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Bill C-91

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First Reading

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Copy to Director	(3) When a management proxy circular or dissident's proxy circular is sent, a copy of it must be sent to the Director together with a statement in the prescribed form and a copy of any notice of meeting, form of proxy and any other documents for use in connection with the meeting.
Preliminary proxy circular	(4) A person may, despite subsection (1), commence a solicitation if they have filed a preliminary proxy circular with the cooperative and the Director, as long as the form of proxy is not sent before the proxy circular in final form is sent.
Exemption order	167. (1) On the application of any interested person, the Director may, even retrospectively, exempt, on any terms that the Director thinks fit, the person from any of the requirements of section 165 or subsection 166(1).
Publication	(2) The Director must set out in a publication generally available to the public the particulars of all exemptions granted under this section together with the reasons for the exemptions.
Attendance at meeting	168. (1) An individual who solicits a proxy and is appointed proxyholder shall attend the meeting in respect of which the proxy is given in person, or cause an alternate proxyholder to attend it, and shall comply with the directions of the shareholder who appointed the proxyholder.
Rights of a proxyholder	(2) A proxyholder or an alternate proxyholder has the same rights as the shareholder who appointed the proxyholder to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except if the proxyholder or alternate proxyholder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by a show of hands.
Show of hands	(3) Despite subsections (1) and (2), if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot is conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what to the knowledge of the chairperson will be the decision of the meeting in relation to any matter or group of matters is less than five per cent of all the votes that might be cast by shareholders present in person or represented by proxy at the meeting on the ballot, unless a shareholder or proxyholder demands a ballot,
	(a) the chairperson may conduct the vote in respect of that matter or group of matters by a show of hands; and
	(b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by a show of hands.
Duty of intermediary	169. (1) Shares of a cooperative that are registered in the name of an intermediary or a nominee of an intermediary and not beneficially owned by the intermediary must not be voted unless the intermediary, without delay after receipt of the notice of the meeting, management proxy circular, dissident's proxy circular and any other documents other than the form of proxy sent to shareholders by or on behalf of any person for use in connection with the meeting, sends a copy of the document to the beneficial owner and, except when the intermediary has received written voting instructions from the beneficial owner, a written request for those instructions.
Beneficial owner unknown	(2) An intermediary may not vote or appoint a proxyholder to vote shares registered in the name of the intermediary or in the name of a nominee of the intermediary that the intermediary does not beneficially own unless the intermediary receives voting instructions from the beneficial owner.
Copies	(3) A person by or on behalf of whom a solicitation is made must provide, at the request of an intermediary, without delay, to the intermediary at the person's expense the necessary number of copies of the documents referred to in subsection (1), other than copies of the document requesting voting instructions.
Instructions to intermediary	(4) An intermediary shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.
Beneficial owner as proxyholder	(5) If requested by a beneficial owner, an intermediary must appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.
Validity	(6) The failure of an intermediary to comply with this section does not render null or void any meeting of shareholders or any action taken at the meeting.
Limitation	(7) Nothing in this section gives an intermediary the right to vote shares that the intermediary is otherwise prohibited from voting.
Restraining order	170. (1) If a form of proxy, management proxy circular or dissident's proxy circular contains an untrue statement of a material fact or omits to state a material fact required in it or necessary to make a statement contained in it not misleading in the light of the circumstances in which it was made, the Director or any other interested person may apply to a court and the court may make any order it thinks fit, including
	(a) an order restraining the solicitation or the holding of the meeting, or restraining any person from implementing or acting on a resolution passed at the meeting to which the form of proxy, management proxy circular or dissident's proxy circular relates;
