Document:

exhibit_4-2.htm

EXHIBIT 4.2

 

	
Incorporation Number

	 	
BC0893483

	  	 	  
	
Effective Date

	 	
October 22, 2010

 

 

 

 

 

 

 

 

PROVINCE OF BRITISH COLUMBIA

 

BUSINESS CORPORATIONS ACT

 

 

 

ARTICLES

 

 

OF

 

 

PRETIUM RESOURCES INC.

 

 

 

 

 

 

 

 

 

 

 

Fasken Martineau DuMoulin LLP

Barristers & Solicitors

Canada 

 

  

  

  

TABLE OF CONTENTS

 

	  	  	
Page

	
PART 1 INTERPRETATION

	1
	 	 
	
1.1

	
Definitions

	
1

	
1.2

	
Business Corporations Act Definitions Apply

	
1

	
1.3

	
Interpretation Act Applies

	
1

	
1.4

	
Conflict in Definitions

	
1

	
1.5

	
Conflict Between Articles and Legislation

	
1

	 	 	 
	
PART 2 SHARES AND SHARE CERTIFICATES

	1
	 	 
	
2.1

	
Authorized Share Structure

	
1

	
2.2

	
Form of Share Certificate

	
1

	
2.3

	
Right to Share Certifi`cate or Acknowledgement

	
2

	
2.4

	
Sending of Share Certificate

	
2

	
2.5

	
Replacement of Worn Out or Defaced Certificate

	
2

	
2.6

	
Replacement of Lost, Stolen or Destroyed Certificate

	
2

	
2.7

	
Splitting Share Certificates

	
2

	
2.8

	
Certificate Fee

	
2

	
2.9

	
Recognition of Trusts

	
2

	 	 	 
	
PART 3 ISSUE OF SHARES

	3
	 	 
	
3.1

	
Directors Authorized to Issue Shares

	
3

	
3.2

	
Commissions and Discounts

	
3

	
3.3

	
Brokerage

	
3

	
3.4

	
Conditions of Issue

	
3

	
3.5

	
Warrants, Options and Rights

	
3

	
3.6

	
Fractional Shares

	
3

	 	 	 
	PART 4 SHARE REGISTERS	3
	 	 
	
4.1

	
Central Securities Register

	
3

	
4.2

	
Branch Registers

	
3

	
4.3

	
Appointment of Agents

	
3

	
4.4

	
Closing Register

	
4

	 	 	 
	
PART 5 SHARE TRANSFERS

	4
	 	 
	
5.1

	
Recording or Registering Transfer

	
4

	
5.2

	
Form of Instrument of Transfer

	
4

	
5.3

	
Transferor Remains Shareholder

	
4

	
5.4

	
Signing of Instrument of Transfer

	
4

	
5.5

	
Enquiry as to Title Not Required

	
4

	
5.6

	
Transfer Fee

	
4

	 	 	 
	
PART 6 TRANSMISSION OF SHARES

	4
	 	 
	
6.1

	
Legal Personal Representative Recognized on Death

	
4

	
6.2

	
Rights of Legal Personal Representative

	
5

 

 

 

  

i

  

 

	
PART 7 PURCHASE OF SHARES

	5
	 	 
	
7.1

	
Company Authorized to Purchase Shares

	
5

	
7.2

	
Purchase When Insolvent

	
5

	
7.3

	
Sale and Voting of Purchased Shares

	
5

	 	 	 
	
PART 8 BORROWING POWERS

	5
	 	 
	
8.1

	
Powers of Directors

	
5

	
8.2

	
Terms of Debt Instruments

	
5

	
8.3

	
Delegation by Directors

	
6

	 	 	 
	
PART 9 ALTERATIONS

	6
	 	 
	
9.1

	
Alteration of Authorized Share Structure

	
6

	
9.2

	
Special Rights and Restrictions

	
6

	
9.3

	
Change of Name

	
6

	
9.4

	
Alterations to Articles

	
6

	
9.5

	
Alterations to Notice of Articles

	
6

	 	 	 
	
PART 10 MEETINGS OF SHAREHOLDERS

	7
	 	 
	
10.1

	
Annual General Meetings

	
7

	
10.2

	
Resolution Instead of Annual General Meeting

	
7

	
10.3

	
Calling of Shareholder Meetings

	
7

	
10.4

	
Location of Shareholder Meetings

	
7

	
10.5

	
Notice for Meetings of Shareholders

	
7

	
10.6

	
Record Date for Notice

	
7

	
10.7

	
Record Date for Voting

	
7

	
10.8

	
Failure to Give Notice and Waiver of Notice

	
7

	
10.9

	
Notice of Special Business at Meetings of Shareholders

	
8

	 	 	 
	
PART 11 PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

	8
	 	 
	
11.1

	
Special Business

	
8

	
11.2

	
Special Majority

	
8

	
11.3

	
Quorum

	
8

	
11.4

	
One Shareholder May Constitute Quorum

	
9

	
11.5

	
Meetings by Telephone or Other Communications Medium

	
9

	
11.6

	
Other Persons May Attend

	
9

	
11.7

	
Requirement of Quorum

	
9

	
11.8

	
Lack of Quorum

	
9

	
11.9

	
Lack of Quorum at Succeeding Meeting

	
9

	
11.10

	
Chair

	
9

	
11.11

	
Selection of Alternate Chair

	
9

	
11.12

	
Adjournments

	
10

	
11.13

	
Notice of Adjourned Meeting

	
10

	
11.14

	
Decisions by Show of Hands or Poll

	
10

	
11.15

	
Declaration of Result

	
10

	
11.16

	
Motion Need Not Be Seconded

	
10

	
11.17

	
Casting Vote

	
10

	
11.18

	
Manner of Taking a Poll

	
10

	
11.19

	
Demand for a Poll on Adjournment

	
10

	
11.20

	
Chair Must Resolve Dispute

	
10

	
11.21

	
Casting of Votes

	
10

 

 

  

ii

  

 

	
11.22

	
Demand for Poll

	
10

	
11.23

	
Demand for a Poll Not to Prevent Continuation of Meeting

	
11

	
11.24

	
Retention of Ballots and Proxies

	
11

	 	 	 
	
PART 12 VOTES OF SHAREHOLDERS

	11
	 	 
	
12.1

	
Number of Votes by Shareholder or by Shares

	
11

	
12.2

	
Votes of Persons in Representative Capacity

	
11

	
12.3

	
Votes by Joint Shareholders

	
11

	
12.4

	
Legal Personal Representatives as Joint Shareholders

	
11

	
12.5

	
Representative of a Corporate Shareholder

	
11

	
12.6

	
Proxy Provisions Do Not Apply to All Companies

	
12

	
12.7

	
Appointment of Proxy Holder

	
12

	
12.8

	
Alternate Proxy Holders

	
12

	
12.9

	
When Proxy Holder Need Not Be Shareholder

	
12

	
12.10

	
Deposit of Proxy

	
12

	
12.11

	
Validity of Proxy Vote

	
12

	
12.12

	
Form of Proxy

	
13

	
12.13

	
Revocation of Proxy

	
13

	
12.14

	
Revocation of Proxy Must Be Signed

	
13

	
12.15

	
Production of Evidence of Authority to Vote

	
13

	 	 	 
	
PART 13 DIRECTORS

	13
	 	 
	
13.1

	
Number of Directors

	
13

	
13.2

	
Change in Number of Directors

	
14

	
13.3

	
Directors’ Acts Valid Despite Vacancy

	
14

	
13.4

	
Qualifications of Directors

	
14

	
13.5

	
Remuneration of Directors

	
14

	
13.6

	
Reimbursement of Expenses of Directors

	
14

	
13.7

	
Special Remuneration for Directors

	
14

	
13.8

	
Gratuity, Pension or Allowance on Retirement of Director

	
14

	 	 	 
	
PART 14 ELECTION AND REMOVAL OF DIRECTORS

	14
	 	 
	
14.1

	
Election at Annual General Meeting

	
14

	
14.2

	
Consent to be a Director

	
15

	
14.3

	
Failure to Elect or Appoint Directors

	
15

	
14.4

	
Places of Retiring Directors Not Filled

	
15

	
14.5

	
Directors May Fill Casual Vacancies

	
15

	
14.6

	
Remaining Directors Power to Act

	
15

	
14.7

	
Shareholders May Fill Vacancies

	
15

	
14.8

	
Additional Directors

	
16

	
14.9

	
Ceasing to be a Director

	
16

	
14.10

	
Removal of Director by Shareholders

	
16

	
14.11

	
Removal of Director by Directors

	
16

	 	 	 
	
PART 15 POWERS AND DUTIES OF DIRECTORS

	16
	 	 
	
15.1

	
Powers of Management

	
16

	
15.2

	
Appointment of Attorney of Company

	
16

	 	 	 
	
PART 16 DISCLOSURE OF INTEREST OF DIRECTORS

	17
	 	 
	
16.1

	
Obligation to Account for Profits

	
17

 

 

  

iii

  

 

	
16.2

	
Restrictions on Voting by Reason of Interest

	
17

	
16.3

	
Interested Director Counted in Quorum

	
17

	
16.4

	
Disclosure of Conflict of Interest or Property

	
17

	
16.5

	
Director Holding Other Office in the Company

	
17

	
16.6

	
No Disqualification

	
17

	
16.7

	
Professional Services by Director or Officer

	
17

	
16.8

	
Director or Officer in Other Corporations

	
17

	 	 	 
	
PART 17 PROCEEDINGS OF DIRECTORS

	17
	 	 
	
17.1

	
Meetings of Directors

	
17

	
17.2

	
Voting at Meetings

	
17

	
17.3

	
Chair of Meetings

	
17

	
17.4

	
Meetings by Telephone or Other Communications Medium

	
18

	
17.5

	
Calling of Meetings

	
18

	
17.6

	
Notice of Meetings

	
18

	
17.7

	
When Notice Not Required

	
18

	
17.8

	
Meeting Valid Despite Failure to Give Notice

	
18

	
17.9

	
Waiver of Notice of Meetings

	
18

	
17.10

	
Quorum

	
18

	
17.11

	
Validity of Acts Where Appointment Defective

	
18

	
17.12

	
Consent Resolutions in Writing

	
19

	 	 	 
	
PART 18 EXECUTIVE AND OTHER COMMITTEES

	19
	 	 
	
18.1

	
Appointment and Powers of Executive Committee

	
19

	
18.2

	
Appointment and Powers of Other Committees

	
19

	
18.3

	
Obligations of Committee

	
19

	
18.4

	
Powers of Board

	
19

	
18.5

	
Committee Meetings

	
20

	 	 	 
	
