the shareholders do
not elect or appoint a director to fill the resulting vacancy
contemporaneously with the removal, then the directors may
appoint or the shareholders may elect, or appoint by ordinary
resolution, a director to fill that vacancy.
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14.11 Removal of Director by
Directors |
The directors may remove any director before the expiration of
his or her term of office if the director is convicted of an
indictable offence, or if the director ceases to be qualified to
act as a director of a company and does not promptly resign, and
the directors may appoint a director to fill the resulting
vacancy.
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15.1 Appointment of Alternate
Director |
Any director (an appointor) may by notice in writing
received by the Company appoint any person (an
appointee) who is qualified to act as a director to
be his or her alternate to act in his or her place at meetings
of the directors or committees of the directors at which the
appointor is not present unless (in the case of an appointee who
is not a director) the directors have reasonably disapproved the
appointment of such person as an alternate director and have
given notice to that effect to his or her appointor within a
reasonable time after the notice of appointment is received by
the Company.
Every alternate director so appointed is entitled to notice of
meetings of the directors and of committees of the directors of
which his or her appointor is a member and to attend and vote as
a director at any such meetings at which his or her appointor is
not present.
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15.3 Alternate for More Than
One Director Attending Meetings |
A person may be appointed as an alternate director by more than
one director, and an alternate director:
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(1) will be counted in determining the quorum for a meeting
of directors once for each of his or her appointors and, in the
case of an appointee who is also a director, once more in that
capacity; |
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(2) has a separate vote at a meeting of directors for each
of his or her appointors and, in the case of an appointee who is
also a director, an additional vote in that capacity; |
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(3) will be counted in determining the quorum for a meeting
of a committee of directors once for each of his or her
appointors who is a member of that committee and, in the case of
an appointee who is also a member of that committee as a
director, once more in that capacity; |
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(4) has a separate vote at a meeting of a committee of
directors for each of his or her appointors who is a member of
that committee and, in the case of an appointee who is also a
shareholder of that committee as a director, an additional vote
in that capacity. |
Every alternate director, if authorized by the notice appointing
him or her, may sign in place of his or her appointor any
resolutions to be consented to in writing.
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15.5 Alternate Director Not
an Agent |
Every alternate director is deemed not to be the agent of his or
her appointor.
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15.6 Revocation of
Appointment of Alternate Director |
An appointor may at any time, by notice in writing received by
the Company, revoke the appointment of an alternate director
appointed by him or her.
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15.7 Ceasing to be an
Alternate Director |
The appointment of an alternate director ceases when:
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(1) his or her appointor ceases to be a director and is not
promptly re-elected or re-appointed; |
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(2) the alternate director dies; |
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(3) the alternate director resigns as an alternate director
by notice in writing provided to the Company or a lawyer for the
Company; |
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(4) the alternate director ceases to be qualified to act as
a director; or |
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(5) his or her appointor revokes the appointment of the
alternate director. |
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15.8 Remuneration and
Expenses of Alternate Director |
The Company may reimburse an alternate director for the
reasonable expenses that would be properly reimbursed if he or
she were a director, and the alternate director is entitled to
receive from the Company such proportion, if any, of the
remuneration otherwise payable to the appointor as the appointor
may from time to time direct.
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16. |
Powers and Duties of
Directors |
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16.1 Powers of
Management |
The directors must, subject to the Business Corporations Act
and these Articles, manage or supervise the management of
the business and affairs of the Company and have the authority
to exercise all such powers of
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the Company as are not, by the Business Corporations Act
or by these Articles, required to be exercised by the
shareholders of the Company.
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16.2 Appointment of Attorney
of Company |
The directors may from time to time, by power of attorney or
other instrument, under seal if so required by law, appoint any
person to be the attorney of the Company for such purposes, and
with such powers, authorities and discretions (not exceeding
those vested in or exercisable by the directors under these
Articles and excepting the power to fill vacancies in the board
of directors, to remove a director, to change the membership of,
or fill vacancies in, any committee of the directors, to appoint
or remove officers appointed by the directors and to declare
dividends) and for such period, and with such remuneration and
subject to such conditions as the directors may think fit. Any
such power of attorney may contain such provisions for the
protection or convenience of persons dealing with such attorney
as the directors think fit. Any such attorney may be authorized
by the directors to sub-delegate all or any of the powers,
authorities and discretions for the time being vested in him or
her.
