DIVISION 6

CORPORATE GOVERNANCE

Shareholders

Place of meetings

725. Meetings of shareholders of a bank holding company shall be held at the place within Canada provided for in the by-laws of the bank holding company or, in the absence of any such provision, at the place within Canada that the directors determine.

Calling meetings

726. (1) The directors of a bank holding company

    (a) shall, after the meeting called pursuant to subsection 701(1), call the first annual meeting of shareholders of the bank holding company, which meeting must be held not later than six months after the end of the first financial year of the bank holding company, and subsequently call an annual meeting of shareholders, which meeting must be held not later than six months after the end of each financial year; and

    (b) may at any time call a special meeting of shareholders.

Fixing record date

(2) For the purpose of determining shareholders

    (a) entitled to receive payment of a dividend,

    (b) entitled to participate in a liquidation distribution, or

    (c) for any other purpose except the right to receive notice of, or to vote at, a meeting,

the directors may fix in advance a date as the record date for the determination of shareholders, but the record date so fixed shall not precede by more than fifty days the particular action to be taken.

Record date for meetings

(3) For the purpose of determining shareholders entitled to receive notice of a meeting of shareholders, the directors may fix in advance a date as the record date for the determination of shareholders, but the record date so fixed shall not precede by more than fifty days or by less than twenty-one days the date on which the meeting is to be held.

No record date fixed

(4) If no record date is fixed pursuant to subsection (2) or (3),

    (a) the record date for the determination of shareholders for any purpose, other than to establish a shareholder's right to receive notice of a meeting or to vote, is the day on which the directors pass the resolution relating to the particular purpose; and

    (b) the record date for the determination of shareholders entitled to receive notice of, or to vote at, a meeting of shareholders is

      (i) the day immediately preceding the day on which the notice is given, or

      (ii) if no notice is given, the day on which the meeting is held.

When record date fixed

(5) When a record date is fixed for a bank holding company, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the central securities register at the close of business on the date the directors fix the record date, notice thereof shall, not less than seven days before the record date, be given

    (a) by advertisement in a newspaper in general circulation in the place where the head office of the bank holding company is situated and in each place in Canada where the bank holding company has a transfer agent or where a transfer of the bank holding company's shares may be recorded; and

    (b) by written notice to each stock exchange, if any, in Canada on which the shares of the bank holding company are listed for trading.

Notice of meeting

727. (1) Notice of the time and place of a meeting of shareholders of a bank holding company shall be sent not less than twenty-one days or more than fifty days before the meeting

    (a) to each shareholder entitled to vote at the meeting;

    (b) to each director; and

    (c) to the auditor of the bank holding company.

Number of eligible votes

(2) A bank holding company with equity of five billion dollars or more shall set out in the notice of a meeting the number of eligible votes, as defined under subsection 156.09(1), that may be cast at the meeting as of the record date for determining those shareholders entitled to receive the notice of meeting, or if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting.

Publication in newspaper

(3) In addition to the notice required under subsection (1), where any class of shares of a bank holding company is publicly traded on a recognized stock exchange in Canada, notice of the time and place of a meeting of shareholders shall be published once a week for at least four consecutive weeks before the date of the meeting in a newspaper in general circulation in the place where the head office of the bank holding company is situated and in each place in Canada where the bank holding company has a transfer agent or where a transfer of the bank holding company's shares may be recorded.

When notice not required

728. (1) A notice of a meeting of shareholders is not required to be sent to shareholders who were not registered on the records of the bank holding company or its transfer agent on the record date fixed or determined under subsection 726(3) or (4).

Effect of default

(2) Failure to receive a notice of a meeting of shareholders does not deprive a shareholder of the right to vote at the meeting.

Notice of adjourned meeting

729. (1) If a meeting of shareholders is adjourned for less than thirty days, it is not necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned.

Notice where adjournment is longer

(2) If a meeting of shareholders is adjourned by one or more adjournments for a total of thirty days or more, notice of the continuation of the meeting shall be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for a total of more than ninety days, subsection 156.04(1) does not apply.