PART 19 OFFICERS

	20
	 	 
	
19.1

	
Appointment of Officers

	
20

	
19.2

	
Functions, Duties and Powers of Officers

	
20

	
19.3

	
Qualifications

	
20

	
19.4

	
Remuneration

	
20

	 	 	 
	
PART 20 INDEMNIFICATION

	20
	 	 
	
20.1

	
Definitions

	
20

	
20.2

	
Mandatory Indemnification of Directors and Former Directors

	
21

	
20.3

	
Indemnification of Other Persons

	
21

	
20.4

	
Non-Compliance with Business Corporations Act

	
21

	
20.5

	
Company May Purchase Insurance

	
21

	 	 	 
	
PART 21 DIVIDENDS

	21
	 	 
	
21.1

	
Payment of Dividends Subject to Special Rights

	
21

	
21.2

	
Declaration of Dividends

	
21

	
21.3

	
No Notice Required

	
22

	
21.4

	
Record Date

	
22

	
21.5

	
Manner of Paying Dividend

	
22

	
21.6

	
Settlement of Difficulties

	
22

	
21.7

	
When Dividend Payable

	
22

 

 

  

iv

  

 

	
21.8

	
Dividends to be Paid in Accordance with Number of Shares

	
22

	
21.9

	
Receipt by Joint Shareholders

	
22

	
21.10

	
Dividend Bears No Interest

	
22

	
21.11

	
Fractional Dividends

	
22

	
21.12

	
Payment of Dividends

	
22

	
21.13

	
Capitalization of Surplus

	
22

	 	 	 
	
PART 22 DOCUMENTS, RECORDS AND REPORTS

	23
	 	 
	
22.1

	
Recording of Financial Affairs

	
23

	
22.2

	
Inspection of Accounting Records

	
23

	
22.3

	
Remuneration of Auditors

	
23

	 	 	 
	
PART 23 NOTICES

	23
	 	 
	
23.1

	
Method of Giving Notice

	
23

	
23.2

	
Deemed Receipt

	
24

	
23.3

	
Certificate of Sending

	
24

	
23.4

	
Notice to Joint Shareholders

	
24

	
23.5

	
Notice to Trustees

	
24

	 	 	 
	
PART 24 SEAL

	24
	 	 
	
24.1

	
Who May Attest Seal

	
24

	
24.2

	
Sealing Copies

	
24

	
24.3

	
Mechanical Reproduction of Seal

	
25

	 	 	 
	
PART 25 PROHIBITIONS

	25
	 	 
	
25.1

	
Definitions

	
25

	
25.2

	
Application

	
25

	
25.3

	
Consent Required for Transfer of Shares or Designated Securities

	
25

	 	 	 
	
PART 26 SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO THE COMMON SHARES

	25
	 	 
	
26.1

	
Voting

	
25

	
26.2

	
Dividends

	
26

	
26.3

	
Dissolution

	
26

	 	 	 
	
PART 27 SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO THE PREFERRED SHARES

	26
	 	 
	
27.1

	
Issuable in Series

	
26

	 	 	 
	
PART 28 SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO THE FIRST SERIES OF PREFERRED SHARES

	27
	 	 
	
28.1

	
Definitions

	
27

	
28.2

	
Non-Cumulative Dividends

	
27

	
28.3

	
Priority on Winding-Up

	
27

	
28.4

	
Retraction at Option of Holder

	
28

	
28.5

	
Voting

	
29

	
28.6

	
Conversion of Series A Preferred shares

	
29

	  	  	  
	
Part 28 as Amended and Restated as of November 4, 2010

	  

 

  

v

  

PROVINCE OF BRITISH COLUMBIA

 

BUSINESS CORPORATIONS ACT

 

ARTICLES

OF

PRETIUM RESOURCES INC.

(the “Company”)

 

 

	
Incorporation Number

	
BC0893483

	  	  
	
Effective Date

	
October 22, 2010

                              

 

PART 1

INTERPRETATION

 

1.1   Definitions.  Without limiting Article 1.2, in these articles, unless the context requires otherwise:

 

“adjourned meeting” means the meeting to which a meeting is adjourned under Article 11.8 or 11.12;

 

“board”, “board of directors” and “directors” mean the directors or sole director of the Company for the time being and include a committee or other delegate, direct or indirect, of the directors or director;

 

“Business Corporations Act” means the Business Corporations Act, S.B.C. 2002, c.57 as amended, restated or replaced from time to time, and includes its regulations;

 

“Interpretation Act” means the Interpretation Act, R.S.B.C. 1996, c. 238;

 

“legal personal representative” means the personal or other legal representative of the shareholder;

 

“seal” means the seal of the Company, if any.

 

1.2   Business Corporations Act Definitions Apply.  The definitions in the Business Corporations Act apply to these articles.

 

1.3   Interpretation Act Applies.  The Interpretation Act applies to the interpretation of these articles as if these articles were an enactment.

 

1.4   Conflict in Definitions.  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.

 

1.5   Conflict Between Articles and Legislation.  If there is a conflict between these articles and the Business Corporations Act, the Business Corporations Act will prevail.

 

PART 2

SHARES AND SHARE CERTIFICATES

 

2.1   Authorized Share Structure.  The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.

 

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.

 

 

  

1

  

 

2.3   Right to Share Certificate or Acknowledgement.  Each shareholder is entitled, without charge, to:

 

	
  

	
(a)

	
one certificate representing the share or shares of each class or series of shares registered in the shareholder’s name; or

 

	
  

	
(a)

	
one certificate representing the share or shares of each class or series of shares registered in the shareholder’s name; or

 

	
  

	
(b)

	
a non-transferable written acknowledgment of the shareholder’s 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 or acknowledgement and delivery of a share certificate or acknowledgment for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.  The Company may refuse to register more than three persons as joint holders of a share.

 

2.4   Sending of Share Certificate.  Any share certificate or non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate to which a shareholder is entitled may be sent to the shareholder by mail at the shareholders’ registered address, and neither the Company nor any agent is liable for any loss to the shareholder because the share certificate or acknowledgment sent is lost in the mail or stolen.

 

2.5   Replacement of Worn Out or Defaced Certificate.  If the board of directors, or any officer or agent designated by the directors, is satisfied that a share certificate is worn out or defaced, they must, on production to them of the certificate and on such other terms, if any, as they think fit:

 

	
  

	
(a)

	
order the certificate to be cancelled; and

 

	
  

	
(b)

	
issue a replacement share certificate.

 

2.6   Replacement of Lost, Stolen or Destroyed Certificate.  If a share certificate is lost, stolen or destroyed, a replacement share certificate must be issued to the person entitled to that certificate if the board of directors, or any officer or agent designated by the directors, receives:

 

	
  

	
(a)

	
proof satisfactory to them that the certificate is lost, stolen or destroyed; and

 

	
  

	
(b)

	
any indemnity the board of directors, or any officer or agent designated by the directors, considers adequate.

 

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 shareholder’s name two or more certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the certificate so surrendered, the Company must cancel the surrendered certificate and issue replacement share certificates in accordance with that request.  The Company may refuse to issue a certificate with respect to a fraction of a share.

 

2.8   Certificate Fee.  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.

 

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.

 

 

  

2

  

 

PART 3

ISSUE OF SHARES

 

3.1   Directors Authorized to Issue Shares.  Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the directors may issue, allot, sell or otherwise dispose of the unissued shares, and previously issued shares that are subject to reissuance or held by the Company, whether with par value or without par value, 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 may be issued) that the directors, in their absolute discretion, may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

 

3.2   Commissions and Discounts.  The directors may, at any time, authorize the Company to 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.

 

3.3   Brokerage.  The directors may authorize the Company to pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

 

3.4   Conditions of Issue.  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:

 

	
  

	
(a)

	
consideration is provided to the Company for the issue of the share by one or more of the following:

 

	
  

	
(i)

	
past services performed for the Company;

 

	
  

	
(ii)

	
property; or

 

	
  

	
(iii)

	
money; and

 

	
  

	
(b)

	
the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

 

3.5   Warrants, Options and Rights.  Subject to the Business Corporations Act, the Company may issue warrants, options and rights upon such terms and conditions as the directors determine, which 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.

 

3.6   Fractional Shares.  A person holding a fractional share does not have, in relation to the fractional share, the rights of a shareholder in proportion to the fraction of the share held.

 

PART 4

SHARE REGISTERS

 

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.

 

4.2   Branch Registers.  In addition to the central securities register, the Company may maintain branch securities registers.

 

4.3   Appointment of Agents.  The directors may, subject to the Business Corporations Act, appoint an agent to maintain the central securities register and any branch securities registers.  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.

 

 

  

3

  

 

4.4   Closing Register.  The Company must not at any time close its central securities register.

 

PART 5

SHARE TRANSFERS

 

5.1   Recording or Registering Transfer.  Except to the extent that the Business Corporations Act otherwise provides, a transfer of a share of the Company must not be recorded or registered unless:

 

	
  

	
(a)

	
a duly signed instrument of transfer in respect of the share has been received by the Company;

 

	
  

	
(b)

	
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

 

	
  

	
(c)

	
if a non-transferable written acknowledgment of the shareholder’s 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.

 

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 Company’s share certificates or in any other form that may be approved by the directors from time to time.

 

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.

 

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, if no number is specified, all the shares represented by share certificates deposited with the instrument of transfer:

 

	
  

	
(a)

	
in the name of the person named as transferee in that instrument of transfer; or

 

	
  

	
(b)

	
if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the share certificate is deposited for the purpose of having the transfer registered.

 

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.

 

5.6   Transfer Fee.  There must be paid to the Company, in relation to the registration of any transfer, the amount determined by the directors.

 

PART 6

TRANSMISSION OF SHARES

 

6.1   Legal Personal Representative Recognized on Death. In the 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 shareholder’s 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.

 

 

  

4

  

  

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 the documents required by the Business Corporations Act and the directors have been deposited with the Company.

 

PART 7

PURCHASE OF SHARES

 

7.1   Company Authorized to Purchase Shares.  Subject to the special rights and restrictions attached to any class or series of shares 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 on the terms specified in such resolution.

 

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:

 

	
  

	
(a)

	
the Company is insolvent; or

 

	
  

	
(b)

	
making the payment or providing the consideration would render the Company insolvent.

 

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:

 

	
  

	
(a)

	
is not entitled to vote the share at a meeting of its shareholders;

 

	
  

	
(b)

	
must not pay a dividend in respect of the share; and

 

	
  

	
(c)

	
must not make any other distribution in respect of the share.