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17. |
Disclosure of Interest
of Directors |
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17.1 Obligation to Account
for Profits |
A director or senior officer who holds a disclosable interest
(as that term is used in the Business Corporations Act)
in a contract or transaction into which the Company has entered
or proposes to enter is liable to account to the Company for any
profit that accrues to the director or senior officer under or
as a result of the contract or transaction only if and to the
extent provided in the Business Corporations Act.
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17.2 Restrictions on Voting
by Reason of Interest |
A director who holds a disclosable interest in a contract or
transaction into which the Company has entered or proposes to
enter is not entitled to vote on any directors resolution
to approve that contract or transaction, unless all the
directors have a disclosable interest in that contract or
transaction, in which case any or all of those directors may
vote on such resolution.
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17.3 Interested Director
Counted in Quorum |
A director who holds a disclosable interest in a contract or
transaction into which the Company has entered or proposes to
enter and who is present at the meeting of directors at which
the contract or transaction is considered for approval may be
counted in the quorum at the meeting whether or not the director
votes on any or all of the resolutions considered at the meeting.
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17.4 Disclosure of Conflict
of Interest or Property |
A director or senior officer who holds any office or possesses
any property, right or interest that could result, directly or
indirectly, in the creation of a duty or interest that
materially conflicts with that individuals duty or
interest as a director or senior officer, must disclose the
nature and extent of the conflict as required by the Business
Corporations Act.
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17.5 Director Holding Other
Office in the Company |
A director may hold any office or place of profit with the
Company, other than the office of auditor of the Company, in
addition to his or her office of director for the period and on
the terms (as to remuneration or otherwise) that the directors
may determine.
No director or intended director is disqualified by his or her
office from contracting with the Company either with regard to
the holding of any office or place of profit the director holds
with the Company or as
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vendor, purchaser or otherwise, and no contract or transaction
entered into by or on behalf of the Company in which a director
is in any way interested is liable to be voided for that reason.
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17.7 Professional Services by
Director or Officer |
Subject to the Business Corporations Act, a director or
officer, or any person in which a director or officer has an
interest, may act in a professional capacity for the Company,
except as auditor of the Company, and the director or officer or
such person is entitled to remuneration for professional
services as if that director or officer were not a director or
officer.
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17.8 Director or Officer in
Other Corporations |
A director or officer may be or become a director, officer or
employee of, or otherwise interested in, any person in which the
Company may be interested as a shareholder or otherwise, and,
subject to the Business Corporations Act, the director or
officer is not accountable to the Company for any remuneration
or other benefits received by him or her as director, officer or
employee of, or from his or her interest in, such other person.
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18. |
Proceedings of
Directors |
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18.1 Meetings of
Directors |
The directors may meet together for the conduct of business,
adjourn and otherwise regulate their meetings as they think fit,
and meetings of the directors held at regular intervals may be
held at the place, at the time and on the notice, if any, as the
directors may from time to time determine.
Questions arising at any meeting of directors are to be decided
by a majority of votes and, in the case of an equality of votes,
the chair of the meeting does not have a second or casting vote.
The following individual is entitled to preside as chair at a
meeting of directors:
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(1) the chair of the board, if any; |
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(2) in the absence of the chair of the board, the
president, if any, if the president is a director; or |
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(3) any other director chosen by the directors if: |
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(a) neither the chair of the board nor the president, if a
director, is present at the meeting within 15 minutes after the
time set for holding the meeting; |
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(b) neither the chair of the board nor the president, if a
director, is willing to chair the meeting; or |
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(c) the chair of the board and the president, if a
director, have advised the secretary, if any, or any other
director, that they will not be present at the meeting. |
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18.4 Meetings by Telephone or
Other Communications Medium |
A director may participate in a meeting of the directors or of
any committee of the directors in person or by telephone if all
directors participating in the meeting, whether in person or by
telephone or other communications medium, are able to
communicate with each other. A director may participate in a
meeting of the directors or of any committee of the directors by
a communications medium other than telephone if all directors
participating in the meeting, whether in person or by telephone
or other communications medium, are able to communicate with
each other and if all directors who wish to participate in the
meeting agree to such participation. A director who participates
in a meeting in a manner contemplated by this Article 18.4
is
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deemed for all purposes of the Business Corporations Act
and these Articles to be present at the meeting and to have
agreed to participate in that manner.
