CORPORATE GOVERNANCE DOCUMENTS
SECOND AMENDED AND RESTATED BY-LAWS OF INTELGENX TECHNOLOGIES CORP.
(f/k/a/ Big Flash Corporation) (as amended on March 18, 2022)
(as amended on March 18, 2022)
ARTICLE 1 - OFFICES
1.1 REGISTERED OFFICE. The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware.
1.2 OTHER OFFICES. The corporation may also have offices at such other places both within or without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require.
ARTICLE 2 - STOCKHOLDERS
2.1 PLACE OF MEETINGS. All meetings of stockholders shall be held at such place within or without the State of Delaware as may be designated from time to time by the Board of Directors, the President or the Chief Executive Officer or, if not so designated, at the registered office of the corporation.
2.2 ANNUAL MEETING. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held at a time fixed by the Board of Directors, the President or the Chief Executive Officer. If this date shall fall upon a legal holiday at the place of the meeting, then such meeting shall be held on the next succeeding business day at the same hour. If no annual meeting is held in accordance with the foregoing provisions, the Board of Directors shall cause the meeting to be held as soon thereafter as convenient.
2.3 SPECIAL MEETINGS. A special meeting of the stockholders may be called only in the manner specified in the Certificate of Incorporation.
2.4 NOTICE OF MEETINGS. Except as otherwise provided by law, written notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notices of all meetings shall state the place, date and hour of the meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation.
2.5 VOTING LIST. The corporate Secretary who has charge of the stock ledger of the corporation shall prepare or cause to be prepared, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, at a place within the city where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time of the meeting, and may be inspected by any stockholder who is present.
2.6 QUORUM. Except as otherwise provided by law, the Certificate of Incorporation or these By-Laws, the holders of one third (1/3) of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business.
2.7 ADJOURNMENTS. Any meeting of stockholders may be adjourned to another time and to any other place at which a meeting of stockholders may be held under these By-Laws by the stockholders present or represented at the meeting and entitled to vote, although less than a quorum, or, if no stockholder is present, by any officer entitled to preside at or to act as Secretary of such meeting. Subject to applicable law, it shall not be necessary to notify any stockholder of any adjournment of less than 30 days if the time and place of the adjourned meeting are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.
2.8 VOTING AND PROXIES. Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided in the Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders, or to express consent or dissent to corporate action in writing without a meeting, may vote or express such consent or dissent in person or may authorize another person or persons to vote or act for him by written proxy executed by the stockholder or his authorized agent and delivered to the Secretary of the corporation. No such proxy shall be voted or acted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period.
2.9 ACTION AT MEETING. When a quorum is present at any meeting, the holders of a majority of votes cast (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, the holders of a majority of the votes cast for that class of stock for each such matter) shall decide any matter properly before the meeting to be voted upon by the stockholders at such meeting, except when a different vote is required by express provision of law, the Certificate of Incorporation or these By-Laws. A nominee for director shall be elected to the Board of Directors if a majority of the votes cast are in favor of such nominee’s election; provided, however, that, if the number of nominees for director exceeds the number of directors to be elected, directors shall be elected by a plurality of the votes of the shares of stock represented in person or by proxy at any meeting of shareholders held to elect directors and entitled to vote on such election of directors. For purposes of this by-law, a majority of votes cast shall mean that the number of votes cast “for” a matter exceeds the number of votes cast “against” that matter (with “abstentions” and “broker nonvotes” not counted as a vote cast either “for” or “against” that matter). In the event that a director nominee fails to receive an affirmative majority of the votes cast in an election where the number of nominees is less than or equal to the number of directors to be elected, the Board of Directors, within its powers, may take any appropriate action, including decreasing the number of directors or filling a vacancy.
ARTICLE 3 - DIRECTORS
3.1 GENERAL POWERS. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the corporation except as otherwise provided by law, the Certificate of Incorporation or these By-Laws. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled.
3.2 NUMBER; ELECTION; TENURE AND QUALIFICATION. The number of directors as shall constitute the whole Board shall be fixed by resolution of the Board of Directors, from time to time, subject to applicable law and exchange regulation and listing standards. Each director shall be elected by the stockholders at the annual meeting and shall hold office until the next annual meeting and until his successor is elected and qualified, or until his earlier death, resignation or removal. Directors need not be stockholders of the corporation.
3.3 VACANCIES. Unless and until filled by the stockholders, any vacancy in the Board of Directors, however occurring, including a vacancy resulting from an increase of the Board, may be filled by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office, or a director chosen to full a position resulting from an increase in the number of directors shall hold office until the next annual meeting of stockholders and until his successor is elected and qualified, or until his earlier death, resignation or removal.
3.4 RESIGNATION. Any director may resign by delivering his written resignation to the corporation at its principal office or to the President or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.
3.5 REGULAR MEETINGS. Regular meetings of the Board of Directors may be held without notice at such time and place, within or without the State of Delaware, as shall be determined from time to time by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders.
3.6 SPECIAL MEETINGS. Special meetings of the Board of Directors may be held at any time and place, within or without the State of Delaware, designated in a call by the Chairman of the Board, President, two or more directors, or by one director in the event that there is only a single director in office.
3.7 NOTICE OF SPECIAL MEETINGS. Notice of any special meeting of directors shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be given to each director in person, by telephone or by e-mail sent to his business or home address at least 48 hours in advance of the meeting, or by written notice mailed to his business or home address at least 72 hours in advance of the meeting. A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.
3.8 MEETINGS BY TELEPHONE CONFERENCE CALLS. Directors or any members of any committee designated by the directors may participate in a meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.
3.9 QUORUM. A majority of the number of directors fixed pursuant to Section 3.2 shall constitute a quorum at all meetings of the Board of Directors. In the event one or more of the directors shall be disqualified to vote at any meeting, then the required quorum shall be reduced by one for each such director so disqualified; provided, however, that in no case shall less than one-third (1/3) of the number so fixed constitute a quorum. In the absence of a quorum at any such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.
3.10 ACTION AT MEETING. At any meeting of the Board of Directors at which quorum is present, the vote of a majority of those present shall be sufficient to take any action, unless a different vote is specified by law, the Certificate of Incorporation or these By-Laws.
3.11 ACTION BY CONSENT. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee of the Board of Directors may be taken without a meeting, if all members of the Board or committee, as the case may be, consent to the action in writing, and the written consents are filed with the minutes of proceedings of the Board or committee.
3.12 COMMITTEES. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the corporation and in otherwise in compliance with applicable law. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and subject to the provisions of the General Corporation Law of the State of Delaware and other applicable law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these By-Laws for the Board of Directors and otherwise in compliance with applicable law.
3.13 COMPENSATION OF DIRECTORS. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving the corporation or any of its parent or subsidiary corporations in any other capacity and receiving compensation for such service.
ARTICLE 4 - OFFICERS
4.1 ENUMERATION. The officers of the corporation shall consist of a President, a Chief Executive Officer, a Secretary, a Chief Financial Officer and such other officers with such other titles as the Board of Directors shall determine, including a Chairman of the Board, a Vice-Chairman of the Board, a Treasurer, and one or more Vice Presidents, Controllers, and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.
4.2 ELECTION. The President, Chief Executive Officer, Chief Financial Officer and Secretary shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders or, if no such annual meeting has yet been held, by the Board of Directors at any meeting. Other officers may be appointed by the Board of Directors at such meeting or at any other meeting.
4.3 QUALIFICATION. No officer need be a director. No officer need be a stockholder. Any two or more offices may be held by the same person.
4.4 TENURE. Except as otherwise provided by law, by the Certificate of Incorporation or by these By-Laws, each officer shall hold office until his successor is elected and qualified, unless a different term is specified in the vote choosing or appointing him, or until his earlier death, resignation or removal.
4.5 RESIGNATION AND REMOVAL. Any officer may resign by delivering his written resignation to the corporation at its principal office or to the President or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.