 

PART 8

BORROWING POWERS

 

8.1   Powers of Directors.  The Company, if authorized by the directors, may from time to time:

 

	
  

	
(a)

	
borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that the directors consider appropriate;

 

	
  

	
(b)

	
issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person;

 

	
  

	
(c)

	
guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

 

	
  

	
(d)

	
mortgage or charge, whether by way of specific or floating charge, or give other security on the whole or any part of the present and future undertaking of the Company.

 

8.2   Terms of Debt Instruments.  Any bonds, debentures or other debt obligations of the Company may be issued at a discount, premium or otherwise, and with any special privileges on the redemption, surrender, drawing, allotment of or conversion into or exchange for shares or other securities, attending and voting at general meetings of the Company, appointment of directors or otherwise, and may by their terms be assignable free from any equities between the Company and the person to whom they were issued or any subsequent holder, all as the directors may determine.

 

 

  

5

  

 

8.3   Delegation by Directors.  For greater certainty, the powers of the directors under this Part 8 may be exercised by a committee or other delegate, direct or indirect, of the board authorized to exercise such powers.

 

PART 9

ALTERATIONS

 

9.1   Alteration of Authorized Share Structure.  Subject to Article 9.2 and the Business Corporations Act, the Company may by special resolution:

 

	
  

	
(a)

	
create one or more classes or series of shares or, if none of the shares of a class or series of shares is allotted or issued, eliminate that class or series of shares;

 

	
  

	
(b)

	
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;

 

	
  

	
(c)

	
subdivide or consolidate all or any of its unissued, or fully paid issued, shares;

 

	
  

	
(d)

	
if the Company is authorized to issue shares of a class of shares with par value:

 

	
  

	
(i)

	
decrease the par value of those shares; or

 

	
  

	
(ii)

	
if none of the shares of that class of shares is allotted or issued, increase the par value of those shares;

 

	
  

	
(e)

	
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;

 

	
  

	
(f)

	
alter the identifying name of any of its shares; or

 

	
  

	
(g)

	
otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act.

 

9.2   Special Rights and Restrictions.  Subject to the Business Corporations Act, the Company may by special resolution:

 

	
  

	
(a)

	
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; or

 

	
  

	
(b)

	
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.

 

9.3   Change of Name.  The Company may by directors resolution authorize an alteration of its Notice of Articles in order to change its name.

 

9.4   Alterations to Articles.  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.

 

9.5   Alterations to Notice of Articles.  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 its Notice of Articles.

 

 

  

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PART 10

MEETINGS OF SHAREHOLDERS

 

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, for the first time, not more than 18 months after the date on which it was recognized, and after its first annual reference date, at least once in each calendar year and not more than 15 months after the annual reference date for the preceding calendar year at such date, time and location as may be determined by the directors.

 

10.2         Resolution Instead of Annual General Meeting.  If all of 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 Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

 

10.3         Calling of Shareholder Meetings.  The directors may, whenever they think fit, call a meeting of shareholders.

 

10.4         Location of Shareholder Meetings.  The directors may, by director’s resolution, approve a location outside of British Columbia for the holding of a meeting of shareholders.

 

10.5         Notice for Meetings of Shareholders.  The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, 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:

 

	
  

	
(a)

	
if and for so long as the Company is a public company, 21 days; and

 

	
  

	
(b)

	
otherwise, 10 days.

 

10.6         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:

 

	
  

	
(a)

	
if and for so long as the Company is a public company, 21 days; and

 

	
  

	
(b)

	
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.

 

10.7         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.

 

10.8         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 receive notice does not invalidate any proceedings at that meeting.  Any person entitled to receive 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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10.9         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:

 

	
  

	
(a)

	
state the general nature of the special business; and

 

	
  

	
(b)

	
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:

 

	
  

	
(i)

	
at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and

 

	
  

	
(ii)

	
during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

 

PART 11

PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

 

11.1         Special Business.  At a meeting of shareholders, the following business is special business:

 

	
  

	
(a)

	
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;

 

	
  

	
(b)

	
at an annual general meeting, all business is special business except for the following:

 

	
  

	
(i)

	
business relating to the conduct of, or voting at, the meeting;

 

	
  

	
(ii)

	
consideration of any financial statements of the Company presented to the meeting;

 

	
  

	
(iii)

	
consideration of any reports of the directors or auditor;

 

	
  

	
(iv)

	
the setting or changing of the number of directors;

 

	
  

	
(v)

	
the election or appointment of directors;

 

	
  

	
(vi)

	
the appointment of an auditor;

 

	
  

	
(vii)

	
business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution; and

 

	
  

	
(viii)

	
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.

 

11.2         Special Majority.  The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

 

11.3         Quorum.  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 two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

 

  

8

  

 

11.4         One Shareholder May Constitute Quorum.  If there is only one shareholder entitled to vote at a meeting of shareholders:

 

	
  

	
(a)

	
the quorum is one person who is, or who represents by proxy, that shareholder; and

 

	
  

	
(b)

	
that shareholder, present in person or by proxy, may constitute the meeting.

 

11.5         Meetings by Telephone or Other Communications Medium.  A shareholder or proxy holder who is entitled to participate in, including vote at, a meeting of shareholders may participate in person or by telephone or other communications medium if all shareholders and proxy holders participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other.  A shareholder who participates in a meeting in a manner contemplated by this Article 11.5 is 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.  Nothing in this Article 11.5 obligates the Company to take any action or provide any facility to permit or facilitate the use of any communications mediums at a meeting of shareholders.

 

11.6         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.

 

11.7         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.

 

11.8         Lack of Quorum.  If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

 

	
  

	
(a)

	
in the case of a general meeting convened by requisition of shareholders, the meeting is dissolved; and

 

	
  

	
(b)

	
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, or at such other date, time or location as the chair specifies on the adjournment.

 

11.9         Lack of Quorum at Succeeding Meeting.  If, at the meeting to which the first meeting referred to in Article 11.8(b) 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.

 

11.10 Chair.  The following individual is entitled to preside as chair at a meeting of shareholders:

 

	
  

	
(a)

	
the chair of the board, if any; and

 

	
  

	
(b)

	
if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

 

11.11        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.

 

  

9

  

11.12       Adjournments.  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.

 

11.13       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.

 

11.14       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.

 

11.15       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 11.4, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

 

11.16       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.

 

11.17       Casting Vote.  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.

 

11.18       Manner of Taking a Poll.  Subject to Article 11.19, if a poll is duly demanded at a meeting of shareholders:

 

	
  

	
(a)

	
the poll must be taken:

 

	
  

	
(i)

	
at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and

 

	
  

	
(ii)

	
in the manner, at the time and at the place that the chair of the meeting directs;

 

	
  

	
(b)

	
the result of the poll is deemed to be a resolution of and passed at the meeting at which the poll is demanded; and

 

	
  

	
(c)

	
the demand for the poll may be withdrawn by the person who demanded it.

 

11.19       Demand for a Poll on Adjournment.  A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

 

11.20       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.

 

11.21       Casting of Votes.  On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

 

11.22       Demand for Poll.  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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11.23       Demand for a Poll Not to Prevent Continuation 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.

 

11.24       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 statutory business hours by any shareholder or proxy holder entitled to vote at the meeting.  At the end of such three month period, the Company may destroy such ballots and proxies.

 

PART 12

VOTES OF SHAREHOLDERS

 

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 registered holders of shares under Article 12.3:

 

	
  

	
(a)

	
on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote at the meeting has one vote, and

 

	
  

	
(b)

	
on a poll, every shareholder entitled to vote 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.

 

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 the legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

 

12.3       Votes by Joint Shareholders.  If there are joint shareholders registered in respect of any share:

 

	
  

	
(a)

	
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

 

	
  

	
(b)

	
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.

 

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.

 

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:

 

	
  

	
(a)

	
for that purpose, the instrument appointing a representative must:

 

	
  

	
(i)

	
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 or proxies or, if no number is specified, two days before the day set for the holding of the meeting; or

 

	
  

	
(ii)

	
be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting; and

 

  

11

  

 

	
  

	
(b)

	
if a representative is appointed under this Article 12.5:

 

	
  

	
(i)

	
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

 

	
  

	
(ii)

	
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.

 

12.6       Proxy Provisions Do Not Apply to All Companies.  Articles 12.7 and 12.9 do not apply to the Company if and for so long as it is a public company.

 

12.7       Appointment of Proxy Holder.  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.

 

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.

 

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:

 

	
  

	
(a)

	
the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;

 

	
  

	
(b)

	
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

 

	
  

	
(c)

	
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 respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

 

12.10       Deposit of Proxy.  A proxy for a meeting of shareholders must:

 

	
  

	
(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, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

 

	
  

	
(b)

	
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.

 

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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(a)

	
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

 

	
  

	
(b)

	
by the chair of the meeting, before the vote is taken.

 

12.12       Form of Proxy.  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”)

 

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 to be held on [month, day, year] and at any adjournment of that meeting.

 

Number of shares in respect of which this proxy is given (if no number is specified, then this proxy is given in respect of all shares registered in the name of the shareholder):  ____________________

 

Signed this ____ day of __________, ____.

 

____________________________

Signature of shareholder

 

____________________________

Name of shareholder—printed

 

12.13       Revocation of Proxy.  Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

 

	
  

	
(a)

	
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

 

	
  

	
(b)

	
provided, at the meeting, to the chair of the meeting.

 

12.14       Revocation of Proxy Must Be Signed.  An instrument referred to in Article 12.13 must be signed as follows:

 

	
  

	
(a)

	
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; or

 

	
  

	
(b)

	
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.

 

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.

 

PART 13

DIRECTORS

 

13.1          Number of Directors.  The number of directors, excluding additional directors appointed under Article 14.8, is set at:

 

  

13

  

	
  

	
(a)

	
if the Company is a public company, the greater of three and the most recently set of:

 

	
  

	
(i)

	
the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

 

	
  

	
(ii)

	
the number of directors set under Article 14.4;

 

	
  

	
(b)

	
if the Company is not a public company, the most recently set of:

 

	
  

	
(i)

	
the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

 

	
  

	
(ii)

	
the number of directors set under Article 14.4.

 

13.2         Change in Number of Directors.  If the number of directors is set under Articles 13.1(a)(i) or 13.1(b)(i):

 

	
  

	
(a)

	
the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;

 

	
  

	
(b)

	
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.

 

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.

 

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.

 

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.

 

13.6         Reimbursement of Expenses of Directors.  The Company must reimburse each director for the reasonable expenses that he or she may incur in his or her capacity as director in and about the business of the Company.

 

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 Company’s 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.

 

13.8         Gratuity, Pension or Allowance on Retirement of Director.  Unless otherwise determined by ordinary resolution, the directors may authorize the Company to 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.