A director may, and the secretary or an assistant secretary of
the Company, if any, on the request of a director must, call a
meeting of the directors at any time.
Other than for meetings held at regular intervals as determined
by the directors pursuant to Article 18.1, reasonable
notice of each meeting of the directors, specifying the place,
day and time of that meeting must be given to each of the
directors and the alternate directors by any method set out in
Article 24.1 or orally or by telephone.
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18.7 When Notice Not
Required |
It is not necessary to give notice of a meeting of the directors
to a director or an alternate director if:
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(1) the meeting is to be held immediately following a
meeting of shareholders at which that director was elected or
appointed, or is the meeting of the directors at which that
director is appointed; or |
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(2) the director or alternate director, as the case may be,
has waived notice of the meeting. |
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18.8 Meeting Valid Despite
Failure to Give Notice |
The accidental omission to give notice of any meeting of
directors to, or the non-receipt of any notice by, any director
or alternate director, does not invalidate any proceedings at
that meeting.
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18.9 Waiver of Notice of
Meetings |
Any director or alternate director may send to the Company a
document signed by him or her waiving notice of any past,
present or future meeting or meetings of the directors and may
at any time withdraw that waiver with respect to meetings held
after that withdrawal. After sending a waiver with respect to
all future meetings and until that waiver is withdrawn, no
notice of any meeting of the directors need be given to that
director and, unless the director otherwise requires by notice
in writing to the Company, to his or her alternate director, and
all meetings of the directors so held are deemed not to be
improperly called or constituted by reason of notice not having
been given to such director or alternate director.
The quorum necessary for the transaction of the business of the
directors may be set by the directors and, if not so set, is
deemed to be set at a majority of the directors in office or, if
the number of directors is set at one, is deemed to be set at
one director, and that director may constitute a meeting.
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18.11 Validity of Acts Where
Appointment Defective |
Subject to the Business Corporations Act, an act of a
director or officer is not invalid merely because of an
irregularity in the election or appointment or a defect in the
qualification of that director or officer.
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18.12 Consent Resolutions in
Writing |
A resolution of the directors or of any committee of the
directors consented to in writing by all of the directors
entitled to vote on it, whether by signed document, fax, email
or any other method of transmitting legibly recorded messages,
is as valid and effective as if it had been passed at a meeting
of the directors or of the committee of the directors duly
called and held. Such resolution may be in two or more
counterparts which together are deemed to constitute one
resolution in writing. A resolution passed in that manner is
effective on the date stated in the resolution or on the latest
date stated on any counterpart. A resolution of the
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directors or of any committee of the directors passed in
accordance with this Article 18.12 is deemed to be a
proceeding at a meeting of directors or of the committee of the
directors and to be as valid and effective as if it had been
passed at a meeting of the directors or of the committee of the
directors that satisfies all the requirements of the Business
Corporations Act and all the requirements of these Articles
relating to meetings of the directors or of a committee of the
directors.