	(b) an order requiring correction of any form of proxy or proxy circular and a further solicitation; and
	(c) an order adjourning the meeting.
Notice to Director	(2) An applicant under this section must give the Director notice of the application and the Director is entitled to appear and to be heard in person or by counsel.
	PART 10
	INSIDER TRADING
Interpreta- tion	171. (1) The definitions in this subsection apply in this Part.
``business combination'' « regroupe- ment d'entrepri- ses »	``business combination'' means an acquisition of all or substantially all the property of one entity by another or an amalgamation of two or more entities.
``insider'' « initié »	``insider'' means
	(a) a director or officer of a distributing cooperative;
	(b) a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of a distributing cooperative;
	(c) a person who beneficially owns more than ten per cent of the shares of a distributing cooperative or who exercises control or direction over more than ten per cent of the votes attached to shares of a distributing cooperative, excluding shares owned by a securities underwriter under an underwriting agreement while those shares are in the course of a distribution to the public;
	(d) a distributing cooperative that acquires shares, except for the purpose of redemption; and
	(e) a distributing cooperative that acquires or sells shares issued by any of its affiliates.
``officer'' « dirigeant »	``officer'' means
	(a) the chairperson of the board of directors, president, vice-president, secretary, treasurer, comptroller, general counsel, general manager, managing director or any other individual who performs functions for an entity similar to those normally performed by an individual occupying any of those offices; and
	(b) each of the five highest paid employees of a distributing cooperative, including any individual mentioned in paragraph (a).
``share'' « part »	``share'' means an investment share that carries voting rights under the articles or in the circumstances in which voting rights are exercisable with respect to it under this Act, and includes
	(a) a security currently convertible into such an investment share; and
	(b) currently exercisable options and rights to acquire such an investment share or such a convertible security.
Further interpreta- tion	(2) For the purposes of this Part,
	(a) a director or an officer of an entity, or an individual acting in a similar capacity, that is an insider of a distributing cooperative is deemed to be an insider of the distributing cooperative;
	(b) a director or an officer of an entity, or an individual acting in a similar capacity, that is a subsidiary is deemed to be an insider of its holding distributing cooperative;
	(c) a person is deemed to beneficially own shares beneficially owned by an entity controlled by them directly or indirectly;
	(d) an entity is deemed to beneficially own shares beneficially owned by its affiliates; and
	(e) the acquisition or disposition by an insider of an option or right to acquire a share is deemed to be a change in the beneficial ownership of the share to which the option or right to acquire relates.
Membership shares	(3) For the purposes of this Part, the sale of membership shares to members or the making of a member loan to a cooperative is not a distribution to the public.
Deemed insiders	(4) For the purposes of this Part, a director or an officer of an entity, or an individual acting in a similar capacity, or a member or a holder of a share of the entity who is a person referred to in paragraph (b) or (c) of the definition ``insider'' in subsection (1) is deemed to have been an insider of the distributing cooperative for the previous six months or for any shorter period during which the person was a director, an officer, such an individual or such a member or holder of the entity if
	(a) the entity becomes an insider of the distributing cooperative or enters into a business combination with a distributing cooperative; or
	(b) the distributing cooperative becomes an insider of the entity or enters into a business combination with an entity.
Prohibition of short sale	172. (1) No insider shall knowingly sell, directly or indirectly, a share of the distributing cooperative or any of its affiliates if the insider selling the share does not own or has not fully paid for the share to be sold.
Calls and puts	(2) No insider shall knowingly, directly or indirectly, buy a put or sell a call in respect of a share of the cooperative or any of its affiliates.
Exception	(3) Despite subsection (1), an insider may sell a share that the insider does not own if the insider owns another share convertible into the share sold or an option or right to acquire the share sold and, no later than ten days after the sale, the insider
	(a) exercises the conversion privilege, option or right and delivers the share so acquired to the purchaser; or
	(b) transfers the convertible share, option or right to the purchaser.
Definition of ``insider''	173. (1) In this section, ``insider'', with respect to a cooperative, means