The Board of Directors, or a committee duly authorized to do so, may remove any officer with or without cause. Except as the Board of Directors may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following his resignation or removal, or any right to damages on account of such removal, whether his compensation be by the month or by the year or otherwise, unless such compensation is expressly provided in a duly authorized written agreement with the corporation.
4.6 VACANCIES. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of the President, Chief Financial Officer and Secretary. Each such successor shall hold office for the unexpired term of his predecessor and until his successor is elected and qualified, or until his earlier death, resignation or removal.
4.7 CHAIRMAN OF THE BOARD AND VICE-CHAIRMAN OF THE BOARD. If the Board of Directors appoints a Chairman of the Board, he shall, when present, preside at all meetings of the Board of Directors. He shall perform such duties and possess such powers as are usually vested in the office of the Chairman of the Board or as may be vested in him by the Board of Directors. If the Board of Directors appoints a Vice Chairman of the Board, he shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties and possess such other powers as may from time to time be vested in him by the Board of Directors.
4.8 PRESIDENT. The President shall be the chief executive officer of the corporation unless such title is assigned to another person. The President shall, subject to the direction of the Board of Directors, have general supervision and control of the business of the corporation. Unless otherwise provided by the directors, he shall preside at all meetings of the stockholders and of the Board of Directors (except as provided in Section 4.7 above). The President shall perform such other duties and shall have such other powers as the Board of Directors may from time to time prescribe.
4.9 VICE PRESIDENTS. Any Vice President shall perform such duties and possess such powers as the Board of Directors or the President may from time to time prescribe. In the event of the absence, inability or refusal to act of the President, the Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors) may perform the duties of the President and when so performing shall have all the powers of and be subject to all the restrictions upon the President. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.
4.10 SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall perform such duties and shall have such powers as the Board of Directors or the President may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the secretary, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board of Directors, to attend all meetings of stockholders and the Board of Directors and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.
Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal or refusal to act of the Secretary, the Assistant Secretary, (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary.
In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the person presiding at the meeting shall designate a temporary secretary to keep a record of the meeting.
4.11 CHIEF FINANCIAL OFFICER AND CONTROLLER. The Chief Financial Officer shall perform such duties and shall have such powers as may from time to time be assigned to him by the Board of Directors or the President. The Chief Financial Officer shall also be the Treasurer of the corporation unless the Board of Directors has appointed another person as the Treasurer. In addition, the Chief Financial Officer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible for all funds and securities of the corporation, to deposit funds of the corporation in depositories selected in accordance with these By-Laws, to disburse such funds as ordered by the Board of Directors, to make proper accounts of such funds, and to render as required by the Board of Directors statements of all such transactions and of the financial condition of the corporation.
The Controller shall perform such duties and possess such powers as the Board of Directors, the President or the Chief Financial Officer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Chief Financial Officer, the Controller, (or if there shall be more than one, the Controllers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Chief Financial Officer.
4.12 BONDED OFFICERS. The Board of Directors may require any officer to give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors upon such terms and conditions as the Board of Directors may specify, including without limitation a bond for the faithful performance of his duties and for the restoration to the corporation of all property in his possession or under his control belonging to the corporation.
4.13 SALARIES. Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors.
ARTICLE 5 - CAPITAL STOCK
5.1 ISSUANCE OF STOCK. Unless otherwise voted by the stockholders and subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any unissued balance of the authorized capital stock of the corporation held in its treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of Directors in such manner, for such consideration and on such terms as the Board of Directors may determine.
5.2 CERTIFICATES OF STOCK. Every holder of stock of the corporation shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, certifying the number and class of shares owned by him in the corporation; provided that, the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares, which uncertificated shares shall be evidenced by a book-entry system maintained by the corporation’s transfer agent or registrar, or a combination of both. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Within a reasonable time after the issuance or transfer of any uncertificated shares, the corporation shall send to the registered owner thereof any written notice prescribed by the General Corporation Law of the State of Delaware. Each stock certificate shall be signed by, or in the name of the corporation by, the Chairman or Vice-Chairman, if any, of the Board of Directors, or the President or a Vice President, and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation. Any or all of the signatures on the certificate may be a facsimile.
Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, the By-Laws, applicable securities laws or any agreement among any number of shareholders or among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.
5.3 TRANSFERS. Subject to the restrictions, if any, stated or noted on the stock certificates, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require, except in the case of uncertificated shares, for which the transfer shall be made only upon receipt of transfer documentation reasonably acceptable to the corporation. Except as may be otherwise required by law, by the Certificate of Incorporation or by these By-Laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-Laws.
5.4 LOST, STOLEN OR DESTROYED CERTIFICATES. The corporation may issue a new certificate of stock, or the corporation may issue uncertificated shares, in place of any previously issued certificate alleged to have been lost, stolen, or destroyed, upon such terms and conditions as the Board of Directors may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar.
5.5 RECORD DATE. The Board of Directors may fix in advance a date as a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders or to express consent (or dissent) to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates.
If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
ARTICLE 6 - INDEMNIFICATION
The corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of Delaware, as that Section may be amended and supplemented from time to time, indemnify any director, officer or trustee which it shall have power to indemnify under the Section against any expenses, liabilities or other matters referred to in or covered by that Section. The indemnification provided for in this Article (i) shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement or vote on stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, (ii) shall continue as to a person who has ceased to be a director, officer or trustee and (iii) shall inure to the benefit of the heirs, executors and administrators of such a person. The corporation’s obligation to provide indemnification under this Article shall be offset to the extent of any other source of indemnification or any otherwise applicable insurance coverage under a policy maintained by the corporation or any other person.
Expenses incurred by a director of the Corporation in defending a civil or criminal action, suit or proceeding by reason of the fact that he is or was a director of the Corporation (or was serving at the Corporation’s request as a director or officer of another corporation) shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized by relevant sections of the General Corporation Law of Delaware.
To assure indemnification under this Article of all such persons who are determined by the corporation or otherwise to be or to have been “fiduciaries” of any employee benefit plan of the corporation which may exist from time to time, such Section 145 shall, for the purposes of this Article, be interpreted as follows: an “other enterprise” shall be deemed to include such an employee benefit plan, including, without limitation, any plan of the corporation which is governed by the Act of Congress entitled “Employee Retirement Income Security Act of 1974,” as amended from time to time; the corporation shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his duties to the corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to such Act of Congress shall be deemed “fines”; and action taken or omitted by a person with respect to an employee benefit plan in the performance of such person’s duties for a purpose reasonably believed by such person to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation.
ARTICLE 7 - GENERAL PROVISIONS
7.1 FISCAL YEAR. Except as from time to time otherwise designated by the Board of Directors, the fiscal year of the corporation shall end on December 31 of each year.
7.2 CORPORATE SEAL. If a corporate seal is required, such seal shall be in such form as shall be approved by the Board of Directors.
7.3 EXECUTION OF INSTRUMENTS. The President, the Chief Executive Officer or the Treasurer shall have power to execute and deliver on behalf and in the name of the corporation any instrument requiring the signature of an officer of the corporation, except as otherwise provided in these By-Laws, or where the execution and delivery of such an instrument shall be delegated by the Board of Directors to some other officer or agent of the corporation.
7.4 WAIVER OF NOTICE. Whenever any notice whatsoever is required to be given by law, by the Certificate of Incorporation or by these By-Laws, a waiver of such notice either in writing signed by the person entitled to such notice or such person’s duly authorized attorney, or by telegraph, cable or any other available method, whether before, at or after the time stated in such waiver, or the appearance of such person or persons at such meeting in person or by proxy, shall be deemed equivalent to such notice.
7.5 VOTING OF SECURITIES. Except as the directors may otherwise designate, the President or Treasurer may waive notice of, and act as or appoint any person or persons to act as, proxy or attorney fact for this corporation (with or without power of substitution) at, any meeting of stockholders or shareholders of any other corporation or organization, the securities of which may be held by this corporation.