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19. |
Executive and Other
Committees |
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19.1 Appointment and Powers
of Executive Committee |
The directors may, by resolution, appoint an executive committee
consisting of the director or directors that they consider
appropriate, and this committee has, during the intervals
between meetings of the board of directors, all of the
directors powers, except:
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(1) the power to fill vacancies in the board of directors; |
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(2) the power to remove a director; |
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(3) the power to change the membership of, or fill
vacancies in, any committee of the directors; and |
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(4) such other powers, if any, as may be set out in the
resolution or any subsequent directors resolution. |
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19.2 Appointment and Powers
of Other Committees |
The directors may, by resolution:
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(1) appoint one or more committees (other than the
executive committee) consisting of the director or directors
that they consider appropriate; |
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(2) delegate to a committee appointed under
paragraph (1) any of the directors powers,
except: |
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(a) the power to fill vacancies in the board of directors; |
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(b) the power to remove a director; |
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(c) the power to change the membership of, or fill
vacancies in, any committee of the directors; and |
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(d) the power to appoint or remove officers appointed by
the directors; and |
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(3) make any delegation referred to in
paragraph (2) subject to the conditions set out in the
resolution or any subsequent directors resolution. |
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19.3 Obligations of
Committees |
Any committee appointed under Articles 19.1 or 19.2, in the
exercise of the powers delegated to it, must:
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(1) conform to any rules that may from time to time be
imposed on it by the directors; and |
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(2) report every act or thing done in exercise of those
powers at such times as the directors may require. |
The directors may, at any time, with respect to a committee
appointed under Articles 19.1 or 19.2:
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(1) revoke or alter the authority given to the committee,
or override a decision made by the committee, except as to acts
done before such revocation, alteration or overriding; |
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(2) terminate the appointment of, or change the membership
of, the committee; and |
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(3) fill vacancies in the committee. |
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Subject to Article 19.3(1) and unless the directors
otherwise provide in the resolution appointing the committee or
in any subsequent resolution, with respect to a committee
appointed under Articles 19.1 or 19.2:
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(1) the committee may meet and adjourn as it thinks proper; |
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(2) the committee may elect a chair of its meetings but, if
no chair of a meeting is elected, or if at a meeting the chair
of the meeting is not present within 15 minutes after the time
set for holding the meeting, the directors present who are
members of the committee may choose one of their number to chair
the meeting; |
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(3) a majority of the members of the committee constitutes
a quorum of the committee; and |
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(4) questions arising at any meeting of the committee are
determined by a majority of votes of the members present, and in
case of an equality of votes, the chair of the meeting does not
have a second or casting vote. |
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20.1 Directors May Appoint
Officers |
The directors may, from time to time, appoint such officers, if
any, as the directors determine and the directors may, at any
time, terminate any such appointment.
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20.2 Functions, Duties and
Powers of Officers |
The directors may, for each officer:
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(1) determine the functions and duties of the officer; |
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(2) entrust to and confer on the officer any of the powers
exercisable by the directors on such terms and conditions and
with such restrictions as the directors think fit; and |
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(3) revoke, withdraw, alter or vary all or any of the
functions, duties and powers of the officer. |
No officer may be appointed unless that officer is qualified in
accordance with the Business Corporations Act. One person
may hold more than one position as an officer of the Company.
Any person appointed as the chair of the board or as the
managing director must be a director. Any other officer need not
be a director.
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20.4 Remuneration and Terms
of Appointment |
All appointments of officers are to be made on the terms and
conditions and at the remuneration (whether by way of salary,
fee, commission, participation in profits or otherwise) that the
directors thinks fit and are subject to termination at the
pleasure of the directors, and an officer may in addition to
such remuneration be entitled to receive, after he or she ceases
to hold such office or leaves the employment of the Company, a
pension or gratuity.
In this Article 21:
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(1) eligible penalty means a judgment, penalty
or fine awarded or imposed in, or an amount paid in settlement
of, an eligible proceeding; |
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(2) eligible proceeding means a legal
proceeding or investigative action, whether current, threatened,
pending or completed, in which a director, former director or
alternate director of the |
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Company (an eligible party) or any of the heirs and
legal personal representatives of the eligible party, by reason
of the eligible party being or having been a director or
alternate director of the Company: |
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(a) is or may be joined as a party; or |
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(b) is or may be liable for or in respect of a judgment,
penalty or fine in, or expenses related to, the proceeding; |
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(3) expenses has the meaning set out in the
Business Corporations Act. |
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21.2 Mandatory
Indemnification of Directors and Former Directors |
Subject to the Business Corporations Act, the Company
must indemnify a director, former director or alternate director
of the Company and his or her heirs and legal personal
representatives against all eligible penalties to which such
person is or may be liable, and the Company must, after the
final disposition of an eligible proceeding, pay the expenses
actually and reasonably incurred by such person in respect of
that proceeding. Each director and alternate director is deemed
to have contracted with the Company on the terms of the
indemnity contained in this Article 21.2.