 

PART 14

ELECTION AND REMOVAL OF DIRECTORS

 

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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(a)

	
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; and

 

	
  

	
(b)

	
all the directors cease to hold office immediately before the election or appointment of directors under paragraph (a), but are eligible for re-election or re-appointment.

 

14.2         Consent to be a Director.  No election, appointment or designation of an individual as a director is valid unless:

 

	
  

	
(a)

	
that individual consents to be a director in the manner provided for in the Business Corporations Act; or

 

	
  

	
(b)

	
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.

 

14.3         Failure to Elect or Appoint Directors.  If:

 

	
  

	
(a)

	
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

 

	
  

	
(b)

	
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:

 

	
  

	
(c)

	
the date on which his or her successor is elected or appointed; and

 

	
  

	
(d)

	
the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

 

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.

 

14.5         Directors May Fill Casual Vacancies.  Any casual vacancy occurring in the board of directors may be filled by the directors.

 

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.

 

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:

 

	
  

	
(a)

	
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

 

	
  

	
(b)

	
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(a), but is eligible for re-election or re-appointment.

 

14.9         Ceasing to be a Director.  A director ceases to be a director when:

 

	
  

	
(a)

	
the term of office of the director expires;

 

	
  

	
(b)

	
the director dies;

 

	
  

	
(c)

	
the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or

 

	
  

	
(d)

	
the director is removed from office pursuant to Articles 14.10 or 14.11.

 

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.

 

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.

 

PART 15

POWERS AND DUTIES OF DIRECTORS

 

15.1         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 the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

 

15.2         Appointment of Attorney of Company.  The directors exclusively 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.

 

  

16

  

 

PART 16

DISCLOSURE OF INTEREST OF DIRECTORS

 

16.1         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.

 

16.2         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.

 

16.3         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.

 

16.4         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 individual’s 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.

 

16.5         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.

 

16.6         No Disqualification.  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 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.

 

16.7         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.

 

16.8         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.

 

PART 17

PROCEEDINGS OF DIRECTORS

 

17.1         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 board held at regular intervals may be held at the place, at the time and on the notice, if any, that the board may by resolution from time to time determine.

 

17.2         Voting at Meetings.  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.

 

17.3         Chair of Meetings.  Meetings of directors are to be chaired by:

 

  

17

  

 

	
  

	
(a)

	
the chair of the board, if any;

 

	
  

	
(b)

	
in the absence of the chair of the board, the president, if any, if the president is a director; or

 

	
  

	
(c)

	
any other director chosen by the directors if:

 

	
  

	
(i)

	
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;

 

	
  

	
(ii)

	
neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

 

	
  

	
(iii)

	
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.

 

17.4         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 or other communications medium 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 who participates in a meeting in a manner contemplated by this Article 17.4 is 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.

 

17.5         Calling of Meetings.  A director may, and the secretary or an assistant secretary, if any, on the request of a director must, call a meeting of the directors at any time.

 

17.6         Notice of Meetings.  Other than for meetings held at regular intervals as determined by the directors pursuant to Article 17.1, 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 by any method set out in Article 23.1 or orally or by telephone.

 

17.7         When Notice Not Required.  It is not necessary to give notice of a meeting of the directors to a director if:

 

	
  

	
(a)

	
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

 

	
  

	
(b)

	
the director has waived notice of the meeting.

 

17.8         Meeting Valid Despite Failure to Give Notice.  The accidental omission to give notice of any meeting of directors to any director, or the non-receipt of any notice by any director, does not invalidate any proceedings at that meeting.

 

17.9         Waiver of Notice of Meetings.  Any director may file with the Company a document signed by the director waiving notice of any past, present or future meeting of the directors and may at any time withdraw that waiver with respect to meetings of the directors held after that withdrawal.  After sending a waiver with respect to all future meetings of the directors, and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that 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.

 

17.10       Quorum.  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 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.

 

17.11       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.

 

  

18

  

17.12       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, if no date is stated in the resolution, on the latest date stated on any counterpart.  A resolution of the directors or of any committee of the directors passed in accordance with this Article 17.12 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.

 

PART 18

EXECUTIVE AND OTHER COMMITTEES

 

18.1         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:

 

	
  

	
(a)

	
the power to fill vacancies in the board of directors;

 

	
  

	
(b)

	
the power to remove a director;

 

	
  

	
(c)

	
the power to change the membership of, or fill vacancies in, any committee of the directors; and

 

	
  

	
(d)

	
such other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.

 

18.2         Appointment and Powers of Other Committees.  The directors may, by resolution,

 

	
  

	
(a)

	
appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;

 

	
  

	
(b)

	
delegate to a committee appointed under paragraph (a) any of the directors’ powers, except:

 

	
  

	
(i)

	
the power to fill vacancies in the board of directors;

 

	
  

	
(ii)

	
the power to remove a director;

 

	
  

	
(iii)

	
the power to change the membership of, or fill vacancies in, any committee of the board, and

 

	
  

	
(iv)

	
the power to appoint or remove officers appointed by the board; and

 

	
  

	
(c)

	
make any delegation referred to in paragraph (b) subject to the conditions set out in the resolution.

 

18.3         Obligations of Committee.  Any committee appointed under Articles 18.1 or 18.2, in the exercise of the powers delegated to it, must

 

	
  

	
(a)

	
conform to any rules that may from time to time be imposed on it by the directors; and

 

	
  

	
(b)

	
report every act or thing done in exercise of those powers as the directors may require.

 

18.4         Powers of Board.  The directors may, at any time, with respect to a committee appointed under Articles 18.1 or 18.2:

 

  

19

  

 

	
  

	
(a)

	
revoke or alter the authority given to a committee, or override a decision made by a committee, except as to acts done before such revocation, alteration or overriding;

 

	
  

	
(b)

	
terminate the appointment of, or change the membership of, a committee; and

 

	
  

	
(c)

	
fill vacancies on a committee.

 

18.5         Committee Meetings.  Subject to Article 18.3(a) 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 18.1 or 18.2:

 

	
  

	
(a)

	
the committee may meet and adjourn as it thinks proper;

 

	
  

	
(b)

	
the committee may elect a chair of its meetings but, if no chair of the meeting is elected, or if at any 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;

 

	
  

	
(c)

	
a majority of the members of a directors’ committee constitutes a quorum of the committee; and

 

	
  

	
(d)

	
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 has no second or casting vote.

 

PART 19

OFFICERS

 

19.1         Appointment of 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.

 

19.2         Functions, Duties and Powers of Officers.  The directors may, for each officer:

 

	
  

	
(a)

	
determine the functions and duties of the officer;

 

	
  

	
(b)

	
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

 

	
  

	
(c)

	
revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

 

19.3         Qualifications.  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 officer need not be a director.

 

19.4         Remuneration.  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 think 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.

 

PART 20

INDEMNIFICATION

 

20.1         Definitions.  In this Part 20:

 

  

20

  

 

	
  

	
(a)

	
“eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

 

	
  

	
(b)

	
“eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director of the Company or an affiliate of the 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 of the Company or an affiliate of the Company:

 

	
  

	
(i)

	
is or may be joined as a party; or

 

	
  

	
(ii)

	
is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

 

	
  

	
(c)

	
“expenses” has the meaning set out in the Business Corporations Act.

 

20.2         Mandatory Indemnification of Directors and Former Directors.  Subject to the Business Corporations Act, the Company must indemnify and advance expenses of a director or former 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 is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 20.2.

 

20.3         Indemnification of Other Persons.  Subject to any restrictions in the Business Corporations Act, the Company may indemnify any person.

 

20.4         Non-Compliance with Business Corporations Act.  The failure of a director or former director 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.

 

20.5         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:

 

	
  

	
(a)

	
is or was a director, officer, employee or agent of the Company;

 

	
  

	
(b)

	
is or was a director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;

 

	
  

	
(c)

	
at the request of the Company, is or was a director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;

 

	
  

	
(d)

	
at the request of the Company, holds or held a position equivalent to that of a director or officer of a partnership, trust, joint venture or other unincorporated entity;

 

against any liability incurred by him or her as such director, officer, employee or agent or person who holds or held such equivalent position.

 

PART 21

DIVIDENDS

 

21.1         Payment of Dividends Subject to Special Rights.  The provisions of this Part 21 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

 

21.2         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.

 

  

21

  

21.3         No Notice Required.  The directors need not give notice to any shareholder of any declaration under Article 21.2.

 

21.4         Record Date.  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.

 

21.5         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 paid up shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways.

 

21.6         Settlement of Difficulties.  If any difficulty arises in regard to a distribution under Article 21.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

 

	
  

	
(a)

	
set the value for distribution of specific assets;

 

	
  

	
(b)

	
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

 

	
  

	
(c)

	
vest any such specific assets in trustees for the persons entitled to the dividend.

 

21.7         When Dividend Payable.  Any dividend may be made payable on such date as is fixed by the directors.

 

21.8         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.

 

21.9         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.

 

21.10       Dividend Bears No Interest.  No dividend bears interest against the Company.

 

21.11       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.

 

21.12       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 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.

 

21.13       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.

 

  

22

  

PART 22

DOCUMENTS, RECORDS AND REPORTS

 

22.1         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 provisions of the Business Corporations Act.

 

22.2         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.

 

22.3         Remuneration of Auditors.  The remuneration of the auditors, if any, shall be set by the directors regardless of whether the auditor is appointed by the shareholders, by the directors or otherwise.  For greater certainty, the directors may delegate to the audit committee or other committee the power to set the remuneration of the auditors.

 

PART 23

NOTICES

 

23.1         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:

 

	
  

	
(a)

	
mail addressed to the person at the applicable address for that person as follows:

 

	
  

	
(i)

	
for a record mailed to a shareholder, the shareholder’s registered address;

 

	
  

	
(ii)

	
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;

 

	
  

	
(iii)

	
in any other case, the mailing address of the intended recipient;

 

	
  

	
(b)

	
delivery at the applicable address for that person as follows, addressed to the person:

 

	
  

	
(i)

	
for a record delivered to a shareholder, the shareholder’s registered address;

 

	
  

	
(ii)

	
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;

 

	
  

	
(iii)

	
in any other case, the delivery address of the intended recipient;

 

	
  

	
(c)

	
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;

 

	
  

	
(d)

	
sending the record, or a reference providing the intended recipient with immediate access to the record, by electronic communication to an address provided by the intended recipient for the sending of that record or records of that class;

 

	
  

	
(e)

	
sending the record by any method of transmitting legibly recorded messages, including without limitation by digital medium, magnetic medium, optical medium, mechanical reproduction or graphic imaging, to an address provided by the intended recipient for the sending of that record or records of that class; or

 

 

  

23

  

 

	
  

	
(f)

	
physical delivery to the intended recipient.