	(a) the cooperative;
	(b) an affiliate of the cooperative;
	(c) a director or an officer of the cooperative;
	(d) a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of the cooperative;
	(e) a person who beneficially owns more than ten per cent of the shares of the cooperative or who exercises control or direction over more than ten per cent of the votes attached to the shares of the cooperative;
	(f) a person employed or retained by the cooperative; and
	(g) an individual who receives specific confidential information from a person described in this subsection or in subsection (2), including from an individual described in this paragraph, and who has knowledge that the information is given by such a person.
Deemed insiders	(2) For the purposes of this section, a director or an officer of an entity, or an individual acting in a similar capacity, is deemed to have been an insider of a cooperative for six months, or any shorter period during which the individual was a director or an officer of the entity, or acted in a similar capacity, before
	(a) the entity becomes an insider of a cooperative or enters into a business combination with a cooperative; or
	(b) the cooperative becomes an insider of the entity.
Civil liability	(3) An insider who, in connection with a transaction in a security of the cooperative or any of its affiliates, makes use of any specific confidential information for their own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of the security
	(a) is liable to compensate any person for any direct loss suffered by them as a result of the transaction, unless the information was known or in the exercise of reasonable diligence should have been known to them; and
	(b) is accountable to the cooperative for any direct benefit or advantage received or receivable by the insider as a result of the transaction.
Limitation	(4) An action to enforce a right created by subsection (3) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.
	PART 11
	COMPULSORY ACQUISITION
Definitions	174. The definitions in this section apply in this Part.
``dissenting offeree'' « pollicité dissident »	``dissenting offeree'' means a holder of a share of a class for which a take-over bid is made who does not accept the take-over bid, and includes a subsequent holder of that share who acquires it from the first-mentioned holder.
``offer'' « pollicita- tion »	``offer'' includes an invitation to make an offer.
``offeree'' « pollicité »	``offeree'' means a person to whom a take-over bid is made.
``offeree cooperative'' « coopéra- tive pollicitée »	``offeree cooperative'' means a cooperative whose shares are the object of a take-over bid.
``offeror'' « pollici- tant »	``offeror'' means a person, other than an agent or mandatary, who makes a take-over bid, and includes two or more persons who, directly or indirectly,
	(a) make take-over bids jointly or in concert; or
	(b) intend to exercise jointly or in concert voting rights attached to shares for which a take-over bid is made.
``share'' « part »	``share'' means an investment share, with or without voting rights, and includes
	(a) a security currently convertible into such a share; and
	(b) currently exercisable options and rights to acquire such a share or such a convertible security.
``take-over bid'' « offre d'achat »	``take-over bid'' means an offer made by an offeror to shareholders at approximately the same time to acquire all of the shares of a class of issued shares and includes an offer made by a cooperative to repurchase all of the shares of a class of its shares.
Right to acquire	175. (1) If within one hundred and twenty days after the date of a take-over bid the bid is accepted by the holders of not less than ninety per cent of the shares of any class of shares to which the take-over bid relates, other than shares held at the date of the take-over bid by or on behalf of the offeror or an affiliate or associate of the offeror, the offeror is entitled, on complying with this section, to acquire the shares held by the dissenting offerees.
Notice	(2) An offeror may acquire shares held by a dissenting offeree by sending, by confirmed delivery service within sixty days after the date of termination of the take-over bid and in any event within one hundred and eighty days after the date of the take-over bid, a notice to each dissenting offeree stating that
	(a) the offerees holding not less than ninety per cent of the shares to which the bid relates accepted the take-over bid;
	(b) the offeror is bound to take up and pay for or has taken up and paid for the shares of the offerees who accepted the take-over bid;
	(c) a dissenting offeree is required to elect
	(i) to transfer their shares to the offeror on the terms on which the offeror acquired the shares of the offerees who accepted the take-over bid, or
	(ii) to demand payment of the fair value of their shares in accordance with subsections (10) to (19) by notifying the offeror within twenty days after the offeree receives the notice;

Bill C-91

PART 10

INSIDER TRADING

PART 11

COMPULSORY ACQUISITION