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21.3 Indemnification of Other
Persons |
Subject to any restrictions in the Business Corporations
Act, the Company may indemnify any person.
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21.4 Non-Compliance with
Business Corporations Act |
The failure of a director, alternate director or officer of the
Company to comply with the Business Corporations Act or
these Articles does not invalidate any indemnity to which he or
she is entitled under this Part.
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21.5 Company May
Purchase Insurance |
The Company may purchase and maintain insurance for the benefit
of any person (or his or her heirs or legal personal
representatives) who:
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(1) is or was a director, alternate director, officer,
employee or agent of the Company; |
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(2) is or was a director, alternate director, officer,
employee or agent of a corporation at a time when the
corporation is or was an affiliate of the Company; |
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(3) at the request of the Company, is or was a director,
alternate director, officer, employee or agent of a corporation
or of a partnership, trust, joint venture or other
unincorporated entity; |
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(4) at the request of the Company, holds or held a position
equivalent to that of a director, alternate director or officer
of a partnership, trust, joint venture or other unincorporated
entity; |
against any liability incurred by him or her as such director,
alternate director, officer, employee or agent or person who
holds or held such equivalent position.
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22. |
Dividends and
Reserves |
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22.1 Payment of Dividends
Subject to Special Rights |
The provisions of this Article 22 are subject to the
rights, if any, of shareholders holding shares with special
rights as to dividends.
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22.2 Declaration of
Dividends |
Subject to the Business Corporations Act, the directors
may from time to time declare and authorize payment of such
dividends as they may deem advisable.
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The directors need not give notice to any shareholder of any
declaration under Article 22.2.
The directors may set a date as the record date for the purpose
of determining shareholders entitled to receive payment of a
dividend. The record date must not precede the date on which the
dividend is to be paid by more than two months. If no record
date is set, the record date is 5 p.m. on the date on which
the directors pass the resolution declaring the dividend.
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22.5 Manner of Paying
Dividend |
A resolution declaring a dividend may direct payment of the
dividend wholly or partly by the distribution of specific assets
or of fully paid shares or of bonds, debentures or other
securities of the Company, or in any one or more of those ways.
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22.6 Settlement of
Difficulties |
If any difficulty arises in regard to a distribution under
Article 22.5, the directors may settle the difficulty as
they deem advisable, and, in particular, may:
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(1) set the value for distribution of specific assets; |
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(2) determine that cash payments in substitution for all or
any part of the specific assets to which any shareholders are
entitled may be made to any shareholders on the basis of the
value so fixed in order to adjust the rights of all
parties; and |
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(3) vest any such specific assets in trustees for the
persons entitled to the dividend. |
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22.7 When Dividend
Payable |
Any dividend may be made payable on such date as is fixed by the
directors.
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22.8 Dividends to be Paid in
Accordance with Number of Shares |
All dividends on shares of any class or series of shares must be
declared and paid according to the number of such shares held.
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22.9 Receipt by Joint
Shareholders |
If several persons are joint shareholders of any share, any one
of them may give an effective receipt for any dividend, bonus or
other money payable in respect of the share.
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22.10 Dividend Bears No
Interest |
No dividend bears interest against the Company.
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22.11 Fractional
Dividends |
If a dividend to which a shareholder is entitled includes a
fraction of the smallest monetary unit of the currency of the
dividend, that fraction may be disregarded in making payment of
the dividend and that payment represents full payment of the
dividend.
