Insurance Companies Act (S.C. 1991, c. 47)

Marginal note:Right to acquire shares

308 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 90 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 Division, to acquire the shares held by the dissenting offerees.

Marginal note:Offeror’s notice to dissenters

• 309 (1) An offeror may acquire shares held by a dissenting offeree by sending by registered mail 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, an offeror’s notice to each dissenting offeree and to the Superintendent stating that

  • (a) offerees holding not less than 90 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, have 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 the dissenting offeree’s shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid, or

    • (ii) to demand payment of the fair value of the dissenting offeree’s shares in accordance with sections 313 to 316 by notifying the offeror within twenty days after receipt of the offeror’s notice;

  • (d) a dissenting offeree who does not notify the offeror in accordance with paragraph 310(b) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid; and

  • (e) a dissenting offeree must send the dissenting offeree’s shares to which the take-over bid relates to the offeree company within twenty days after the dissenting offeree receives the offeror’s notice.

• Marginal note:Notice of adverse claim

  (2) Concurrently with sending the offeror’s notice under subsection (1), the offeror shall send to the offeree company a notice of adverse claim in accordance with subsection 133(1) with respect to each share held by a dissenting offeree.

Marginal note:Share certificates and election

310 A dissenting offeree to whom a notice is sent under subsection 309(1) shall within 20 days after receiving the notice

• (a) send to the offeree company the share certificates representing the shares to which the take-over bid relates; and

• (b) elect to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid or to demand payment of the fair value of the shares in accordance with sections 313 to 316 by notifying the offeror.

Marginal note:Deemed election

310.1 A dissenting offeree who does not notify the offeror in accordance with paragraph 310(b) is deemed to have elected to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid.

Marginal note:Payment to offeree company

• 311 (1) Within 20 days after the offeror sends a notice under subsection 309(1), the offeror shall pay the money, or transfer the other consideration, to the offeree company that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 310(b).

• Marginal note:Consideration in trust

  (2) An offeree company is deemed to hold in a fiduciary capacity for the dissenting offerees the money or other consideration it receives under subsection (1).

• Marginal note:Deposit or custody

  (3) An offeree company shall deposit the money received under subsection (1) in a separate account in a deposit-taking financial institution in Canada and the offeree company shall place any other consideration in the custody of a deposit-taking financial institution in Canada.

Marginal note:Fiduciary capacity of company

311.1 A company that is making a take-over bid to repurchase all of the shares of a class is deemed to hold in a fiduciary capacity for the dissenting shareholders the money that it would have had to pay, and the other consideration that it would have had to transfer, to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 310(b). The company shall within 20 days after a notice is sent under subsection 309(1) deposit the money in a separate account in a deposit-taking financial institution in Canada and place any other consideration in the custody of a deposit-taking financial institution in Canada.

Marginal note:Duty of offeree company

312 Within thirty days after an offeror sends an offeror’s notice under subsection 309(1), the offeree company shall

• (a) if the payment or transfer required by subsection 311(1) is made, issue to the offeror a share certificate in respect of the shares that were held by the dissenting offerees;

• (b) give to each dissenting offeree who elects to transfer shares under paragraph 310(b) and who sends the share certificates as required under paragraph 310(a) the money or other consideration to which they are entitled, disregarding fractional shares, which may be paid for in money; and

• (c) if the payment or transfer required by subsection 311(1) is made and the money or other consideration is deposited as required by subsections 311(2) and (3) or by section 311.1, send to each dissenting offeree who has not sent share certificates as required under paragraph 310(a) a notice stating that

  • (i) their shares have been cancelled,

  • (ii) the offeree company or its designated person holds in a fiduciary capacity for that offeree the money or other consideration to which they are entitled as payment for or in exchange for the shares, and

  • (iii) the offeree company will, subject to sections 313 to 316, send that money or other consideration to that offeree without delay after receiving the share certificates.

Marginal note:Court may fix fair value

• 313 (1) If a dissenting offeree has elected to demand payment of the fair value of their shares under paragraph 310(b), the offeror may, within 20 days after it has paid the money or transferred the other consideration under subsection 311(1), apply to a court to fix the fair value of the shares of that dissenting offeree.

• Marginal note:Idem

  (2) If an offeror fails to apply to a court under subsection (1), a dissenting offeree may apply to a court for the same purpose within a further period of twenty days.

• Marginal note:Venue

  (3) An application under subsection (1) or (2) shall be made to a court having jurisdiction in the place at which the head office of the company is situated or in the province in which the dissenting offeree resides if the company carries on business in that province.

• Marginal note:No security for costs

  (4) A dissenting offeree is not required to give security for costs in an application made under subsection (1) or (2).

Marginal note:Parties and notice

314 On an application under subsection 313(1) or (2),

• (a) all dissenting offerees who have made elections to demand payment under paragraph 310(b) and whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and

• (b) the offeror shall notify each affected dissenting offeree of the date, place and consequences of the application and of the dissenting offeree’s right to appear and be heard in person or by counsel at the hearing of the application.

Marginal note:Powers of court

• 315 (1) On an application to a court under subsection 313(1) or (2), the court may determine whether any other person is a dissenting offeree who should be joined as a party, and the court shall then fix a fair value for the shares of all dissenting offerees.

• Marginal note:Appraisers

  (2) A court may in its discretion appoint one or more appraisers to assist the court in fixing a fair value for the shares of a dissenting offeree.