Special business

730. (1) All matters dealt with at a special meeting of shareholders and all matters dealt with at an annual meeting of shareholders, except consideration of the financial statements, report of the auditor, election of directors, remuneration of directors and reappointment of the incumbent auditor, are deemed to be special business.

Notice of special business

(2) Notice of a meeting of shareholders at which special business is to be transacted must

    (a) state the nature of the special business in sufficient detail to permit a shareholder to form a reasoned judgment thereon; and

    (b) contain the text of any special resolution to be submitted to the meeting.

Waiver of notice

731. (1) A shareholder and any other person entitled to attend a meeting of shareholders may in any manner waive notice of a meeting of shareholders.

Attendance is waiver

(2) Attendance at a meeting of shareholders is a waiver of notice of the meeting, except when a person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Shareholder's proposal

732. (1) A shareholder entitled to vote at an annual meeting of shareholders of a bank holding company may

    (a) submit to the bank holding company notice of any matter that the shareholder proposes to raise at the meeting; and

    (b) discuss at the meeting any matter in respect of which the shareholder would have been entitled to submit a proposal.

Circulation of proposal

(2) A bank holding company shall attach any proposal of a shareholder submitted for consideration at a meeting of shareholders to the notice of the meeting.

Shareholder's statement

(3) If so requested by a shareholder who submits a proposal to a bank holding company, the bank holding company shall attach to the notice of the meeting a statement by the shareholder of not more than two hundred words in support of the proposal and the name and address of the shareholder.

Nominations for directors

(4) A proposal may include nominations for the election of directors if the proposal is signed by one or more holders of shares representing in the aggregate not less than 5 per cent of the shares or 5 per cent of the shares of a class of shares of the bank holding company entitled to vote at the meeting to which the proposal is to be presented.

Conditions precedent for proposals

(5) A bank holding company is not required to comply with subsections (2) and (3) if

    (a) the proposal is not submitted to the bank holding company at least ninety days before the anniversary date of the previous annual meeting of shareholders;

    (b) it clearly appears that the proposal is submitted by the shareholder primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the bank holding company or its directors, officers or security holders, or primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes;

    (c) the bank holding company, at the shareholder's request, attached to the notice of a meeting of shareholders held within two years preceding the receipt of the request, and the shareholder failed to present the proposal, in person or by proxy, at the meeting;

    (d) substantially the same proposal was submitted to shareholders in a dissident's proxy circular relating to, or was attached to the notice of, a meeting of shareholders held within two years preceding the receipt of the shareholder's request and the proposal was defeated; or

    (e) the rights conferred by subsections (1) to (4) are being abused to secure publicity.

Immunity for proposal and statement

(6) No bank holding company or person acting on behalf of a bank holding company incurs any liability by reason only of circulating a proposal or statement in compliance with subsections (2) and (3).

Refusal of proposal

733. (1) If a bank holding company refuses to attach a proposal to a notice of a meeting, the bank holding company shall, within ten days after receiving the proposal, notify the shareholder submitting the proposal of its intention to not attach the proposal to the notice of the meeting and send to the shareholder a statement of the reasons for the refusal.

Appeal to court

(2) On the application of a shareholder claiming to be aggrieved by a bank holding company's refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.

Appeal to court

(3) A bank holding company or any person claiming to be aggrieved by a proposal may apply to a court for an order permitting the bank holding company to not attach the proposal to the notice of a meeting, and the court, if it is satisfied that subsection 732(5) applies, may make such order as it thinks fit.

Notice to Superinten-
dent

(4) An applicant under subsection (2) or (3) shall give the Superintendent written notice of the application and the Superintendent may appear and be heard at the hearing of the application in person or by counsel.

Shareholder list

734. (1) A bank holding company shall prepare a list, which may be in electronic form, of its shareholders entitled to receive notice of a meeting under paragraph 727(1)(a), arranged in alphabetical order and showing the number of shares held by each shareholder, which list must be prepared

    (a) if a record date is fixed under subsection 726(3), not later than ten days after that date; or

    (b) if no record date is fixed,

      (i) at the close of business on the day immediately preceding the day on which the notice is given, or

      (ii) where no notice is given, on the day on which the meeting is held.