7.6 EVIDENCE OF AUTHORITY. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.
7.7 CERTIFICATE OF INCORPORATION. All references in these By-Laws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as amended and in effect from time to time.
7.8 TRANSACTIONS WITH INTERESTED PARTIES. No contract or transaction between the corporation and one or more of the directors or officers, or between the corporation and any other corporation, partnership, association, or other organization in which one or more of the directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or a committee of the Board of Directors which authorizes the contract or transaction or solely because his or their votes are counted for such purpose, if:
(i) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum;
(ii) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or
(iii) The contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee of the Board of Directors, or the stockholders.
Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
7.9 SEVERABILITY. Any determination that any provision of these By-Laws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these By-Laws.
7.10 PRONOUNS. All pronouns used in these By-Laws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.
ARTICLE 8 - AMENDMENTS
8.1 BY THE BOARD OF DIRECTORS. These By-Laws may be altered, amended or replaced or new By-Laws may be adopted by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quorum is present except when a different vote is required by express provision of law, the Certificate of Incorporation or these By- Laws.
8.2 BY THE STOCKHOLDERS. These By-Laws may be altered, amended or repealed or new By-Laws may be adopted by the affirmative vote of the holders of a majority of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at any regular meeting of stockholders, or at any special meeting of stockholders, except when a different vote is required by express provision of law, the Certificate of Incorporation or these By-Laws, provided notice of such alteration, amendment, repeal or adoption of new By-Laws shall have been stated in the notice of such special meeting.
|Charter of the Board of Directors||
This Charter applies to IntelGenx Technologies Corp. and all its subsidiaries and affiliates.
A. RESPONSIBILITIES OF THE BOARD
The board of directors (the “Board”) of IntelGenx Technologies Corp. (the “Corporation”), subject to the Corporation’s articles and by-laws, any contractual obligations of the Corporation, as a whole and through its committees acting honestly and in good faith in the best interest of the Corporation, is responsible for the stewardship and oversight of the affairs, business and effective management of the Corporation including:
|Mandate of the Lead Director/Vice Chair of the Board||
|Compensation Committee Charter||
Overview and Purpose
The Compensation Committee (the “Committee”) is responsible for performing the duties set out in this Charter to enable the Board of Directors (the “Board”, and each Director, a “Director”) to discharge its responsibilities and obligations with respect to:
The Committee will be comprised of a minimum of three independent Directors provided that a majority of the Directors of the Committee shall meet the independence requirements of applicable securities laws, the U.S. Security Exchange Commission and the listing standards of the Toronto Venture Exchange (an “Independent Member”). A Chair of the Committee will be appointed.
The Board will appoint the members of the Committee and the Chair annually following the annual general meeting. The independent Directors of the Board may appoint a member to fill a vacancy or remove and/or replace a member at any time.
Attendance at Meetings
The Committee shall meet as frequently as it determines necessary but not less frequently than three times each year. Meetings may be called by the Chair or by a majority of members. At least forty-eight hours prior notice of such meetings will be given to Committee members, unless otherwise agreed to by all members of the Committee.
Meetings are chaired by the Chair or, in the Chair’s absence, by a member chosen by the Committee. The Chair may establish rules and procedures to be followed at meetings of the Committee. The Committee shall produce written minutes of its meetings and shall provide the Board with a report of its activities and proceedings.
Directors not on the Committee may attend meetings at the invitation of the Chair. Members of the Committee may invite members of management or other outside consultants to attend Committee meetings as determined necessary or desirable.
Responsibilities and Duties
The responsibilities and duties of the Committee with respect to its mandate are set forth below. In addition, the Committee may perform such other duties as may be necessary or appropriate under applicable law, the U.S. Security Exchange Commission, the Toronto Venture Exchange regulations or as may be delegated to the Committee by the Board from time to time.
The Committee has the authority to delegate some or all of its responsibilities to a subcommittee from time to time, provided that the subcommittee is comprised of Independent Members.
|Audit Committee Charter||
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF INTELGENX TECHNOLOGIES CORP.
The primary function of the Audit Committee is to assist the Board of Directors (the “Board”) of IntelGenx Technologies Corp. (the “Corporation”) in fulfilling its oversight responsibilities by reviewing (i) the financial disclosure of the Corporation, including the Corporation’s financial statements provided to shareholders and the public, (ii) the Corporation’s systems of internal controls regarding finance, accounting, legal compliance and ethical behavior, and (iii) the Corporation’s auditing, accounting and financial reporting processes generally. Consistent with this function, the Audit Committee will encourage continuous improvement of, and foster adherence to, the Corporation’s policies, procedures and practices at all levels.
II. Composition and Quorum
The responsibilities of the Audit Committee include the following:
Overseeing financial reporting
Monitoring risk management and internal controls
Monitoring external auditors
IV. Method of operation
Nothing contained in this mandate is intended to expand applicable standards of conduct under statutory or regulatory requirements for the directors of the Corporation or the members of the Audit Committee. Members of the Audit Committee are entitled to rely, absent knowledge to the contrary, on (i) the integrity of the persons and organizations from whom they receive information, (ii) the accuracy and completeness of the information provided, and (iii) representations made by management as to the non-audit services provided to the Corporation by the external auditor. The Audit Committee’s oversight responsibilities are not established to provide an independent basis to determine that (i) management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures, or (ii) the Corporation’s financial statements have been prepared and, if applicable, audited in accordance with generally accepted accounting principles.
While the Audit Committee has the responsibilities and authority set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Corporation’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditors. Nor is it the duty of the Audit Committee to conduct investigations, to resolve disagreements, if any, between management and the external auditor or to assure compliance with laws and regulations.
|Corporate Governance and Nominating Committee Charter||
Overview and Purpose
The Corporate Governance and Nominating Committee (the “Committee”) is responsible for performing the duties set out in this Charter to enable the board of directors (the “Board”, and each director, a “Director”) to discharge its responsibilities and obligations with respect to identifying and recommending candidates for election to the Board and all committees of the Board; The Corporate Governance and Nominating Committee (the “Committee”) is responsible for performing the duties set out in this Charter to enable the board of directors (the “Board”), and each Director to discharge its responsibilities and obligations with respect to:
The Committee will be comprised of a minimum of three Directors provided that a majority of the Directors of the Committee shall meet the independence requirements of applicable securities laws and the listing standards of the Toronto Stock Exchange (an “Independent Member”). A Chair of the Committee will be appointed.
The Board will appoint the members of the Committee and the Chair annually following the annual general meeting. The independent Directors of the Board may appoint a member to fill a vacancy or remove and/or replace a member at any time.
Attendance at Meetings
The Committee shall meet as frequently as it determines necessary but not less frequently than twice each year. Meetings may be called by the Chair or by a majority of members. At least forty-eight hours prior notice of such meetings will be given to Committee members, unless otherwise agreed to by all members of the Committee.
Meetings are chaired by the Chair or, in the Chair’s absence, by a member chosen by the Committee. The Chair may establish rules and procedures to be followed at meetings of the Committee. The Committee shall produce written minutes of its meetings and shall provide the Board with a report of its activities and proceedings.
A quorum for the transaction of business at any meeting of the Committee is a majority of members and the vote of a majority of the members present will be an act of the Committee. Meetings may be conducted with members physically present, or by telephone or other communication facilities which permit all persons participating in the meeting to hear or communicate with each other. A written resolution signed by all Committee members is as valid as one passed at a Committee meeting.
Directors not on the Committee may attend meetings at the invitation of the Chair. Members of the Committee may invite members of management or other outside consultants to attend Committee meetings as determined necessary or desirable.
Responsibilities and Duties
The responsibilities and duties of the Committee with respect to its mandate are set forth below. In addition, the Committee may perform such other duties as may be necessary or appropriate under applicable law, Toronto Stock Exchange regulations or as may be delegated to the Committee by the Board from time to time. The Committee has the authority to delegate some or all of its responsibilities to a subcommittee from time to time, provided that the subcommittee is comprised of Independent Members.