 

23.2         Deemed Receipt.  A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 23.1 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.  Any demand, notice or other communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery thereof and, if given by electronic communication, on the day of transmittal thereof if given during statutory business hours on the day which statutory business hours next occur if not given during such hours on any day.

 

23.3         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 23.1, prepaid and mailed or otherwise sent as permitted by Article 23.1 is conclusive evidence of that fact.

 

23.4         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.

 

23.5         Notice to Trustees.  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:

 

	
  

	
(a)

	
mailing the record, addressed to them:

 

	
  

	
(i)

	
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

 

	
  

	
(ii)

	
at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

 

	
  

	
(b)

	
if an address referred to in paragraph (a)(ii) 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.

 

PART 24

SEAL

 

24.1         Who May Attest Seal.  Except as provided in Articles 24.2 and 24.3, the Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signature or signatures of:

 

	
  

	
(a)

	
any two directors;

 

	
  

	
(b)

	
any officer, together with any director;

 

	
  

	
(c)

	
if the Company only has one director, that director; or

 

	
  

	
(d)

	
any one or more directors or officers or persons as may be determined by resolution of the directors.

 

24.2         Sealing Copies.  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 24.1, the impression of the seal may be attested by the signature of any director or officer.

 

 

  

24

  

 

24.3         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 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.

 

PART 25

PROHIBITIONS

 

25.1         Definitions.  In this Part 25:

 

	
  

	
(a)

	
“designated security” means:

 

	
  

	
(i)

	
a voting security of the Company;

 

	
  

	
(ii)

	
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

 

	
  

	
(iii)

	
a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or (b);

 

	
  

	
(b)

	
“security” has the meaning assigned in the Securities Act (British Columbia);

 

	
  

	
(c)

	
“voting security” means a security of the Company that:

 

	
  

	
(i)

	
is not a debt security, and

 

	
  

	
(ii)

	
carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

 

25.2         Application.  Article 25.3 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.

 

25.3         Consent Required for Transfer of Shares or Designated Securities.  No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

 

PART 26

SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO THE COMMON SHARES

 

26.1         Voting.  The holders of the Common shares shall be entitled to receive notice of and to attend and vote at all meetings of shareholders of the Company except meetings of the holders of another class of shares.  Each Common share shall entitle the holder thereof to one vote.

 

 

  

25

  

 

26.2         Dividends.

 

Subject to the preferences accorded to the holders of the Preferred shares, the holders of the Common shares shall be entitled to receive such dividends as may be declared thereon by the board of directors of the Company from time to time.

 

26.3         Dissolution.

 

In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of the Common shares shall be entitled to receive pro rata all of the assets remaining for distribution after payment to the holders of the Preferred shares, in accordance with preference on liquidation, dissolution or winding-up accorded to the holders of the Preferred shares.

 

PART 27

SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO THE PREFERRED SHARES

 

27.1         Issuable in Series.  The Preferred shares may include one or more series of shares and, subject to the Business Corporations Act, the directors may, by resolution, if none of the shares of any particular series are issued, alter the Articles of the Company and authorize the alteration of the Notice of Articles of the Company, as the case may be, to do one or more of:

 

	
  

	
(a)

	
determine the maximum number of shares of that series that the Company is authorize to issue, determine that there is no such maximum number, or alter any such determination;

 

	
  

	
(b)

	
create an identifying name by which the shares of that series may be identified, or alter any such identifying name; and

 

	
  

	
(c)

	
attach special rights and restrictions to the shares of that series, or alter any such special rights or restrictions.

 

 

Dated October 21, 2010.

 

 

	 	 	
Full Name and Signature

of Incorporator

	 	 	 	 
	 	 	FMD SERVICE (B.C.) INC.
	 	 	 	 
	 	 	 	 
	 	 	
Per:

	
/s/ Georald Ingborg

	 	 	 	
Authorized Signatory

 

 

 

 

 

See Part 28 added October 26, 2010

 

  

26

  

PART 28

SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO

THE FIRST SERIES OF PREFERRED SHARES

 

[Amended and Restated as of November 4, 2010]

 

28.1    Definitions

 

In this Part 28, the following terms shall have the following meanings unless the context otherwise requires:

 

“Applicable Number of Common shares” is the number being the product of the total number of issued Common shares, calculated on a fully diluted basis, (assuming the full exercise of any over-allotment option granted by the Company pursuant to the Company’s Initial Public Offering of Common shares) as at the Conversion Time, multiplied by the fraction 1/39, rounded down to the next whole number;

 

“Business Day” means any day other than a Saturday, Sunday or statutory or civic holiday in the Province of British Columbia;

 

“Conversion Time” means the time immediately following completion of the Company’s initial public offering of Common shares and the completion of the acquisition of the Snowfield and Brucejack mineral projects from Silver Standard Resources Inc.;

 

“First Series of Preferred shares” means the Series A Preferred shares in the capital of the Company;

 

“Liquidation Distribution” means a distribution of assets of the Company among its shareholders arising on the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or any other distribution of the assets or property of the Company among its shareholders for the purpose of winding-up its affairs;

 

“Redemption Amount” with respect to any Series A Preferred share means the sum of $1,500,000.00, or such other amount for which a Series A Preferred share is issued;

 

“Redemption Price” with respect to any Series A Preferred share means the Redemption Amount of such share, together with all declared but unpaid dividends thereon;

 

“Retraction Date” means the Business Day specified in the Retraction Notice on which the Series A Preferred shares referred to in such Retraction Notice are to be redeemed, or such earlier or later date as may be agreed in writing between the Company and the holder of the Series A Preferred shares to be redeemed; and

 

“Retraction Notice” means a notice in writing given by a holder of Series A Preferred shares to the Company pursuant to Section 28.4(a) specifying that the holder wishes to have the Company redeem the Series A Preferred shares held by such holder which are referred to in such notice.

 

28.2    Non-Cumulative Dividends

 

The holders of the Series A Preferred shares shall be entitled to receive and the Company shall pay thereon, in each financial year of the Company, non-cumulative dividends as the directors may, in their discretion from time to time declare.  The directors may, in their discretion, declare dividends on the Series A Preferred shares without at the same time declaring dividends on any other class or series of shares of the Company.  No dividends on the Common shares shall be declared or paid at any time when there are outstanding declared but unpaid dividends on the Series A Preferred shares.

 

28.3    Priority on Winding-Up

 

In the event of any Liquidation Distribution, each holder of a Series A Preferred share shall be entitled to receive from the assets and property of the Company in respect of each Series A Preferred share held, before any amount shall be paid or any property or assets of the Company distributed to the holders of any Common shares or to the holders of any shares of any other class or series ranking junior to the Series A Preferred shares in connection with such Liquidation Distribution, a sum equivalent to the Redemption Price at the date of such Liquidation Distribution in respect of each such share.  After payment to a holder of Series A Preferred shares of the amount so payable to such holder as provided for herein, such holder shall not be entitled, as such, to share further in any distribution of the assets or property of the Company.

 

 

  

27

  

 

28.4        Retraction at Option of Holder

 

	
  

	
(a)

	
Retraction

 

Any holder of Series A Preferred shares shall be entitled at any time and from time to time to require the Company to redeem any Series A Preferred shares registered in the name of such holder on the books of the Company by tendering to the Company at its registered office a share certificate or certificates representing the Series A Preferred shares which the registered holder desires to have the Company redeem, together with a Retraction Notice specifying:

 

	
  

	
(i)

	
that the registered holder desires to have all, or if not all, a specified number of, the Series A Preferred shares represented by such certificate or certificates redeemed by the Company; and

 

	
  

	
(ii)

	
the Retraction Date, which day must be a Business Day, on which such Series A Preferred shares are to be redeemed.

 

The Retraction Notice shall be given to the Company at least 10 Business Days prior to the Retraction Date specified therein, provided that the Company may at any time waive in writing the requirement that a Retraction Notice be given to it in connection with the redemption of any Series A Preferred shares held by a holder or that it be given at least 10 Business Days prior to the Retraction Date.

 

	
  

	
(b)

	
Obligation of Company to Redeem

 

Upon receipt of the share certificate or share certificates representing the Series A Preferred shares which the registered holder thereof desires to have the Company redeem, together with the Retraction Notice (unless the requirement for the same has been waived in accordance with Subsection 28.4(a), the Company shall, subject to applicable law and to the rights, privileges, restrictions and conditions attaching to the any class or series of shares of the Company ranking prior to the Series A Preferred shares, on the Retraction Date, redeem such Series A Preferred shares by paying to such registered holder an amount per share equal to the Redemption Price of each Series A Preferred share being redeemed.

 

	
  

	
(c)

	
Payment of Redemption Price

 

The Company shall pay the Redemption Price of the Series A Preferred shares being redeemed by cheque payable at par at any branch of the Company’s bankers for the time being in Canada.  Payment may also be made in such other manner as may be agreed upon in writing by the Company and the holder.  If payment of the Redemption Price is made on the Retraction Date for the Series A Preferred shares to be redeemed, such Series A Preferred shares shall be redeemed on the Retraction Date and from and after the Retraction Date such shares shall cease to be entitled to dividends and the holder thereof shall not be entitled to exercise any of the rights of a holder of Series A Preferred shares in respect thereof.  If payment of the Redemption Price is not so made, the rights of a holder of such Series A Preferred shares shall remain unaffected and such shares shall not be redeemed.  If part only of the Series A Preferred shares represented by any certificate are redeemed, a new certificate for the balance of such shares shall be issued at the expense of the Company.

 

	
  

	
(d)

	
Procedure if Redemption Prohibited

 

If the Company is prohibited by applicable law or by the rights, privileges, restrictions and conditions attaching to any class of shares of the Company ranking prior to the Series A Preferred shares, from redeeming on the Retraction Date all Series A Preferred shares represented by certificates duly presented and surrendered to the Company for redemption which the holder thereof desires to have redeemed on the Retraction Date, it will redeem such number thereof as the directors determine the Company is then permitted to redeem, rounded to the next lower multiple of shares. The Series A Preferred shares to be redeemed shall be selected as nearly as may be pro rata from among the holders of Series A Preferred shares who have tendered Series A Preferred shares for redemption, according to the number of Series A Preferred shares tendered by each such holder (disregarding fractions).  Such holders shall continue to hold, and be entitled to exercise all of the rights of a shareholder in respect of, the Series A Preferred shares not so redeemed.  On the last Business Day of each fiscal quarter thereafter, if it is then permitted to do so, the Company shall redeem such number of such Series A Preferred shares not theretofore redeemed or withdrawn, calculated and selected pro rata from among the holders of the Series A Preferred shares who have tendered and not withdrawn their Series A Preferred shares for redemption, on the same basis as on the original Retraction Date, as the directors determine the Company is permitted to redeem on such date, until all such Series A Preferred shares have been so redeemed. Payment of the Redemption Price for such Series A Preferred shares redeemed shall be made in the manner set forth in Subsection 28.4 (c).  If the directors have acted in good faith in making any of the determinations referred to in this Subsection 28.4 (d) as to the number of Series A Preferred shares which the Company is permitted at any time to redeem, the directors and the Company shall have no liability in the event that any such determination proves inaccurate.