Effect of list

(2) Where a bank holding company fixes a record date under subsection 726(3), a person named in the list prepared under paragraph (1)(a) is, subject to this Part, entitled to vote the shares shown opposite that person's name at the meeting to which the list relates, except to the extent that

    (a) the person has transferred the ownership of any of those shares after the record date, and

    (b) the transferee of those shares

      (i) produces properly endorsed share certificates, or

      (ii) otherwise establishes that the transferee owns the shares,

    and demands, not later than ten days before the meeting or such shorter period before the meeting as the by-laws of the bank holding company provide, that the transferee's name be included in the list before the meeting,

in which case the transferee may vote those transferred shares at the meeting.

Effect of list

(3) Where a bank holding company does not fix a record date under subsection 726(3), a person named in the list prepared under paragraph (1)(b) is, subject to this Part, entitled to vote the shares shown opposite that person's name at the meeting to which the list relates, except to the extent that

    (a) the person has transferred the ownership of any of those shares after the date on which a list was prepared under subparagraph (1)(b)(i), and

    (b) the transferee of those shares

      (i) produces properly endorsed share certificates, or

      (ii) otherwise establishes that the transferee owns the shares,

    and demands, not later than ten days before the meeting or such shorter period before the meeting as the by-laws of the bank holding company provide, that the transferee's name be included in the list before the meeting,

in which case the transferee may vote those transferred shares at the meeting.

Examination of list

(4) A shareholder of a bank holding company may examine the list of shareholders referred to in subsection (1)

    (a) during usual business hours at the head office of the bank holding company or at the place where its central securities register is maintained; and

    (b) at the meeting of shareholders for which the list was prepared.

Quorum

735. (1) Unless the by-laws otherwise provide, a quorum of shareholders is present at a meeting of shareholders if the holders of a majority of the shares who are entitled to vote at the meeting are present in person or represented by proxyholders.

Quorum present at opening

(2) If a quorum is present at the opening of a meeting of shareholders, the shareholders present may, unless the by-laws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting.

Quorum not present at opening

(3) If a quorum is not present at the opening of a meeting of shareholders, the shareholders present may adjourn the meeting to a fixed time and place but may not transact any other business.

One shareholder meeting

736. If a bank holding company has only one shareholder, or only one holder of any class or series of shares, the shareholder present in person or represented by a proxyholder constitutes a meeting of shareholders or a meeting of shareholders of that class or series.

One share - one vote

737. Subject to subsection 156.09, if a share of a bank holding company entitles the holder of the share to vote at a meeting of shareholders, that share entitles the shareholder to one vote at the meeting.

Represen-
tative shareholder

738. (1) If an entity is a shareholder of a bank holding company, the bank holding company shall recognize any natural person authorized by a resolution of the directors or governing body or similar authority of the entity to represent it at meetings of shareholders of the bank holding company.

Powers

(2) A natural person authorized under subsection (1) to represent an entity may exercise on behalf of the entity all the powers the entity could exercise if it were a natural person as well as a shareholder.

Joint shareholders

739. Unless the by-laws otherwise provide, if two or more persons hold shares jointly, one of those holders present at a meeting of shareholders may in the absence of the others vote the shares, but if two or more of those persons who are present in person or represented by proxyholder vote, they shall vote as one on the shares jointly held by them.

Voting by hands or ballot

740. (1) Unless the by-laws otherwise provide, voting at a meeting of shareholders shall take place by show of hands except when a ballot is demanded by either a shareholder or proxyholder entitled to vote at the meeting.

Ballot

(2) A shareholder or proxyholder may demand a ballot either before or after any vote by show of hands.

Resolution in lieu of meeting

741. (1) Except where a written statement is submitted by a director under section 762 or by an auditor under subsection 853(1),