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22.12 Payment of
Dividends |
Any dividend or other distribution payable in cash in respect of
shares may be paid by cheque, made payable to the order of the
person to whom it is sent, and mailed to the address of the
shareholder, or in the case of joint shareholders, to the
address of the joint shareholder who is first named on the
central securities
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register, or to the person and to the address the shareholder or
joint shareholders may direct in writing. The mailing of such
cheque will, to the extent of the sum represented by the cheque
(plus the amount of the tax required by law to be deducted),
discharge all liability for the dividend unless such cheque is
not paid on presentation or the amount of tax so deducted is not
paid to the appropriate taxing authority.
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22.13 Capitalization of
Surplus |
Notwithstanding anything contained in these Articles, the
directors may from time to time capitalize any surplus of the
Company and may from time to time issue, as fully paid, shares
or any bonds, debentures or other securities of the Company as a
dividend representing the surplus or any part of the surplus.
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23. |
Documents, Records and
Reports |
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23.1 Recording of Financial
Affairs |
The directors must cause adequate accounting records to be kept
to record properly the financial affairs and condition of the
Company and to comply with the Business Corporations Act.
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23.2 Inspection of Accounting
Records |
Unless the directors determine otherwise, or unless otherwise
determined by ordinary resolution, no shareholder of the Company
is entitled to inspect or obtain a copy of any accounting
records of the Company.
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24.1 Method of Giving
Notice |
Unless the Business Corporations Act or these Articles
provides otherwise, a notice, statement, report or other record
required or permitted by the Business Corporations Act or
these Articles to be sent by or to a person may be sent by any
one of the following methods:
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(1) mail addressed to the person at the applicable address
for that person as follows: |
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(a) for a record mailed to a shareholder, the
shareholders registered address; |
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(b) for a record mailed to a director or officer, the
prescribed address for mailing shown for the director or officer
in the records kept by the Company or the mailing address
provided by the recipient for the sending of that record or
records of that class; |
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(c) in any other case, the mailing address of the intended
recipient; |
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(2) delivery at the applicable address for that person as
follows, addressed to the person: |
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(a) for a record delivered to a shareholder, the
shareholders registered address; |
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(b) for a record delivered to a director or officer, the
prescribed address for delivery shown for the director or
officer in the records kept by the Company or the delivery
address provided by the recipient for the sending of that record
or records of that class; |
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(c) in any other case, the delivery address of the intended
recipient; |
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(3) sending the record by fax to the fax number provided by
the intended recipient for the sending of that record or records
of that class; |
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(4) sending the record by email to the email address
provided by the intended recipient for the sending of that
record or records of that class; |
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(5) physical delivery to the intended recipient. |
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24.2 Deemed Receipt of
Mailing |
A record that is mailed to a person by ordinary mail to the
applicable address for that person referred to in
Article 24.1 is deemed to be received by the person to whom
it was mailed on the day, Saturdays, Sundays and holidays
excepted, following the date of mailing.
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24.3 Certificate of
Sending |
A certificate signed by the secretary, if any, or other officer
of the Company or of any other corporation acting in that behalf
for the Company stating that a notice, statement, report or
other record was addressed as required by Article 24.1,
prepaid and mailed or otherwise sent as permitted by
Article 24.1 is conclusive evidence of that fact.
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24.4 Notice to Joint
Shareholders |
A notice, statement, report or other record may be provided by
the Company to the joint shareholders of a share by providing
the notice to the joint shareholder first named in the central
securities register in respect of the share.
A notice, statement, report or other record may be provided by
the Company to the persons entitled to a share in consequence of
the death, bankruptcy or incapacity of a shareholder by:
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(1) mailing the record, addressed to them: |
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(a) by name, by the title of the legal personal
representative of the deceased or incapacitated shareholder, by
the title of trustee of the bankrupt shareholder or by any
similar description; and |
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(b) at the address, if any, supplied to the Company for
that purpose by the persons claiming to be so entitled; or |
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(2) if an address referred to in paragraph (1)(b) has
not been supplied to the Company, by giving the notice in a
manner in which it might have been given if the death,
bankruptcy or incapacity had not occurred. |
Except as provided in Articles 25.2 and 25.3, the
Companys seal, if any, must not be impressed on any record
except when that impression is attested by the signatures of:
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(1) any two directors; |
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(2) any officer, together with any director; |
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(3) if the Company only has one director, that
director; or |
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(4) any one or more directors or officers or persons as may
be determined by the directors. |
For the purpose of certifying under seal a certificate of
incumbency of the directors or officers of the Company or a true
copy of any resolution or other document, despite
Article 25.1, the impression of the seal may be attested by
the signature of any director or officer.