Nomination of Directors
The Committee is responsible for identifying and recommending candidates for election to the Board and all committees of the Board. As part of its mandate with respect to nominating functions, the NC is responsible for:
In considering a potential candidate, the Nomination Committee considers both the qualities and skills that the Board, considered in its entirety, currently possesses and that the Board should possess. Based on the skills and experiences already represented on the Board, the NC will consider the experience, personal attributes and qualities that a candidate should possess in light of the anticipated growth and development of the Corporation. Moreover, the Nomination Committee recognizes the benefits of promoting diversity at the Board level. Diverse perspectives linked in common purpose contribute to innovation and growth of the Corporation. In considering candidates and selecting nominees for the Board, diversity, including gender diversity, is an important factor considered by the Nomination Committee. In assessing a candidate’s suitability, the NC also takes into consideration the existing commitments of the individual to ensure that each member has sufficient time to discharge such member’s duties.
Notwithstanding that the Nomination Committee is charged with the responsibility of identifying potential new Board members, all members of the Board are eligible to put forth candidates for the CGNC Committee to consider. Additionally, the Board may engaged recruiting firms to assist with identifying qualified candidates. Once candidates have been approved by the CGNC Committee and their interest level gauged, the entire Board discusses, both formally and informally, the suitability of a particular candidate.
|Code of Ethics||
The Board of Directors (the “Board”, and each member of the Board, a “Director”) of IntelGenx Technologies Corp., a Delaware corporation (the “Company”) has adopted the following Code of Ethics (the “Code”) to apply to the Chief Executive Officer, each other principal executive officer, the Chief Financial Officer, and Chief Accounting Officer and Corporate Controller, if any, (the Chief Financial Officer, Chief Accounting Officer and Controllers are hereinafter referred to as the “Senior Financial Officers”), as well as to each Director of the Company. The Controllers include higher ranking accounting personnel such as the Corporate Controller, Director of Accounting and Assistant Controller (or their equivalents), if any. The Code is intended to promote ethical conduct and compliance with laws and regulations, to provide guidance with respect to the handling of ethical issues, to implement mechanisms to report unethical conduct, to foster a culture of honesty and accountability, to deter wrongdoing and to ensure fair and accurate financial reporting.
No code or policy can anticipate every situation that may arise. Accordingly, this Code is intended to serve as a source of guiding principles. You are encouraged to bring questions about particular circumstances that may involve one or more of the provisions of this Code to the attention of the Chair of the Audit Committee, who may consult with the Company’s outside legal counsel as appropriate.
The Chief Executive Officer, principal executive officers, Senior Financial Officers and Directors are expected to adhere to a high standard of ethical conduct. The reputation and good standing of the Company depend on how the Company’s business is conducted and how the public perceives that conduct. Unethical actions, or the appearance of unethical actions, are not acceptable. In addition to each of the directives set forth below, the Chief Executive Officer, each principal executive officer, each Senior Financial Officer and Director shall be guided by the following principles in carrying out their duties and responsibilities on behalf of the Company:
3. Integrity of Records and Financial Reporting.
The Chief Executive Officer and Senior Financial Officers are responsible for the accurate and reliable preparation and maintenance of the Company’s financial records. Accurate and reliable preparation of financial records is of critical importance to proper management decisions and the fulfillment of the Company’s financial, legal and reporting obligations. As a public company, the Company files annual and periodic reports and makes other filings with the Securities and Exchange Commission (the “SEC”). It is critical that these reports be timely and accurate. The Company expects those officers who have a role in the preparation and/or review of information included in the Company’s SEC filings to report such information accurately and honestly. Reports and documents the Company files with or submits to the SEC, as well as other public communications made by the Company, should contain full, fair, accurate, timely and understandable disclosure.
The Chief Executive Officer and Senior Financial Officers are responsible for establishing, and together with the Directors or the members of the Company’s Audit Committee, as the case may be, overseeing adequate disclosure controls and procedures and internal controls and procedures, including procedures which are designed to enable the Company to: (a) accurately document and account for transactions on the books and records of the Company and its subsidiaries; and (b) maintain reports, vouchers, bills, invoices, payroll and service records, performance records and other essential data with care and honesty.
To report complaint about our accounting, internal accounting controls or auditing matters or other concerns to the board of directors or the Audit Committee, you may communicate with any of our outside directors as a group or individually.
4. Conflicts of Interest.
You must not participate in any activity that could conflict with your duties and responsibilities to the Company. A “conflict of interest” arises when one’s personal interests or activities appear to or may influence that person’s ability to act in the best interests of the Company. Any material transaction or relationship that reasonably could be expected to give rise to a conflict of interest should be disclosed to the Chair of the Audit Committee. In addition, because conflicts of interest are not always obvious, you are encouraged to bring questions about particular situations to the attention of the Chair of the Audit Committee.
This Code does not describe all possible conflicts of interest that could develop.
Some of the more common conflicts from which you must refrain are set forth below:
5. Corporate Opportunities.
The Chief Executive Officer, principal executive officers, Senior Financial Officers and Directors are prohibited from: (a) taking for themselves personally opportunities related to the Company’s business; (b) using the Company’s property, information, or position for personal gain; or (c) competing with the Company for business opportunities; provided, however, if the Company’s disinterested Directors determine the Company will not pursue such opportunity, after disclosure of all material facts by the individual seeking to pursue the opportunity, the individual may do so.
6. Compliance with Laws, Rules and Regulations.
It is the policy of the Company to comply with all applicable laws, rules and regulations, and the Company expects its Chief Executive Officer, principal executive officers, Senior Financial Officers and Directors shall carry out their responsibilities on behalf of the Company in accordance with such laws, rules and regulations and to refrain from illegal conduct.
7. Encouraging the Reporting of any Illegal or Unethical Behavior.
The Company is committed to operating according to the highest standards of business conduct and ethics and to maintaining a culture of ethical compliance. The Chief Executive Officer, principal executive officers, Senior Financial Officers and Directors should promote an environment in which the Company: (a) encourages employees to talk to supervisors, managers and other appropriate personnel when in doubt about the best course of action in a particular situation; (b) encourages employees to report violations of laws, rules and regulations to appropriate personnel; and (c) informs employees that the Company will not allow retaliation for reports made in good faith.
8. Fair Dealing.
The Chief Executive Officer, principal executive officers, Senior Financial Officers and Directors should deal fairly with the Company’s customers, suppliers, competitors and employees. It is the policy of the Company to prohibit any person from taking unfair advantage of another through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice.
It is the Company’s policy that waivers of this Code will not be granted except in exigent circumstances. Any waivers of this Code may only be granted by a majority of the Board after disclosure of all material facts by the individual seeking the waiver. Any waiver of this Code will be promptly disclosed as required by law or stock exchange regulation.
You should communicate any suspected violations of this Code, or any unethical behavior encompassed by this Code, promptly to the Chair of the Audit Committee. Violations will be taken seriously and investigated by the Board or by a person or persons designated by the Board and appropriate disciplinary action will be taken in the event of any violations of the Code.
If there are any questions involving application of this Code, guidance should be sought from the Chair of the Audit Committee.
It shall also be the policy of the Company that the Chief Executive Officer, principal executive officers, each Director, the Chief Financial Officer, Chief Accounting Officer and Corporate Controller acknowledge receipt of and certify their willingness to adhere to the foregoing annually and file a copy of such certification with the Audit Committee of the Board.
|Director Resignation Policy||
The board of directors (the “Board”) of IntelGenx Technologies Corp. (the “Company”) believes that each director should have the confidence and support of the shareholders of the Company (the “Shareholders”). Accordingly, the Board has unanimously adopted this policy providing for the resignation of directors that are not elected by at least a majority (50% +1 vote) of the votes cast, other than at “contested meetings”. For the purposes of this policy, a “contested meeting” means a meeting of Shareholders at which the number of directors nominated for election is greater than the number of seats available on the Board.
All nominees, whether current directors or not, for election to the Board will be required to confirm that they will abide by this policy.
