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Bill C-5

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	(a) a director who is resident in Canada and who is not present approves, in writing or by telephonic, electronic or other communica tion facilities, the business transacted at the meeting; and
	(b) the required majority would have been present had that director been present at the meeting.
Electronic meeting	98. (1) Subject to the by-laws, a director may attend a meeting of directors by means of a telephonic, electronic or other communica tion facility if it permits all persons participat ing in the meeting to communicate adequately with each other during the meeting.
Presence	(2) A director participating in a meeting by a means referred to in subsection (1) is deemed to be present at the meeting.
Validity of acts	99. No act of a director or officer is invalid by reason only of an irregularity in the person's election or appointment or because the director or officer is not qualified to be one.
Resolution in lieu of meeting	100. (1) A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or of a committee of directors, is as valid as if it had been passed at a meeting of directors or of a committee of directors.
Copy of resolutions	(2) A copy of every resolution referred to in subsection (1) must be kept with the minutes of the meetings of the directors or committee of directors.
Proof	(3) An entry in the minutes of a cooperative of a vote taken, including one taken in a meeting held in accordance with section 98, or a resolution made under subsection (1) is, in the absence of evidence to the contrary, proof of the outcome of the vote or resolution.
	Liability
Directors' liability	101. (1) Directors who vote for or consent to a resolution authorizing the issue of a membership share or an investment share in exchange for a thing or service other than money are jointly and severally, or solidarily, liable to the cooperative to make good any amount by which the thing or service received is less than the fair equivalent of the money that the cooperative would have received if the membership share or investment share had been issued for money on the date of the resolution.
Exemption	(2) A director is not liable under subsection (1) if the director proves that he or she did not know and could not reasonably have known that the membership share or investment share was issued for a thing or service less than the fair equivalent of the money that the coopera tive would have received if the membership share or investment share had been issued for money on the date of the resolution.
Further liability	(3) Directors who vote for or consent to resolutions authorizing any of the following matters are jointly and severally, or solidarily, liable to restore to the cooperative any amounts so distributed or paid and not other wise recovered by the cooperative:
	(a) a redemption or other acquisition of shares or the repayment of member loans contrary to this Act;
	(b) a commission contrary to this Act;
	(c) a payment of a dividend, a patronage return or interest contrary to this Act;
	(d) financial assistance contrary to this Act;
	(e) a payment of an indemnity contrary to this Act; or
	(f) any other payment contrary to this Act.
Contribution	(4) A director who satisfies a judgment for a debt owed under this section is entitled to contribution from the other directors who were liable for the debt.
Recovery	(5) A director who is liable under subsec tion (3) may apply to a court for an order to recover any money or property referred to in paragraphs (3)(a) to (f).
Order of court	(6) A court may, on application under subsection (5), if it is satisfied that it is equitable to do so,
	(a) order any person to pay or deliver to the director any money or property referred to in paragraphs (3)(a) to (f) that was paid or distributed to that person;
	(b) order a cooperative to return or issue membership shares or investment shares to a person from whom the cooperative re deemed or otherwise acquired membership shares or investment shares;
	(c) order any person to repay to the cooperative the amount of a member loan that was repaid; or
	(d) make any further order that it sees fit.
Limitation period	(7) An action to enforce a liability imposed by this section may not be commenced more than two years after the date of the resolution authorizing the action complained of.
Liability for wages	102. (1) Subject to this section and any other applicable law, each director is jointly and severally, or solidarily, liable to the employees of the cooperative for all debts payable to them for services performed while the director held office.
Exceptions	(2) A director is not liable under this section for any amount in respect of statutory or contractual termination of employment, for severance pay or for any punitive damages related to termination of employment.
Amount of liability	(3) The amount of the liability under this section may not exceed six months wages in the case of each employee.
Conditions precedent	(4) A director is not liable under this section unless
	(a) the cooperative was sued for the debt within six months after it became due and execution was returned unsatisfied in whole or in part;
	(b) the cooperative has commenced liquida tion or dissolution proceedings or was dissolved and a claim for the debt was proved no later than six months after the earlier of the date of commencement of the proceedings and the date of the dissolution; or
	(c) the cooperative made an assignment or was made subject to a receiving order under the Bankruptcy and Insolvency Act and a claim for the debt was proved no later than six months after the date of the assignment or receiving order.
Limitation period	(5) A director is not liable under this section unless he or she is sued while holding office or no later than two years after ceasing to be a director.
Amount due after execution	(6) If execution referred to in paragraph (4)(a) has issued, the amount recoverable from the director is the amount remaining unsatisfied after execution.
Subrogation	(7) If a director pays a debt owed under this section and the debt is proven in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference that the employee would have been entitled to and, if judgment is obtained, is entitled to an assignment of the judgment.
Contribution	(8) A director who pays a debt owed under this section is entitled to contribution from the other directors who were liable for the debt.
	Conflict of Interests
Disclosure of interest	103. (1) A director or officer must, in accordance with this section, disclose to the cooperative the nature and extent of any interest that the director or officer has in a material contract or transaction, or a proposed material contract or transaction, with the cooperative, and any material change to any such interest, if the director or officer
	(a) is a party to the contract or transaction;
	(b) is a director or officer - or an individu al acting in a similar capacity - of a party to the contract or transaction; or
	(c) has a material interest in a party to the contract or transaction.