 

	
  

	
(e)

	
Withdrawal of Retraction Notice

 

A holder of a Series A Preferred share duly presented and surrendered to the Company for redemption pursuant to a Retraction Notice may, at any time before such share is redeemed, by written notice, advise the Company that the holder no longer desires such share to be redeemed and require the Company to return to the holder a certificate representing such share.  Upon receipt of such written notice, the Company shall promptly send to such holder a certificate for such Series A Preferred share and thereupon the Company shall cease to have any obligation to redeem such share hereunder, unless such share is again tendered for redemption by the holder in accordance with the provisions of Subsection 28.4 (a).

 

 

  

28

  

 

28.5    Voting

 

The Series A Preferred shares shall not be entitled to vote.

 

28.6    Conversion of Series A Preferred shares

 

All Series A Preferred shares shall, at the Conversion Time, be automatically converted to the Applicable Number of Common shares and any Series A Preferred share registered in the name of such holder on the books of the Company shall be deemed cancelled and each share certificate or certificates representing the Series A Preferred shares so converted shall cease to represent any First Series Preferred shares, and the Company shall be deemed to have issued to such registered holder the Applicable Number of Common shares for each Series A Preferred share so converted and shall issue and deliver to such holder a share certificate representing such issued Common shares.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29exhibit_4-3.htm

EXHIBIT 4.3

 

INCENTIVE STOCK OPTION PLAN

OF

PRETIUM RESOURCES INC.

dated as of April 5, 2013

 

1.           Purpose of the Plan

 

1.1         The purpose of the Plan is to (a) attract and retain superior directors, officers, advisors, employees and other persons or companies engaged to provide ongoing services to the Company, to provide an incentive for such persons to put forth maximum effort for the continued success and growth of the Company, and in combination with these goals, to encourage their participation in the performance of the Company; and (b) closely align the personal interests of such directors, officers, advisors, employees and other persons or companies with those of the Shareholders by providing them with the opportunity, through the grant of Options, to acquire Shares.

 

2.           Definitions

 

2.1         For the purposes of the Plan, the following terms have the respective meanings set forth below:

 

	
  

	
(a)

	
“Associate” has the same meaning ascribed to that term under Subsection 2.22 of National Instrument 45-106;

 

	
  

	
(b)

	
“Black-Out Period” means that period during which a trading black-out period is imposed by the Company to restrict trades in the Company’s securities by an Eligible Person or Permitted Assign;

 

	
  

	
(c)

	
“Board” means the board of directors of the Company;

 

	
  

	
(d)

	
“Compensation and Corporate Governance Committee” means the committee of the Board as constituted from time to time to oversee compensation and corporate governance matters;

 

	
  

	
(e)

	
“Consultant” means an individual, other than an employee, director or officer of the Company or its Related Entity or a registrant under the Securities Act (British Columbia), that:

 

	
  

	
(i)

	
is engaged to provide on a bona fide basis, consulting, technical, management or other services to the Company or Related Entity of the Company, other than services provided in relation to a distribution, services provided by registrants and services that include investor relations activities;

 

	
  

	
(ii)

	
provides the services under a written contract between the Company or its Related Entity and the individual Consultant or a Consultant Company or Consultant Partnership of the individual; and

  

  

  

-2-

 

	
  

	
(iii)

	
in the reasonable opinion of the Board, spends or will spend a significant amount of time and attention on the affairs and business of the Company or Related Entity of the Company;

 

	
  

	
(f)

	
“Consultant Company” means for an individual Consultant, the company of which the individual consultant is an employee or shareholder;

 

	
  

	
(g)

	
“Consultant Partnership” means for an individual consultant, a partnership of which the individual Consultant is an employee or partner;

 

	
  

	
(h)

	
“Company” means Pretium Resources Inc., a corporation incorporated under the British Columbia Business Corporations Act, or its successors;

 

	
  

	
(i)

	
“Disability” means a physical injury or mental incapacity of a nature which the Board determines prevents or would prevent the Optionee from satisfactorily performing the substantial and material duties of his or her position with the Company;

 

	
  

	
(j)

	
“Eligible Person” means, from time to time, any bona fide director, senior officer or employee of the Company or the Related Entity of the Company, any Permitted Consultant and any Permitted Assign;

 

	
  

	
(k)

	
“Exchange” means, if the Shares are listed on the TSX, the TSX and, if the Shares are not listed on the TSX, any other principal exchange upon which the Shares are listed;

 

	
  

	
(l)

	
“Grant Date” means the date on which an Option is granted to an Eligible Person;

 

	
  

	
(m)

	
“Insider” has the same meaning ascribed to that term as set out in the Securities Act (British Columbia) and includes Associates and Affiliates of an Insider, but excludes a director or senior officer of a subsidiary or Related Entity of the Company unless such director or senior officer

 

	
  

	
(i)

	
in the ordinary course receives or has access to information as material facts or material changes concerning the Company before the material facts or material changes are generally disclosed;

 

	
  

	
(ii)

	
is a director or senior officer of a major subsidiary (as defined in National Instrument 55-101); or

 

	
  

	
(iii)

	
is an Insider of the Company in a capacity other than as a director or senior officer of the subsidiary or Related Entity;

 

	
  

	
(n)

	
“Market Value” of a Share means, on any given day:

 

	
  

	
(i)

	
where the Share is not listed on an Exchange, the fair market value of a Share on that day determined by the Board in good faith; and

 

	
  

	
(ii)

	
where the Share is listed on an Exchange, the last daily closing price per Share on the Exchange on the trading day immediately preceding the relevant date and if there was no sale on the Exchange on such date, then the last sale prior thereto;

  

  

  

-3-

 

	
  

	
(o)

	
“Option” means the right to purchase a Share under the Plan;

 

	
  

	
(p)

	
“Option Period” has the meaning ascribed to that term in Subsection 6.3 hereof;

 

	
  

	
(q)

	
“Option Price” means the price per Share at which Shares may be purchased under the Option, as determined pursuant to Paragraph 5.1(b) hereof and as may be adjusted in accordance with Section 10 hereof;

 

	
  

	
(r)

	
“Optionee” means an Eligible Person to whom an Option has been granted;

 

	
  

	
(s)

	
“Permitted Assign” means for a person that is an employee, executive officer, director or Consultant of the Company or Related Entity, a holding entity (as defined in National Instrument 45-106) of the person or an RRSP or RRIF of the person;

 

	
  

	
(t)

	
“Permitted Consultant” means a Consultant, a Consultant Company or Consultant’s Partnership;

 

	
  

	
(u)

	
“Plan” means the Incentive Stock Option Plan of the Company as set forth herein as the same may be amended and/or restated from time to time;

 

	
  

	
(v)

	
“Redundancy” means the termination of employment due to the fact that,

 

	
  

	
(i)

	
the person’s employer has ceased or intends to cease:

 

	
  

	
(A)

	
to carry on business for the purposes of which the employee was employed by him, or

 

	
  

	
(B)

	
to carry on that business in the place where the employee was so employed, or

 

	
  

	
(ii)

	
the requirements of that business:

 

	
  

	
(A)

	
for employees to carry out work of a particular kind, or

 

	
  

	
(B)

	
for employees to carry out work of a particular kind in the place where the employee was employed by the employer,

 

have ceased or diminished or are expected to cease or diminish;

 

	
  

	
(w)

	
“Related Entity” means a person that is controlled by the Company or is controlled by the same person that controls the Company and “control” for the purpose of this definition has the same meaning as set out in section 2.23 of National Instrument 45-106;

 

	
  

	
(x)

	
“Retirement” means the termination of employment due to retirement of an Optionee on or after such Optionee’s normal retirement date under the applicable retirement plan or policy of his or her employer or due to early retirement with the consent of the Board;

 

	
  

	
(y)

	
“Regulators” has the meaning ascribed to that term in Section 11.1 hereof;

 

	
  

	
(z)

	
“Share” means a Common share without nominal or par value in the capital of the Company;

 

	
  

	
(aa)

	
“Shareholder” means a holder of one or more Shares; and

  

  

  

-4-

 

	
  

	
(bb)

	
“TSX” means the Toronto Stock Exchange.

 

2.2         Unless otherwise indicated, all dollar amounts referred to in this Plan are in Canadian funds.

 

2.3         As used in this Plan, words importing the masculine gender shall include the feminine and neuter genders and words importing the singular shall include the plural and vice versa, unless the context otherwise requires and references to person includes any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation (with or without share capital), unincorporated association, trust, trustee, executor, administrator or other legal representative.

 

3.           Administration of the Plan

 

3.1         The Plan shall be administered by the Board with the assistance of the Compensation and Corporate Governance Committee and the Chief Executive Officer as provided herein.

 

3.2         The members of the Compensation and Corporate Governance Committee shall be appointed from time to time by, and serve at the pleasure of, the Board.  A majority of the Compensation and Corporate Governance Committee shall constitute a quorum thereof.  Acts approved in writing by all members of the Compensation and Corporate Governance Committee shall constitute valid acts of the Compensation and Corporate Governance Committee as if taken at a meeting at which a quorum was present.

 

3.3         The Chief Executive Officer of the Company shall periodically make recommendations to the Compensation and Corporate Governance Committee as to the grant of Options.

 

3.4         The Compensation and Corporate Governance Committee shall, on at least an annual basis, make recommendations to the Board as to the grant of Options.

 

3.5         The Board may wait until such time as the financial statements of the preceding fiscal year are approved by the Board before making any determination regarding the grant of Options.

 

3.6         In addition to the powers granted to the Board under the Plan and subject to the terms of the Plan, the Board shall have full and complete authority to grant Options, to interpret the Plan, to prescribe such rules and regulations as it deems necessary for the proper administration of the Plan and to make such determinations and to take such actions in connection therewith as it deems necessary or advisable.  Any such interpretation, rule, determination or other act of the Board shall be conclusively binding upon all persons.

 

3.7         The Board may authorize one or more officers of the Company to execute and deliver and to receive documents on behalf of the Company.