If a director nominee is not elected by at least a majority (50% +1 vote) of the votes cast by Shareholders with respect to his or her election in accordance with the Company’s By-Laws, the director nominee will be considered by the Board not to have received the support of the Shareholders, even though elected as a matter of corporate law. Such nominee must immediately submit his or her resignation to the Board, effective on acceptance by the Board. The Board will refer the resignation to the corporate governance and nomination committee of the Board (the “Committee”) for consideration. The Committee will consider whether or not to accept the offer of resignation and will make a recommendation to the Board.
Within 90 days following the applicable meeting of the Shareholders, the Board will determine whether to accept or reject the director resignation offer that has been submitted, on the recommendation of the Committee. In considering the Committee’s recommendation, the Board will consider the factors considered by the Committee and such additional information and factors that the Board considers to be relevant. Absent exceptional circumstances that would warrant the continued service of the applicable director on the Board, the Board is expected to accept the resignation of said applicable director. Following the Board’s decision on the resignation, the Board will promptly disclose, via press release, its decision whether to accept the director’s resignation offer, including, without limitation, the reasons for rejecting the resignation offer, if applicable, and send a copy of the press release to the Toronto Stock Exchange (and any other applicable stock exchange on which the Company’s securities may be listed). If a resignation is accepted, the Board may, subject to any applicable corporate law restrictions, (i) leave a vacancy on the Board unfilled until the next annual general meeting of Shareholders, (ii) fill the vacancy by appointing a new director whom the Board considers to merit the confidence of the Shareholders and meet the applicable independence standards, or (iii) call a special meeting of Shareholders to consider a Board nominee to fill the vacant position.
Any director who tenders his or her resignation pursuant to this policy will not be permitted to participate in the meetings of the Board and/or the Committee, if he or she is a member of the Board and/or the Committee, as applicable, at which his or her resignation is considered.
However, if each member of the Committee, or a sufficient number of Committee members did not receive at least a majority (50% +1 vote) of the votes cast with respect to their election in the same meeting, such that the Committee no longer has a quorum, then the remaining members of the Committee, if any, will not consider the resignation offers and the Board will consider whether or not to accept the resignation offers without a recommendation from the Committee.
If a sufficient number of the Board members did not receive at least a majority (50% +1 vote) of the votes cast with respect to their election in the same meeting in accordance with the Company’s By-Laws, such that the Board no longer has a quorum, then such directors receiving a majority of votes withheld will not be permitted to participate in the meetings of the Board during the period where their resignation offers are considered. However these directors will be counted for the purpose of determining whether the Board has quorum.
The Board may adopt such procedures as it sees fit to assist it in its determinations with respect to this policy and shall have the sole and complete authority to interpret and apply this policy.
Adopted by the Board as of March 18, 2022.
|Disclosure, Confidentiality and Trading Policy||
IntelGenx Technologies Corp. (“ISSUER”) is a reporting issuer whose common shares are listed on the TSX (the “TSX”) and the OTCQB.
This policy sets out the policies and procedures which are designed to (i) permit the disclosure of information about ISSUER and its subsidiaries to the public in an informative, timely, accurate and broadly disseminated manner, (ii) ensure that non-publicly disclosed information of ISSUER and its subsidiaries remains confidential, and (iii) ensure that trading of ISSUER’s securities by directors, officers, Employees and certain other persons related to ISSUER and its subsidiaries remains in compliance with applicable securities laws.
These policies and procedures are consistent with the sound disclosure practices reflected in National Policy 51-201 – Disclosure Standards and the rules of the TSX and are intended to comply with Regulation FD (“Regulation FD”), promulgated under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”).
This policy was reviewed and approved by the Board on March 21, 2016.
Definitions Used in this Policy:
Capitalized terms not otherwise defined in herein will have the meanings set forth in Schedule A.
Terms of this Policy:
If there is any question or concern with respect to the application of this policy to any Employee or to any particular circumstance, a Disclosure Officer (in respect of Parts I and II) or an Information Officer (in respect of Part III), as applicable, should be contacted for guidance.
PART I DISCLOSURE
1. Timely Disclosure
ISSUER will publicly disclose Material Information immediately upon it becoming apparent that the information is material, as defined pursuant to applicable laws, except in circumstances where, in the opinion of Disclosure Officers, immediate release of the information would be unduly detrimental to the interests of ISSUER and where, in such an event, ISSUER complies with any confidential filing obligations and maintains confidentiality of such information. Examples of timely disclosure which would be detrimental to the interest of ISSUER may be found in section 13 hereof.
2. Disclosure Officers
For purposes of this policy, the Board will appoint a limited number of Disclosure Officers. Such appointments will be made following each annual general meeting, or at any other times, at the discretion of the Board.
Concurrently with the adoption of this policy, the following senior officers are appointed as Disclosure Officers:
Andre Godin, President and CFO
Horst G. Zerbe, Ph.D., CEO and Chairman
The names of the Disclosure Officers will be given to the market surveillance divisions of IIROC and to the TSX, as principal contacts for ISSUER.
Generally, the Disclosure Officers are the only individuals authorized to communicate with analysts, the media and investors about information concerning ISSUER. Employees who are not Disclosure Officers must not respond under any circumstances to and should refer all inquiries from the investment community, shareholders, media or others to the Disclosure Officers, unless they are specifically authorized to do so by a Disclosure Officer, who has determined that it is appropriate for another Employee, director or officer to discuss information about ISSUER. In those circumstances, the Employee will first advise the Disclosure Officer of the nature of the information to be discussed and, afterwards, advise the Disclosure Officer of what actually was discussed. Employees may not communicate Undisclosed Material Information.
Any Employee who becomes aware of any information which may constitute Material Information must advise a Disclosure Officer as soon as possible.
It is the responsibility of senior management to ensure that the Disclosure Officers are fully informed at all times of ISSUER developments in order that they can evaluate those events that may require disclosure, in accordance with applicable laws, the status of material operational developments, extraordinary transactions, other transactions outside the normal course of business, etc. The Disclosure Officers should also be knowledgeable of ISSUER’s disclosure record and aware of analysts’ reports relating to ISSUER. The Disclosure Officers must ensure that the Board is advised of the disclosure of Material Information.
3. What Constitutes Material Information?
Information is material if it would reasonably be expected to result in a significant change in the market price or value of any of ISSUER’s securities or if the information would be considered important by investors making decisions to buy or sell securities of ISSUER.
There is no simple bright-line standard or test to assess the materiality of information. The Disclosure Officers, when assessing whether any particular matter should be disclosed, should look at a number of factors, including the nature of the information itself, the volatility of ISSUER’s securities and prevailing market conditions. Developments, whether actual or proposed, which are likely to give rise to material information with respect to ISSUER and its business and thus to require prompt disclosure may include those events listed on Schedule B hereto.
If an Employee is unsure whether or not information is material, the Employee should contact a Disclosure Officer before disclosing it to anyone. Employees should be cautious in such matters. If the Disclosure Officer is unable to determine whether or not the information is material, he may convene a meeting of senior management and, if necessary, of the Board, to determine if the information is material, whether or not it should be disclosed or remain confidential, and, if the information needs to be disclosed, the method for disseminating the information.
The Disclosure Officers will also monitor the market’s reaction to information that is publicly disclosed in order to help them assess the market impact of such disclosure thereby assisting ISSUER in making future decisions in respect of the materiality of disclosures.
4. Basic Disclosure Rules
All public disclosure by ISSUER of Material Information pursuant to this policy must be made by way of press release and disseminated through a widely circulated newswire service company.
In order to maintain consistent and accurate disclosure about ISSUER, the following principles should generally be followed:
(a) no selective disclosure is permitted. Previously undisclosed information may not be disclosed to selected persons; if there is disclosure it must be made widely (i.e., by way of a press release and in a manner which complies with Regulation FD);
(b) disclosure must be updated if earlier disclosure has become misleading as a result of intervening events;
(c) disclosure of Material Information should be factual and balanced neither overemphasizing favorable news nor under-emphasizing unfavorable news;
(d) unfavorable information must be disclosed as promptly and completely as favorable information;
(e) half-truths are misleading and as such disclosure must include any information without which the rest of the disclosure would be misleading; and
(f) if Material Information is to be announced at a conference, a shareholders’ meeting, a press conference or other forum, its announcement must be coordinated with an advance general public announcement by way of press release containing the relevant information, and in a manner that complies with Regulation FD.