Exemption	(2) This section does not require the disclo sure of an interest in a contract or transaction that is available to and customarily entered into between the cooperative and its members, if the contract or transaction is on the same terms as are generally available to members.
Manner of disclosure	(3) The director or officer must make the disclosure in writing to the cooperative or request to have it entered in the minutes of the meetings of directors.
Time of disclosure for a director	(4) A director must make the disclosure
	(a) at the meeting of directors at which the proposed contract or transaction is first considered;
	(b) if the director was not interested in the proposed contract or transaction at the time of the meeting referred to in paragraph (a), at the first meeting after the director acquires an interest in it;
	(c) if there is a material change in the director's interest in the contract, transac tion, proposed contract or proposed transac tion, at the first meeting after the change;
	(d) if the director becomes interested in a contract or transaction after it is made, at the first meeting after the director acquires an interest in it;
	(e) if the director had an interest in the contract or transaction before becoming a director, at the first meeting after becoming a director; or
	(f) if the contract or transaction is one that would, in the ordinary course of business, not require the approval of the directors, as soon as the director becomes aware of the contract or transaction.
Time of disclosure for an officer	(5) An officer who is not a director must make the disclosure
	(a) immediately after becoming aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors;
	(b) if the officer acquires an interest in a contract or transaction after it is made, immediately after the officer acquires an interest in it;
	(c) if there is a material change in the officer's interest in the contract, transac tion, proposed contract or proposed transac tion, immediately after the change;
	(d) if the officer had an interest in the contract or transaction before becoming an officer, immediately after becoming an officer; or
	(e) if the contract or transaction is one that would, in the ordinary course of business, not require the approval of the directors, as soon as the officer becomes aware of the contract or transaction.
Access	(6) The members and shareholders may examine the portions of minutes of meetings of directors, of other documents that contain disclosures under this section and of the general notice referred to in section 105 during the usual business hours of the cooper ative.
Exception	(7) The members and shareholders may, by unanimous agreement, modify the procedural requirements of this section and sections 104 to 107.
Voting	104. (1) A director who is interested in a contract or transaction referred to in subsec tion 103(1) may not be present for the vote or vote on any resolution to approve the contract or transaction.
Exception	(2) Subsection (1) does not apply to
	(a) a contract or transaction that relates primarily to the director's remuneration as a director, officer, employee or agent or mandatary of the cooperative or of one of its subsidiaries; or
	(b) a contract for indemnity or insurance under section 113.
Continuing disclosure	105. For the purposes of section 103, a general notice to the directors declaring that the director or officer is a director or officer of an entity or acting in a similar capacity, or has a material interest in an entity, or that there has been a change in the nature of their interest in the entity, and that the director or officer is therefore to be regarded as interested in a contract or transaction made with that entity, as declared in the notice, is a sufficient declaration of interest in a contract or transac tion so made.
Effect of disclosure	106. A contract or transaction for which disclosure must be made under section 103 is not invalid, and the director or officer is not accountable to the cooperative, its members or its shareholders for any profit realized from the contract or transaction, by reason only of the interest of the director or officer in the contract or transaction, if
	(a) disclosure of the interest was made in accordance with this Act; or
	(b) disclosure of the interest was not made in accordance with this Act but
	(i) disclosure of the interest was made,
	(ii) the contract or transaction is ap proved by a majority of the members of the cooperative or a majority of the members present at a meeting of the members, and
	(iii) the contract or transaction was reasonable and fair to the cooperative at the time it was approved.
Court order	107. If a director or officer of a cooperative fails to disclose an interest in a material contract or transaction in accordance with section 103, or otherwise fails to comply with sections 103 to 106, a court may, on the application of the cooperative or a member or shareholder, set aside the contract or transac tion on any terms that it thinks fit or order that the director or officer account to the coopera tive, its members or its shareholders for any profit realized from the contract or transac tion.
	Officers
Officers	108. Subject to the articles, the by-laws and any unanimous agreement, the directors may
	(a) designate the offices of the cooperative;
	(b) specify the powers and duties of each office;
	(c) appoint any individual of full capacity, including a director, to be an officer;
	(d) appoint one individual to hold more than one office; and
	(e) delegate to the officers the power to manage the business and affairs of the cooperative, except a power referred to in subsection 109(3).
Appointment of managing director or committee	109. (1) The directors may appoint from among themselves a managing director or any committee they consider necessary.
Residency	(2) The managing director must be resident in Canada.
Delegation	(3) The directors may delegate to a manag ing director or a committee composed of at least three directors any powers of the direc tors, except the power to
	(a) fill a vacancy among the directors or in the office of the auditor, or appoint addi tional directors;
	(b) declare dividends on shares, interest on member loans or patronage returns;
	(c) approve a financial statement of the cooperative;
	(d) submit to the persons who are entitled to vote on them questions or matters required to be approved at a meeting of the coopera tive;
	(e) make decisions that by this Act, the articles or a unanimous agreement are required to be made by a vote of greater than a majority of the directors;
	(f) redeem or otherwise acquire shares issued by the cooperative;
	(g) pay a commission referred to in section 128;
	(h) approve a management proxy circular referred to in Part 9; or
	(i) issue securities, except in the manner and on the terms authorized by the directors.
Powers	(4) A committee referred to in subsection (1) may exercise the powers that have been delegated to it subject to any restrictions imposed by the directors.
Membership on committee	(5) A director who is appointed to a committee may remain on the committee until the appointment is revoked or the person ceases to be a director.
Duties	(6) A committee appointed under this section must

Bill C-5

Liability

Conflict of Interests

Officers