  

  

  

-5-

 

4.           Shares Subject to the Plan

 

4.1         The maximum number of Shares that may be reserved for issuance pursuant to Options granted under the Plan shall not at any time exceed 10% of the total number of issued and outstanding Shares at the Grant Date of the Options, subject to adjustment as provided in Section 10 hereof and subject to reloading permitted under Subsection 4.4 (which reloading shall increase the aggregate number of Shares that may be issued under the Plan by the number of additional Shares permitted to be reserved under Subsection 4.4).

 

4.2         The total number of Shares that may be reserved for issuance to any one person pursuant to Options granted under the Plan in any one year shall not exceed 5% of the Shares of the Company issued and outstanding on a non-diluted basis on the Grant Date of the Options.

 

4.3         Anything in this Plan to the contrary notwithstanding:

 

	
  

	
(a)

	
the maximum number of Shares that may be reserved for issuance pursuant to Options granted under the Plan to Insiders of the Company, together with the number of Shares reserved for issuance to such Insiders under the Company’s other previously established or proposed share compensation arrangements, shall not exceed 10% of the issued and outstanding Shares on a non-diluted basis at the Grant Date of the Options;

 

	
  

	
(b)

	
the maximum number of Shares which may be issued to Insiders of the Company within any one-year period, pursuant to Options granted under the Plan when taken together with the number of Shares issued to such Insiders under the Company’s other previously established or proposed share compensation arrangements, shall not exceed 10% of the Shares of the Company’s issued and outstanding on a non-diluted basis at the end of such period;

 

	
  

	
(c)

	
the maximum number of Shares which may be issuable to any individual Insider or consultant of the Company, within a one-year period pursuant to Options granted under the Plan, when taken together with the number of Shares issuable to such Insiders under the Company’s other previously established or proposed share compensation arrangements, may be no more than 2% of the total number of issued and outstanding Shares on a non-diluted basis at the end of such period; and

 

	
  

	
(d)

	
the maximum number of Shares which may be issuable to the non-employee directors of the Company, as a group, within a one-year period pursuant to options granted under the Stock Option Plan, when taken together with the number of Shares issued to such directors under the Company’s other previously established or proposed share compensation arrangements, may be no more than 1% of the total number of issued and outstanding Shares on a non-diluted basis at the end of such period.

  

  

  

-6-

 

	
  

	
Any entitlement to acquire Shares granted pursuant to the Plan or any other options prior to the grantee becoming an Insider shall be excluded for the purposes of the limits set out in paragraph (b) above.

 

4.4         Options may be granted in respect of authorized and unissued Shares. Shares in respect of which Options have expired, were cancelled or otherwise terminated for any reason without having been exercised shall be available for subsequent Options under the Plan.  Options that have been exercised shall be available for subsequent grants under the Plan and the Company shall reserve additional Shares for issuance pursuant to such Options.  No fractional Shares may be purchased or issued under the Plan.

 

5.           Grants of Options

 

5.1         Subject to the provisions of the Plan, the Board shall, from time to time, determine those Eligible Persons to whom Options shall be granted and the Grant Date.  Options granted to Eligible Persons in accordance with the requirement hereunder shall be at no cost to the Eligible Person.  The Board shall also determine, in connection with each grant of Options:

 

	
  

	
(a)

	
the number of Options to be granted;

 

	
  

	
(b)

	
the Option Price applicable to each Option, but the Option Price shall not be less than the Market Value per Share on the Grant Date;

 

	
  

	
(c)

	
the vesting conditions of the Options, if any; and

 

	
  

	
(d)

	
the other terms and conditions (which need not be identical and which, without limitation, may include non-competition provisions) of all Options covered by any grant.

 

6.           Eligibility, Vesting and Terms of Options

 

6.1         Options may be granted to Eligible Persons only.

 

6.2         Subject to the adjustments provided for in Section 10 hereof, each Option shall entitle the Optionee to purchase one Share.

 

6.3         The option period (the “Option Period”) of each Option commences on the Grant Date and expires at 4:30 p.m. Vancouver time on the fifth anniversary of the Grant Date.  If an Option expires during a Black-Out Period, then, notwithstanding any other provision of the Plan, the Option shall expire 10 business days after the Black-Out Period is lifted by the Company.

 

6.4         An Option which has vested may be exercised (in each case to the nearest full Share) at any time during the Option Period.

 

6.5         An Option is personal to the Optionee and may not be sold, transferred, assigned or disposed of in any way except, by will or by the laws governing the devolution of property, to the Optionee’s executor, administrator or other personal representative in the event of death of the Optionee, or to a Permitted Assign.

  

  

  

-7-

 

7.           Option Agreement

 

7.1           Upon the grant of an Option, the Company and the Optionee shall enter into an option agreement, in a form set out in Appendix “A” attached hereto or in such other form as approved by the Board, which agreement shall set out the Optionee’s agreement that the Options are subject to the terms and conditions set forth in the Plan as it may be amended or replaced from time to time, the Grant Date, the name of the Optionee, the Optionee’s position with the Company, the number of Options, the Option Price, the expiry date of the Option Period, the conditions (if any) imposed on the exercise of the Option, and such other terms and conditions as the Board may deem appropriate.

 

8.           Termination of Employment, Engagement or Directorship

 

8.1         Optionees shall have 60 days from:

 

	
  

	
(a)

	
the date on which the Optionee’s employment, engagement or directorship with the Company or its Related Entity is terminated due to Retirement, Disability or Redundancy;

 

	
  

	
(b)

	
the date the company by which the employee is employed and by virtue of which the Optionee is an Eligible Person ceases to be a Related Entity of the Company; or

 

	
  

	
(c)

	
the date on which the undertaking or part undertaking of the company in which the employee is employed and by virtue of which the Optionee is an Eligible Employee is transferred or sold such that the company is no longer a Related Entity of the Company;

 

to exercise any Option granted hereunder to the extent such Option was exercisable and had vested on the date of such termination; provided, however, that no Option shall be exercisable following the expiration of the Option Period applicable thereto.

 

8.2         Any Optionee whose employment, engagement or directorship with the Company or employment with the Company’s Related Entity is terminated, other than for cause, at any time in the six months following a change of control of the Company (as hereinafter defined) shall have 90 days from the date of such termination to exercise any Option granted hereunder.  All Options granted shall immediately vest on the date of such termination; provided, however, that no Option shall be exercisable following the expiration of the Option Period applicable thereto.  For the purposes of this Subsection 8.2, “change of control” shall mean the acquisition by a person, or combination of persons acting in concert, of:

 

	
  

	
(a)

	
a sufficient number of the voting rights attached to the outstanding voting securities of the Company which together with the voting securities held by such person or persons, affect materially the control of the Company; or

 

	
  

	
(b)

	
more than 50% of the voting rights attached to the outstanding voting securities of the Company;

  

  

  

-8-

and such persons or combination of persons did not hold a sufficient number of voting rights to affect materially the control of the Company immediately prior to the time of such acquisition.

 

8.3         In the event of the death of an Optionee, either while in the employment or engagement or while a director of the Company or its Related Entity or after Retirement or Disability, the Optionee’s executor, administrator or other personal representative who have acquired the right to exercise such Option from the Optionee by will or the laws of devolution may, within 365 days from the date of the Optionee’s death, exercise any Option granted hereunder to the extent such Option was exercisable and had vested on the date of the Optionee’s death; provided, however, that no Option shall be exercisable following the expiration of the Option Period applicable thereto.

 

8.4         In the event an Optionee’s employment, engagement or directorship with the Company or its Related Entity terminates for any reason other than for cause, death, or in the circumstances described in Subsections 8.1, 8.2 or 8.3 hereof, the Optionee may exercise any Option granted hereunder to the extent such Option was exercisable and had vested on the date of termination no later than thirty (30) days after such termination.  In the event an Optionee’s employment, engagement or directorship is terminated for cause, each Option held by the Optionee that has not been exercised prior to such termination shall lapse and become null and void immediately upon such termination.

 

8.5         The Board may also in its sole discretion (without the requirement of Shareholder approval) increase the periods permitted to exercise all or any of the Options covered by any Grant following a termination of employment, engagement or directorship as provided in Subsections 8.1, 8.2, 8.3 or 8.4 above, if allowable under applicable law; provided, however, that in no event shall any Option be exercisable following the expiration of the Option Period applicable thereto.

 

8.6         This Plan, any Option Agreement and any instrument executed in connection therewith will not:

 

	
  

	
(a)

	
confer on any Optionee any right to continue in employment, engagement or directorship with the Company or its Affiliates;

 

	
  

	
(b)

	
affect the right of the Company, to terminate the employment, engagement or directorship of any Optionee without liability at any time with or without cause;

 

	
  

	
(c)

	
impose upon the Board (or, if so delegated, the Compensation and Corporate Governance Committee) or any other person any duty or liability whatsoever (whether in contract, tort, or otherwise howsoever) in connection with:

 

	
  

	
(i)

	
the lapsing of any Option pursuant to the Plan;

 

	
  

	
(ii)

	
the failure or refusal to exercise any discretion under the Plan; or

 

	
  

	
(iii)

	
an Optionee ceasing to be an Eligible Person for any reason whatever.

  

  

  

-9-

8.7         The benefit of Subsection 8.6 is given to the Company for itself and as trustee and agent of each Related Entity.  To the extent that this Section benefits any company, which is not a party to the Plan, the benefit shall be held on trust and as agent by the Company for such company and the Company may, at its discretion, assign the benefit of Subsection 8.6 to any such company.

 

9.           Exercise of Options

 

9.1         Subject to the provisions of the Plan, an Option may be exercised from time to time by delivery to the Company at its registered office of a written notice of exercise addressed to the Secretary of the Company specifying the number of Shares with respect to which the Option is being exercised, together with a certified cheque or bank draft for the aggregate of the Option Prices to be paid for the Shares to be purchased.  Certificates for such Shares shall be issued and delivered to the Optionee not later than 30 days following the receipt of such notice and payment.

 

9.2         No less than 100 Options may be exercised at any one time, except where a smaller number of Options is or remains exercisable pursuant to a grant, in which case, such smaller number of Options must be exercised at one time.

 

10.         Adjustment on Alteration of Share Capital

 

10.1       In the event of a subdivision, consolidation or reclassification of outstanding Shares or other capital adjustment, or the payment of a stock dividend thereon, the number of Shares reserved or authorized to be reserved under the Plan, the number of Shares receivable on the exercise of an Option and the Option Price therefor shall be increased or reduced proportionately and such other adjustments shall be made as may be deemed necessary or fair and equitable by the Board.