ISSUER will maintain a routine procedure for all corporate communications. For Material Information, the procedure consists of (i) drafting a press release; (ii) circulating it for review to the Disclosure Officers, as well as other officers, as appropriate, to confirm the accuracy of the information contained in the disclosure; (iii) alerting the TSX and IIROC, particularly if the Material Information is to be released during trading hours of the TSX; and (iv) disseminating the release through a national wire service (with respect to material announcements or announcements involving financial results). ISSUER may also use other distribution channels so as to effect broad dissemination to the public. With the exception of Material Changes requiring immediate disclosure under applicable securities laws, news releases will be released outside of market hours whenever possible.
ISSUER recognizes that posting information to its website will not, in and of itself, satisfy the “generally disclosed” requirement of securities laws. However, ISSUER will post to its website press releases disclosing Material Information and will provide a link to EDGAR and SEDAR, for access to all material documents regarding ISSUER.
Any news release containing financial information based on ISSUER’s financial statements (prior to the release of such financial statements) should be reviewed by the Board or the audit committee of the Board. It is not contemplated that ISSUER will provide “earnings guidance” or other similar types of forward looking information.
5. Forward-Looking Information
Subject to the approval and disclosure procedures provided elsewhere in this policy, ISSUER may provide limited forward-looking information in its continuous disclosure documents, speeches, conference calls or otherwise to enable shareholders and the investment community to better evaluate ISSUER and its strategy prospects and opportunities. ISSUER will attempt to avoid making forward-looking statements that appear misleading, overly optimistic, overly aggressive, lack objectivity or that are not adequately explained. ISSUER will also ensure that such statements are clearly identified as forward-looking. Moreover, such statements will be accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the statements and a description of the factors or assumptions that were used in making the forward-looking statements.
As required under applicable laws, ISSUER will update forward-looking information which continues to be material or which changes materially over time.
6. Correction of Selective or Inaccurate Disclosure
If previously Undisclosed Material Information has been inadvertently disclosed to an analyst or any other person or if Material Information that has been disclosed previously is revealed to be inaccurate or incomplete, the Undisclosed Material Information or the information required to correct any inaccuracy in previously disclosed Material Information must be publicly disclosed immediately by way of press release. The TSX should be contacted and, as need be, a halt in trading in ISSUER securities should be requested pending the issuance of the press release. Pending the public release of the Material Information, the parties who have knowledge of the information should be advised that the information is material and has not been generally disclosed.
Rumors can cause unusual market activity and therefore ISSUER will not comment, affirmatively or negatively, on rumors. This also applies to rumors on the Internet. ISSUER will respond consistently to market rumors in the following manner: “it is our policy not to comment on market rumors or speculation”. If market activity indicates that trading is being unduly influenced by rumors, the TSX may request, or ISSUER may determine, that a clarifying statement be made through a press release. A trading halt may be instituted or requested pending an announcement by ISSUER. If the rumor is true, either in whole or in part, immediate disclosure of Undisclosed Material Information will generally be required. The determination to make disclosure will be made by the Disclosure Officers and, if necessary, by the Board.
8. Contact with Significant Investors, Analysts and Others; Analyst Reports
ISSUER recognizes that meetings with significant investors, analysts and other market participants are an important element of ISSUER’s investor relations program. ISSUER will meet with investors, analysts and other market participants on an individual or small group basis (including participating in industry conferences) as needed and will initiate contacts or respond to calls in a timely, consistent and accurate fashion in accordance with the requirements of this policy. Meetings with analysts may include general discussions regarding ISSUER’s prospects, business environment, management philosophy and long term strategy, but should avoid at any time discussions regarding Undisclosed Material Information. At the beginning of any such meeting, a Disclosure Officer, officer or director of ISSUER will provide the appropriate cautionary language with respect to any forward-looking information and direct participants to publicly available documents containing the estimates and assumptions underpinning the forward-looking information as well as a full discussion of the risks and uncertainties related thereto.
ISSUER recognizes, however, that private meetings carry with them the risk of inadvertent selective disclosure. Immediately following the conclusion of a private meeting, the Disclosure Officers will hold a debriefing session and if such debriefing session uncovers selective disclosure of previously Undisclosed Material Information, ISSUER will promptly disclose such information broadly via news release and in a manner which complies with Regulation FD.
In the event that analyst reports are prepared with respect to the activities and prospects of ISSUER, the Disclosure Officers should avoid getting involved in the content of such reports, except to correct factual errors. Confirmation of, or attempting to influence, an analyst’s opinions or conclusions may be considered to be selective disclosure by ISSUER. “No comment” is an acceptable answer to questions that cannot be answered without violating the rule against selective disclosure. With regard to responding to financial models or drafts of analyst’s reports, it is ISSUER’s policy to review, upon request, the model or report for publicly disclosed factual content only and to give guidance only when assumptions have been made on the basis of incorrect public data. It is imperative that the control of this process be centralized through the Disclosure Officers. ISSUER should confirm in writing that its review has been limited to publicly available factual information and detail what information (if any) has been provided. ISSUER will not confirm, or attempt to influence, an analyst’s opinions or conclusions and will not express comfort with an analyst’s model or earnings estimate.
ISSUER will not redistribute analyst reports to persons outside of ISSUER (including by posting such reports on its website).
ISSUER will consider including in its regular periodic disclosures (such as its quarterly and annual management discussion and analysis disclosure) details about topics of interest to analysts, investors and other market participants as a means of providing more information to the marketplace generally and limiting its “selective disclosure” risks.
9. “Quiet Periods”
In order to limit the potential for selective disclosure or even the perception or appearance of selective disclosure, ISSUER will observe a “quiet period” during which time there will be no comment with respect to the current financial period’s operations or expected results. The quiet period will normally commence on the 15th day following the end of the first, second, and third quarter financial periods and on the 30th day following the end of the fourth quarter financial period and ending on the earlier of (i) the issuance of a press release disclosing the financial results or (ii) the filing of the relevant financial statements.
10. Notification of Market Surveillance
When the TSX is open for trading, advance notice of a press release announcing Material Information must be provided to the market surveillance department (or similar department) of IIROC and the TSX to determine if a halt in trading is necessary to provide time for the market to digest the news. When a press release announcing Material Information is issued outside of trading hours, the market surveillance department of IIROC should be notified before the opening of the market. Copies of all press releases should be supplied to the relevant securities regulators immediately.
11. Disclosure Record
The Disclosure Officers will maintain, or cause to be maintained, a file containing all public information about ISSUER. This includes news releases, brokerage research reports, if any, reports in the press and notes, if any, from meetings with analysts, significant investors and other market participants.
12. Electronic Communications; ISSUER Website
This policy also applies to electronic communications, including ISSUER’s website. Accordingly, the Disclosure Officers are also responsible for electronic communication of Material Information.
The Chief Financial Officer, or the Chief Financial Officer’s designee, is responsible for updating the investor relations section of ISSUER’s website and for monitoring all information placed on the website to ensure that it is accurate, complete, up-to-date and in compliance with relevant securities laws.
Investor relations material will be contained within a separate section of ISSUER’s website and will include a notice that advises the reader that the information posted was accurate as at the time of posting, but may be superseded by subsequent disclosures. All data posted to ISSUER’s website, including text and audiovisual material, will show the date such material was posted.
Disclosure on ISSUER’s website alone does not constitute adequate disclosure of information that is considered Undisclosed Material Information. Any disclosure of Material Information on the website will be preceded by the issuance of a press release.