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25.3 Mechanical Reproduction
of Seal |
The directors may authorize the seal to be impressed by third
parties on share certificates or bonds, debentures or other
securities of the Company as they may determine appropriate from
time to time. To
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enable the seal to be impressed on any share certificates or
bonds, debentures or other securities of the Company, whether in
definitive or interim form, on which facsimiles of any of the
signatures of the directors or officers of the Company are, in
accordance with the Business Corporations Act or these
Articles, printed or otherwise mechanically reproduced, there
may be delivered to the person employed to engrave, lithograph
or print such definitive or interim share certificates or bonds,
debentures or other securities one or more unmounted dies
reproducing the seal and the chair of the board or any senior
officer together with the secretary, treasurer,
secretary-treasurer, an assistant secretary, an assistant
treasurer or an assistant secretary-treasurer may in writing
authorize such person to cause the seal to be impressed on such
definitive or interim share certificates or bonds, debentures or
other securities by the use of such dies. Share certificates or
bonds, debentures or other securities to which the seal has been
so impressed are for all purposes deemed to be under and to bear
the seal impressed on them.
In this Article 26:
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(1) designated security means: |
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(a) a voting security of the Company; |
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(b) a security of the Company that is not a debt security
and that carries a residual right to participate in the earnings
of the Company or, on the liquidation or winding up of the
Company, in its assets; or |
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(c) a security of the Company convertible, directly or
indirectly, into a security described in
paragraph (a) or (b); |
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(2) security has the meaning assigned in the
Securities Act (British Columbia); |
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(3) voting security means a security of the
Company that: |
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(a) is not a debt security, and |
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(b) carries a voting right either under all circumstances
or under some circumstances that have occurred and are
continuing. |
Article 26.3 does not apply to the Company if and for so
long as it is a public company or a pre-existing reporting
company which has the Statutory Reporting Company Provisions as
part of its Articles or to which the Statutory Reporting Company
Provisions apply.
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SPECIAL MEETING
OF SHAREHOLDERS OF
BPI INDUSTRIES INC.
TO BE HELD AT the Companys headquarters,
30775 Bainbridge Road, Solon, Ohio
ON Thursday, February 9, 2006, AT 9:00 A.M.
I/ We being holder(s) of the Company hereby appoint:
James G.
Azlein, a Director of
the Company, or failing this person, George J. Zilich, a
Director of the Company, or in the place of the foregoing,
(print the
name)
,
as my/our proxyholder with full power of substitution to attend,
act and vote for and on my/our behalf in respect of all matters
that may properly come before the aforesaid meeting of the
holders of the Company (the Meeting) and at every
adjournment thereof, to the same extent and with the same powers
as if I/we were present at the said Meeting and at any
adjournment thereof.
I/ We hereby direct the proxyholder to vote the securities of
the Company recorded in my/our name as specified herein.
I/ We hereby revoke any proxy previously given to attend and
vote at said Meeting.
SECURITYHOLDER SIGN
HERE:
DATE
SIGNED:
THIS FORM MUST BE SIGNED AND DATED ABOVE.
Proxy
SEE IMPORTANT VOTING
INSTRUCTIONS ON REVERSE.
Resolutions
(For full details of each
resolution, please see the enclosed Information Circular)
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For |
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Against |
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Withhold |
1. To change the name of
the company to BPI Energy Holdings, Inc.
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N/A |
2. To increase the number
of shares of common stock that the company is authorized to
issue to 200 million shares.
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N/A |
3. To increase the quorum
necessary to transact business at a meeting of the
companys shareholders to the holders of
331/3%
of our shares of common stock present or represented at the
meeting.
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N/A |
4. To permit meetings of
our shareholders to be held outside of British Columbia,
Canada.