 

10.2       If the Company amalgamates, consolidates or combines with or merges with or into another body corporate, whether by way of amalgamation, statutory arrangement or otherwise (the right to do so being hereby expressly reserved) (a “Business Combination”), any Share receivable on the exercise of an Option shall be converted into the securities, property or cash which the Optionee would have received upon such Business Combination if the Optionee had exercised his or her Option immediately prior to the effective date of such Business Combination and the Option Price shall be adjusted as may be deemed necessary or fair and equitable by the Board and such adjustment shall be binding for all purposes of the Plan.  Furthermore, notwithstanding any other provision herein, (a) if because of a proposed Business Combination the exchange or replacement of shares in the Company or those in another company is imminent, or (b) an offer to purchase all of the Shares is made by a third party, the Board may, in a fair and equitable manner, determine the manner in which all unexercised Options granted under the Plan shall be treated including, for example, requiring the acceleration of the time for the exercise of such rights by the Optionees and of the time for the fulfilment of any conditions or restrictions on such exercise (including without limitation, vesting requirements).

  

  

  

-10-

10.3       In the event of a change in the Company’s currently authorized Shares which is limited to a change in the designation thereof, the shares resulting from any such change shall be deemed to be Shares within the meaning of the Plan.

 

10.4       In the event of any change affecting the Shares other than the changes referred to in Subsections 10.1, 10.2 and 10.3, such adjustment, if any, shall be made as may be deemed equitable by the Board in its sole discretion to properly reflect such event and such adjustment shall be binding for all purposes of the Plan.

 

10.5       No adjustment provided in this Section 10 shall require the Company to issue a fractional Share and the total adjustment with respect to each Option shall be limited accordingly.

 

10.6       All determinations of the Board under this Section 10 shall be binding for all purposes of the Plan.

 

11.        Regulatory Approval

 

11.1       Notwithstanding any of the provisions contained in the Plan or any Option, the Company’s obligation to grant Options and issue Shares pursuant to the exercise of an Option and to issue and deliver certificates for such securities to an Optionee shall be subject to:

 

	
  

	
(a)

	
compliance with all applicable laws, regulations, rules, orders of governmental or regulatory authorities in Canada (“Regulators”);

 

	
  

	
(b)

	
compliance with the requirements of any stock exchange on which the Company’s shares are listed, if applicable; and

 

	
  

	
(c)

	
receipt from the Optionee of such covenants, agreements, representations and undertakings, including as to future dealings in such Shares, as the Company determines to be necessary or advisable in order to safeguard against the violation of the securities laws of any jurisdiction.

 

11.2       The Company shall in no event be obligated to take any action in order to cause the issuance and delivery of such certificates to comply with any laws, regulations, rules, orders or requirements.

 

11.3       If any amendment, modification or termination to the provisions hereof or any Option made pursuant hereto are required by any Regulators or a stock exchange or market as a condition of approval to a distribution to the public of any Shares or to obtain a listing or quotation of any Shares, the Board is authorized to make such amendments and thereupon the terms of the Plan, any Options, including any option agreement made pursuant hereto, shall be deemed to be amended accordingly without requiring the consent or agreement of any Optionee.

 

  

  

  

  

-11-

12.        Tax Withholding

 

12.1       The Company shall:

 

	 	
(a)

	
be entitled to make such additional tax withholdings from payments of employment income to Employees as shall, in the opinion of the Company, be required under the Income Tax Act (Canada), and remit such taxes to the Canada Revenue Agency on behalf of the Employees, in respect of income taxable to the Employees arising on the exercise of Options; or

 

	
  

	
(b)

	
may require an Option Holder, as a condition of exercise of an Option, to pay to or reimburse the Company for any taxes which are required in the opinion of the Company to be withheld and remitted by it in respect of the exercise of such Option under any applicable laws, including the Income Tax Act (Canada).

 

13.         Miscellaneous

 

13.1       An Optionee entitled to Shares as a result of the exercise of an Option shall not be deemed for any purpose to be, or to have rights as, a shareholder of the Company by such exercise, except to the extent Shares are issued therefor and then only from the date such Shares are issued.  No adjustment shall be made for dividends or distributions or other rights which the record date is prior to the date such Shares are issued pursuant to the exercise of Options.

 

14.         Effective Date, Amendment and Termination

 

14.1       The Plan is effective as of May 10, 2013.

 

14.2       The Board may, subject where required to Regulators and/or stock exchange approval and Shareholder approval, amend the Plan at any time. Notwithstanding the foregoing, the Board is specifically authorized to amend or revise the terms of the Plan or any Option without obtaining Shareholder approval in the following circumstances, provided that, in the case of any Option, no such amendment or revision may, without the consent of the Optionee, materially decrease the rights or benefits accruing to such Optionee or materially increase the obligations of such Optionee:

 

	
  

	
(a)

	
amendments of a “housekeeping” nature including, but not limited to, of a clerical, grammatical or typographical nature;

 

	
  

	
(b)

	
to correct any defect, supply any information or reconcile any inconsistency in the Plan in such manner and to such extent as shall be deemed necessary or advisable to carry out the purposes of the Plan;

 

	
  

	
(c)

	
a change to the vesting provisions of any Option or the Plan;

 

	
  

	
(d)

	
amendments to reflect any changes in requirements of any Regulator or stock exchange to which the Company is subject;

 

	
  

	
(e)

	
a change to the termination provisions of an Option which does not result in an extension beyond the Option Period as contemplated in Subsection 8.5 of the Plan;

 

	
  

	
(f)

	
in the case of any Option, the substitution of another award of the same or different type;

  

  

  

-12-

 

	
  

	
(g)

	
in the case of any Option, such amendments or revisions contemplated in Subsections 10.1, 10.2 and 10.3 of the Plan;

 

	
  

	
(h)

	
amendments to the definition of change of control for the purposes hereof;

 

	
  

	
(i)

	
the addition of a cashless exercise feature, payable in cash or securities of the Company; and

 

	
  

	
(j)

	
a change to the class of Eligible Persons that may participate under the Plan.

 

For greater certainty, the Option Price of any outstanding Option granted to any non-Insiders of the Company may not be reduced unless Shareholder approval is obtained by way of a resolution passed by a majority of the votes cast by the Shareholders at a meeting of Shareholders.  The Option Price of any outstanding Option granted may not be reduced and the original Option Period may not be extended to the benefit of Insiders of the Company unless disinterested Shareholder approval is obtained in accordance with the requirements of the TSX.

 

14.3       The Board may, subject where required to Regulators and/or stock exchange approval, from time to time suspend or terminate the Plan in whole or in part.  No action by the Board to terminate the Plan pursuant to this Section 13 shall affect any Options granted hereunder which became effective pursuant to the Plan prior to such action.

 

14.4       Notwithstanding any provision contained in the Plan, effective May 10, 2013, the Plan must be reconfirmed, every three years, by a resolution passed by a majority of the votes cast by Shareholders at a meeting of Shareholders and if the Plan is not reconfirmed by the Shareholders as required by this provision, no further grants of Options may be made under the Plan.

  

  

  

 

APPENDIX A

 

Incentive Stock Option Plan of

 

Pretium Resources Inc.

 

 

OPTION AGREEMENT

 

This Option Agreement is entered into between Pretium Resources Inc. (the “Company”) and the Optionee named below pursuant to the Company’s Incentive Stock Option Plan, as amended (the “Plan”) a copy of which is attached hereto, and confirms the following:

 

	
1.

	
Grant Date:

	  
	 	 	 
	
2.

	
Optionee:

	  
	 	 	 
	
3.

	
Optionee’s Position with the Company:

	  
	 	 	 
	
4.

	
Number of Options:

	  
	 	 	 
	
5.

	
Option Price ($ per Share):

	
$

	 	 	 
	
6.

	
Expiry Date of Option Period:

	  

 

	
7.

	
Each Option that has vested entitles the Optionee to purchase one Share at any time up to 4:30 p.m. Vancouver time on the expiry date of the Option Period.  The Options vest as follows:

 

	
  

	
(a)

	
25% of the Options granted shall vest immediately upon the Grant Date;

 

	
  

	
(b)

	
an additional 25% of the Options granted shall vest after the expiry of a period of 6 months from the Grant Date; and

 

	
  

	
(c)

	
an additional 25% of the Options granted shall vest after the expiry of a period of 12 months from the Grant Date; and

 

	
  

	
(d)

	
an additional 25% of the Options granted shall vest after the expiry of a period of 18 months from the Grant Date.

 

	
8.

	
The Option is non-assignable and non-transferrable otherwise than, by will or by the law governing the devolution of property, to the Optionee’s executor, administrator or other personal representative in the event of death of the Optionee.

 

	
9.

	
This Option Agreement is subject to the terms and conditions set out in the Plan, as amended or replaced from time to time.  In the case of any inconsistency between this Option Agreement and the Plan, the Plan shall govern.

 

	
10.

	
Unless otherwise indicated, all defined terms shall have the respective meanings attributed thereto in the Plan.

  

  

  

-2-

 

	
11.

	
By signing this agreement, the Optionee acknowledges that he, she, or its authorized representative has read and understands the Plan and agrees that the Options are granted under and governed by the terms and conditions of the Plan, as may be amended or replaced from time to time.

 

IN WITNESS WHEREOF the parties hereto have executed this Option Agreement as of the          day of                       ,            .

	
SIGNED, SEALED AND DELIVERED by __________________________ in the presence of:

	
)

)

)

)

)

	  
	
Signature of Witness

	
)

)

)

	
Signature by Optionee

	
Print Name

	
)

	
Print Name

	 	 	 
	PRETIUM RESOURCES INC.	 	 
	 	 	 
	Per:	 	 	 
	Authorized Signatory	 	 

 

  

  

  

Notice of Exercise of Incentive Stock Option

 

TO:           PRETIUM RESOURCES INC. (the “Company”)

 

 

I wish to exercise ________________ of the incentive stock options granted to me by the Company at the price of CDN $______________ per share and enclose herewith the amount of $________________ in payment of the total exercise price for such shares.

 

DATED as of ________________________, ______.

 

	  	  	  
	  	  	
Signature of Optionee

	 	 	 
	 	 	 
	  	  	
Please print name of Optionee

Please have the share certificate issued as follows:

	
Registration Instructions:

 

	  	
Delivery Instructions:

	 	 	 
	

Name

	  	

Name

	  	  	  
	 	 	 
	

Account reference, if applicable

	  	

Account reference, if applicable

	 	 	 
	  	  	  
	

Address

	  	

Address

	  	  	  
	 	 	 
	

Telephone Number                                                      Fax Number

	  	

Telephone Number                                                      Fax Number

	  	  	  
	 	 	 
	

Contact Name

	  	

Contact Name

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