The Chief Financial Officer, or the Chief Financial Officer’s designee, is also responsible for responses to electronic inquiries regarding Material Information. Only public information or information which could otherwise be provided in accordance with this policy will be utilized in responding to electronic inquiries.
In order to ensure that no Undisclosed Material Information is inadvertently disclosed, Employees may not participate in Internet chat rooms or newsgroup discussions on matters pertaining to ISSUER’s activities or its securities. Employees who encounter a discussion pertaining to ISSUER should advise a Disclosure Officer promptly, so that discussion may be monitored, if determined appropriate.
ISSUER will not host or link to chat rooms, bulletin boards or news groups and will not link to or post analyst’s reports on its website.
PART II CONFIDENTIALITY
13. When Information May Be Kept Confidential
Where the immediate disclosure of Material Information would be unduly detrimental to the interests of ISSUER, its disclosure may be delayed and kept confidential temporarily. Keeping information confidential can only be justified where the potential harm to ISSUER or to investors caused by immediate disclosure may reasonably be considered to outweigh the undesirable consequences of delaying disclosure and where confidentiality of the information is maintained.
Examples of circumstances in which disclosure might be unduly detrimental to the interests of ISSUER include: (i) where the release of information would prejudice the ability of ISSUER to pursue specific and limited objectives or to complete a transaction that is underway; (ii) where the disclosure of the information would provide competitors with confidential information that would be of significant benefit to them or would undermine the competitive position of ISSUER; and (iii) where the disclosure of information concerning the status of ongoing negotiations would prejudice the successful completion of those negotiations.
All decisions to keep Material Information confidential must be made by the Disclosure Officers or, if necessary, by the Board. In such circumstances, ISSUER will comply with any obligation to make a confidential filing with applicable securities regulators and maintain confidentiality of the information.
14. Access to Confidential Information
Employees will be given access to confidential information on an “as needed” basis only and must not disclose that information to anyone except with the prior approval of a Disclosure Officer and where such disclosure is in the necessary course of business (e.g., discussions with ISSUER’s bankers or advisers where the disclosure of the confidential information is necessary and the persons receiving it understand that it is to be kept confidential). Other circumstances where disclosure may be considered in the “necessary course of business” include communications with: (i) vendors, suppliers or strategic partners; (ii) Employees, officers and directors; (iii) lenders, legal counsel, auditors, financial advisors and underwriters; (iv) parties to negotiations; (v) labour unions and industry associations; (vi) government agencies in non-governmental regulators; and (vii) credit rating agencies. Selective disclosure of Material Information to an analyst, institutional investor or other market professional is not generally considered in the “necessary course of business”.
Employees must not discuss confidential information in situations where they may be overheard or participate in discussions regarding decisions by others about investments in ISSUER.
15. Disclosure of Confidential Information
In the event that confidential information, or rumors respecting the same, is divulged in any manner (other than in the necessary course of business), ISSUER is required to make an immediate announcement on the matter. IIROC and the TSX must be notified of the announcement in advance in the usual manner.
16. Disclosure of Information to Outsiders
Before a meeting with other parties at which Undisclosed Material Information of ISSUER may be discussed in compliance with this policy, the other parties should be told that they must not divulge that information to anyone else, other than in the necessary course of business, and that they may not trade in ISSUER’s securities until after the information is publicly disclosed and a reasonable period of time for its dissemination has passed. In such circumstances, the feasibility of having such parties enter into a confidentiality agreement with ISSUER should be considered.
PART III TRADING POLICY
17. Purpose of this Policy
The rules and procedures outlined in this policy have been implemented in order to prevent improper trading in securities of ISSUER by directors, officers and Employees who may come into possession of Undisclosed Material Information. Securities laws prohibit “insider trading” and impose restrictions on trading in securities while in possession of Undisclosed Material Information. Strict adherence to this policy will promote investor confidence in securities of ISSUER by assuring to the investing community that persons who have access to Undisclosed Material Information will not make use of it by trading in securities of ISSUER before the information has been disclosed and properly disseminated. This policy supplements, and does not replace, applicable securities laws in respect of insider trading.
18. General Prohibition
In accordance with the prohibition set forth by applicable securities laws, no Restricted Persons may trade in the securities of ISSUER when they are aware of Undisclosed Material Information, regardless of whether or not a specified Blackout Period has been imposed. In addition, Restricted Persons are prohibited from informing, or “tipping”, anyone else about that information, other than in the necessary course of business (see Section 14 above), or informing anyone else about an imposed Blackout Period. Anonymous disclosure of information is also prohibited. 9
This prohibition extends to other securities whose price or value may reasonably be expected to be affected by changes in the price of ISSUER’s securities and includes the granting or exercise of stock options.
Rapid buying and selling by Restricted Persons of ISSUER’s securities is strongly discouraged because of the possible perception of trading on Undisclosed Material Information.
In addition, Restricted Persons should be cautious in such matters and when Restricted Persons intend to transact in ISSUER’s securities, they should contact an Information Officer to advise such officer accordingly and obtain such officer’s consent before executing any trades in securities of ISSUER (which includes the exercise of stock options), even if they are not aware of information that would constitute Undisclosed Material Information.
19. Information Officers
For purposes of this Policy, the Board will appoint one or more Information Officers. Such appointments will be made following each annual general meeting or at other times at the discretion of the Board.
Concurrently with the adoption of this policy, the following officers are appointed as Information Officers:
Telephone: 514 331 7440 Ext. 202
President and CFO
Telephone: 514 331 7440 Ext. 203
20. Undisclosed Material Information of Other Companies
Where Restricted Persons become aware of Undisclosed Material Information concerning another public company, they may not trade in the securities of that company until the information is publicly disclosed and a reasonable period of time for its dissemination has passed. Generally, a “reasonable period of time” will be one business day; however, it may be shorter or longer depending upon the particular market following of that other company. An Information Officer should be consulted to determine what would be a “reasonable period of time” in the circumstances.
21. Restricted Persons
Restricted Persons are prohibited from trading whenever there are Pending Material Developments, even if they are unaware of the details of same. In the circumstances where there are Pending Material Developments with respect to ISSUER, a communication will be sent to all Restricted Persons, if it is determined appropriate, informing them of the commencement of a Blackout Period with respect to such Pending Material Development at which time they will cease trading until further notice. No reason for the trading restriction will be provided.
Transactions that may be necessarily justifiable for independent reasons (as in a family emergency situation) are no exceptions to the restrictions set forth in this policy.
The Information Officers will make the determination as to when a pending transaction constitutes a Pending Material Development. As guidance, a Blackout Period must at least commence once negotiations on a proposed transaction have progressed to a point where it reasonably could be expected that the market price of ISSUER’s securities would materially change if the status of the transaction were publicly disclosed.
22. Blackout Period
No Restricted Person will trade in ISSUER’s securities when Material Information has not been disclosed and for a reasonable period of time following the disclosure of that information. Open orders must also be cancelled during a Blackout Period. The purpose of the Blackout Period is to allow the market to fully reflect the Material Information in the price of ISSUER’s securities. The Information Officers will be responsible for setting the length of the Blackout Period and notifying Restricted Persons of it. Once notified of a Blackout Period, Restricted Persons are prohibited from disclosing non-routine Blackout Periods to others. Routine Blackout Periods for routine and scheduled announcements, that can often be material, such as quarterly and annual financial information, will be set as follows:
Within the Routine Blackout Periods, the Information Officer or the Board can make individual determinations on whether there is any undisclosed Material Information, as required.
23. Insider Trading and Inside Trading reports
Pursuant to the National Instrument 55-104 – Insider Reporting Requirements and Exemptions, Reporting Insiders are required to file insider trading reports within five days of a change in their ownership position in any securities of ISSUER (this includes the grant of options or other convertible securities to such persons or the exercise by them of such options or convertible securities). Reporting Insiders are also required to file on SEDI an “initial” insider report within 10 days of the date on which the person or ISSUER became a reporting insider (an initial report is not required, however, when a person becomes an insider if he/she has no direct or indirect beneficial ownership, control or direction over securities of ISSUER). Notwithstanding the fact that ISSUER may offer to a Reporting Insider to file its insider reports, it remains an obligation of the Reporting Insider to comply with all applicable laws.