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N/A |
INSTRUCTIONS FOR
COMPLETION OF PROXY
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1. |
This Proxy is solicited by the Board of Directors and
management of the Company. |
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2. |
This form of proxy
(Instrument of Proxy) must be signed
by you, the holder, or by your attorney duly
authorized by you in writing, or, in the case of a corporation,
by a duly authorized officer or representative of the
corporation; and if executed by an attorney, officer, or
other duly appointed representative, the original or a
notarial copy of the instrument so empowering such person, or
such other documentation in support as shall be acceptable to
the Chairman of the Meeting, must accompany the Instrument of
Proxy.
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3. |
If this Instrument of
Proxy is not dated
in the space
provided, authority is hereby given by you, the holder, for the
proxyholder to date this proxy seven (7) calendar days
after the date on which it was mailed to you, the holder, by
Pacific Corporate Trust Company.
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4. |
A holder who wishes to
attend the Meeting and vote on the resolutions in person
may simply register
with the scrutineers before the Meeting begins.
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5. |
A holder who is not able
to attend the Meeting in person but wishes to vote on the
resolutions, may do
the following:
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(a) appoint
one of the management proxyholders
named on the
Instrument of Proxy, by leaving the wording appointing a nominee
as is (i.e. do not strike out the management proxyholders shown
and do not complete the blank space provided for the appointment
of an alternate proxyholder). Where no choice is specified by a
holder with respect to a resolution set out in the Instrument of
Proxy, a management appointee acting as a proxyholder will vote
the resolution as if the holder had specified an affirmative
vote; OR
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(b) appoint
another proxyholder,
who need not be a
holder of the Company, to vote according to the holders
instructions, by striking out the management proxyholder names
shown and inserting the name of the person you wish to represent
you at the meeting in the space provided for an alternate
proxyholder. If no choice is specified, the proxyholder has
discretionary authority to vote as the proxyholder sees fit.
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6. |
The securities represented by
this Instrument of Proxy will be voted or withheld from voting
in accordance with the instructions of the holder on any poll
of a resolution that
may be called for and, if the holder specifies a choice with
respect to any matter to be acted upon, the securities will be
voted accordingly, subject to applicable law. Further, if so
authorized by this Instrument of Proxy, the securities will be
voted by the appointed proxyholder with respect to any
amendments or variations of any of the resolutions set out on
the Instrument of Proxy or matters which may properly come
before the Meeting as the proxyholder in its sole discretion
sees fit, subject to applicable law.
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7. |
If a holder has submitted an
Instrument of Proxy, the holder may still attend the
Meeting and may vote in person. To do so, the holder
must record his/her attendance with the scrutineers before the
commencement of the Meeting and revoke, in writing, the prior
votes.
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8. |
To be represented at the
Meeting, proxies must be submitted no later than forty-eight
(48) hours, excluding Saturdays, Sundays and
holidays, prior to the time of the Meeting or adjournment
thereof. |
VOTING METHODS
INTERNET VOTING
24 Hours a Day, 7 days a
week
If a HOLDER ID and HOLDER CODE
appear on the face of this proxy in the address box, holders may
complete internet voting at
www.stocktronics.com/webvote.
To receive securityholder communications electronically in
the future, simply fill in your e-mail address at the bottom of
the Internet Voting page.
TELEPHONE VOTING
24 Hours a Day, 7 days a
week
If a HOLDER ID and HOLDER CODE
appear on the face of this proxy in the address box, holders may
complete telephone voting at 1-888-Tel-Vote
(1-888-835-8683). Please have this proxy in hand when
you call. A proxyholder that is not a management proxyholder
cannot be appointed by telephone.
RETURN YOUR PROXY BY MAIL OR FAX
to PACIFIC CORPORATE TRUST COMPANY
625 Howe Street,
10th
Floor, Vancouver, British Columbia, V6C 3B8. Fax number
604-689-8144.
Voting by mail or fax may be
the only method for holdings held in the name of a corporation
or holdings voted on behalf of another individual. Do not mail
the printed proxy or VIF if you have voted by the internet or
telephone.