Directors and executive officers are also subject to filing requirements pursuant to Section 16 of the Exchange Act. An initial insider report on Form 3 must be completed within 10 calendar days of the date an individual becomes a Section 16 insider. In addition, an insider must file a Form 4 by the second business day after the execution of a transaction that results in a change in beneficial ownership of equity securities of the ISSUER (unless the transaction is exempted from the Form 4 reporting requirement under applicable rules). In addition, a Form 5 is required to be filed on or before the 45th calendar day after the end of the ISSUER’S fiscal year. No Form 5 is required to be filed if the insider has already reported all reportable transactions on a Form 4. The filing of a Forms 3, 4 and 5 will be coordinated by the Corporate Secretary. Accordingly, the Corporate Secretary must be advised immediately of any changes (direct or indirect) in a director’s or executive officer’s ownership of ISSUER securities so that the necessary Form 4 may be completed and filed with two business days of such change. Each director or executive officer is responsible for the accuracy and timeliness of his or her Section 16 filing requirements.
All Restricted Persons must notify the Information Officer prior to entering into any transaction in the securities of ISSUER to obtain its consent before completing such transaction. A Restricted Person may not trade in the securities of ISSUER without such consent.
24. Section 16 Short Swing Profit Rule
Section 16(b) of the Exchange Act prevents certain insiders from realizing any “short-swing profit” in ISSUER securities. Any profit realized by an Insider on a purchase and sale or sale and purchase of equity securities of the ISSUER within any six-month period belongs to and is recoverable by the ISSUER, and any stockholder may bring an action for collection on behalf of the ISSUER. Certain insider transactions will be matched so that the greatest profit may be recovered. Insiders should carefully review with their legal advisor any proposed transaction to ensure that it will not result in their “profit” being disgorged to the ISSUER.
25. Rule 144 Requirements
All ISSUER securities sold by or on behalf of Insiders in the public market must be sold in accordance with the technical requirements of Rule 144, including the filing of a Form 144 with the SEC prior to or concurrently with the trade, even if the securities were purchased in the open market. A knowledgeable broker can assist you with the necessary paperwork. Please provide advance notice of a proposed sale to the ISSUER’S Information Officer in order to expedite the process, resolve any issues and avoid any Rule 144 violations. Please note that special considerations apply to the preparation and filing of Forms 144 that relate to sales pursuant to pre-approved trading plans.
26. Exercise of Tax Withholding Right.
The ISSUER’S prohibition on purchases and sales of ISSUER securities during blackout periods does not apply to the exercise of a tax withholding right pursuant to which the exercisor elects to have the ISSUER withhold shares subject to an option to satisfy tax withholding requirements.
27. Prior Notice of Securities Transactions
This Section 27 applies to:
No person covered by this Section 27 may make any purchase or sale of securities of the ISSUER (including derivative securities) unless he or she notifies, and obtains preclearance
from, the Information Officer prior to such purchase or sale. Promptly following execution of the purchase or sale, the person covered by this Section 27 should notify the Corporate Secretary as to facilitate the insider reporting obligations within two business days of the transaction (U.S. law) and five days of the transaction (Canadian law).
28. Short Sales, Derivatives and Margin Purchases
No Restricted Person will engage in the short sale of ISSUER securities with the exception of the exercise of stock option or ISSUER issued warrants or securities in connection with a same day sale. A short sale is a sale of securities not owned by the seller, or if owned, not delivered against such a sale within 20 days thereafter (a “short against the box”). A short sale of ISSUER’s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore, signal to the market that the seller has no confidence in ISSUER or its short-term prospects.
No Restricted Person will invest in ISSUER-based derivative securities. “Derivative securities” are options, warrants, stock appreciation rights or similar rights whose value is derived from the value of an equity security, such as ISSUER's common shares. This prohibition includes, but is not limited to, trading in ISSUER-linked put or call, option contracts, trading in straddles and the like.
No Restricted Person will purchase securities of ISSUER on margin. Margin purchases can become problematic if the brokerage has to liquidate securities to meet a margin call during a Blackout Period.
PART IV ENFORCEMENT AND REVIEW
29. Communication and Enforcement
This policy extends to all directors, officers and Employees, and any committee of ISSUER and its subsidiaries and their respective subsidiaries, if any, and their respective boards of directors and authorized spokespersons. New directors, officers and Employees will be provided with a copy of this policy and will be advised of its importance.
Any Employee who violates this policy may face disciplinary action up to and including termination of their employment with ISSUER or its subsidiaries without notice. The violation of this policy may also violate certain securities laws. If it appears that an employee may have violated such securities laws, ISSUER may refer the matter to the appropriate regulatory authorities, which could lead to penalties, fines or imprisonment. ISSUER may also be entitled to pursue legal remedies through the courts.
30. Policy Review and Oversight
The President and Chief Executive Officer will have overall responsibility for developing and implementing this policy, monitoring the effectiveness of and compliance with this policy and informing ISSUER’s directors, officers and Employees about this policy and its importance.
ISSUER will review this policy annually to ensure that it is achieving its purpose and remains current based on the activities of ISSUER at the time of review. Based on the results of the review, this policy may be revised accordingly. The Chairman of the Human Resources and Corporate Governance Committee will be responsible for initiating the annual review.
Any changes to this policy will be approved by the Board.
SCHEDULE A DEFINITIONS
“Blackout Period” means the period during which Employees and other Restricted Persons are prohibited from trading in ISSUER’s securities;
“Board” means the board of directors of ISSUER;
“Disclosure Officers” means the individuals who are responsible for communicating with analysts, the news media and investors and ensuring that other Employees do not communicate confidential information about ISSUER;
“Employees” means all individuals currently employed by ISSUER and its subsidiaries who may become aware of Undisclosed Material Information;
“IIROC” means the Investment Industry Regulatory Organization of Canada;
“Information Officers” means the individuals whom Restricted Persons may contact to determine whether or not they may execute trades in the market or reveal Undisclosed Material Information in the necessary course of business;
“Insiders” will have the meaning ascribed thereto pursuant to the Securities Act (Ontario);
“Material Change” means a change in the business, operations or capital of ISSUER that would reasonably be expected to have a significant effect on the market price or value of any of the securities of ISSUER and includes a decision to implement the change by the Board or by senior management of ISSUER who believe that confirmation of the decision by the Board is probable;
“Material Fact” means a fact that significantly affects or would reasonably be expected to have a significant effect on the market price or value of ISSUER’s securities;
“Material Information” means any Material Fact or Material Change;
“Pending Material Developments” means a proposed transaction of ISSUER that would constitute Material Information, however, a decision to proceed with the transaction has not been made by the Board or by senior management, although there is an expectation of concurrence from the Board;
“Reporting Insiders” will have the meaning ascribed thereto in Regulation 55-104 - Insider Reporting Requirements and Exemptions;
“Restricted Persons” means:
(a) directors and officers of ISSUER;
(c) a person employed by ISSUER or retained by it on a professional or consulting basis;
(d) affiliates or associates of ISSUER;
(e) a person proposing to become a party to a reorganization, amalgamation, merger, or similar business relationship with ISSUER; and
(f) a person who receives specific confidential information from a person previously described; and
“Undisclosed Material Information” means Material Information pertaining to ISSUER that has not been publicly disclosed or information that has been publicly disclosed, but a reasonable period of time for its dissemination has not passed.
SCHEDULE B EXAMPLES OF POTENTIALLY MATERIAL INFORMATION
The following are examples of the types of events or information which may be material to ISSUER. This list is not exhaustive and is based on the examples provided by National Policy 51-201 – Disclosure Standards and the Policies of the TSX.
Changes in Corporate Structure
Changes in Capital Structure
Changes in Financial Results
Changes in Business and Operations
Acquisitions and Dispositions
Changes in Credit Arrangements