• Marginal note:Final order

  (3) The final order of a court shall be made against the offeror in favour of each dissenting offeree and for the amount for each dissenting offeree’s shares as fixed by the court.

• Marginal note:Additional powers of court

  (4) In connection with proceedings under subsection 313(1) or (2), a court may make any order it thinks fit and, without limiting the generality of the foregoing, may

  • (a) fix the amount of money or other consideration that is deemed to be held in a fiduciary capacity under subsection 311(2) or section 311.1;

  • (b) order that the money or other consideration is to be held in trust by a person other than the offeree company;

  • (c) allow a reasonable rate of interest on the amount payable to each dissenting offeree from the date the dissenting offeree sends the share certificates required under section 310 until the date of payment; or

  • (d) order that any money payable to a shareholder who cannot be found be paid to the Receiver General.

• Marginal note:Recovery

  (5) If at any time a person establishes an entitlement to any moneys paid to the Receiver General under this section, the Receiver General shall pay an equivalent amount to that person out of the Consolidated Revenue Fund.

Marginal note:Status of dissenter

316 Where no application is made to a court under subsection 313(2) within the period set out in that subsection, a dissenting offeree is deemed to have elected to transfer the dissenting offeree’s shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid.

Marginal note:Obligation to acquire shares

• 316.1 (1) If a shareholder who holds shares of an offeree company does not receive the notice referred to in subsection 309(1), the shareholder may require the offeror to acquire the shares

  • (a) within 90 days after the date of termination of the take-over bid; or

  • (b) if the shareholder did not receive an offer under the take-over bid, within 90 days after the later of

    • (i) the date of termination of the take-over bid, and

    • (ii) the day on which the shareholder learned of the take-over bid.

• Marginal note:Acquisition on same terms

  (2) If the shareholder requires the offeror to acquire shares, the offeror shall acquire them on the same terms as those on which the offeror acquires shares from offerees who accept the take-over bid.

DIVISION XITrust Indentures

Marginal note:Definitions

317 In this Division,

event of default

event of default means, in relation to a trust indenture, an event specified in the trust indenture on the occurrence of which the principal, interest and other moneys payable thereunder become or may be declared to be payable before maturity, but the event is not an event of default until all the conditions set out in the trust indenture in connection with the giving of notice of the event have been satisfied or the period of time for giving the notice has elapsed; (cas de défaut)

issuer

issuer means a company that has issued, is about to issue or is in the process of issuing subordinated indebtedness; (émetteur)

trustee

trustee means any person appointed as trustee under the terms of a trust indenture to which a company is a party, and includes any successor trustee; (fiduciaire)

trust indenture

trust indenture means any deed, indenture or other instrument, including any supplement or amendment thereto, made by a company under which the company issues subordinated indebtedness and in which a person is appointed as trustee for the holders of the subordinated indebtedness issued thereunder. (acte de fiducie)

Marginal note:Application

318 This Division applies in respect of a trust indenture if the subordinated indebtedness issued or to be issued under the trust indenture is part of a distribution to the public.

Marginal note:Exemption

319 The Superintendent may, in writing, exempt a trust indenture from the application of this Division if, in the Superintendent’s opinion, the trust indenture and the subordinated indebtedness are subject to a law of a province or other jurisdiction, other than Canada, that is substantially equivalent to the provisions of this Act relating to trust indentures.

Marginal note:Conflict of interest

• 320 (1) No person shall be appointed as trustee if at the time of the appointment there is a material conflict of interest between the person’s role as trustee and any other role of the person.

• Marginal note:Eliminating conflict of interest

  (2) A trustee shall, within ninety days after the trustee becomes aware that a material conflict of interest exists,

  • (a) eliminate the conflict of interest; or

  • (b) resign from office.

Marginal note:Validity despite conflict

321 A trust indenture and any subordinated indebtedness issued thereunder are valid notwithstanding a material conflict of interest of the trustee.

Marginal note:Removal of trustee

322 If a trustee is appointed in contravention of subsection 320(1) or if a trustee contravenes subsection 320(2), any interested person may apply to a court for an order that the trustee be replaced, and the court may make an order on such terms as it thinks fit.

Marginal note:Trustee qualifications

323 A trustee, or at least one of the trustees if more than one is appointed, must be

• (a) a trust company pursuant to subsection 57(2) of the Trust and Loan Companies Act; or

• (b) a body corporate that is incorporated by or under an Act of the legislature of a province and authorized to carry on business as a trustee.

Marginal note:List of security holders

• 324 (1) A holder of subordinated indebtedness issued under a trust indenture may, on payment to the trustee of a reasonable fee and on delivery of a statutory declaration to the trustee, require the trustee to provide, within fifteen days after the delivery to the trustee of the statutory declaration, a list setting out

  • (a) the names and addresses of the registered holders of the outstanding subordinated indebtedness,

  • (b) the principal amount of outstanding subordinated indebtedness owned by each such holder, and

  • (c) the aggregate principal amount of subordinated indebtedness outstanding

  as shown on the records maintained by the trustee on the day the statutory declaration is delivered to that trustee.

• Marginal note:Duty of issuer

  (2) On the demand of a trustee, the issuer of subordinated indebtedness shall provide the trustee with the information required to enable the trustee to comply with subsection (1).

• Marginal note:Where applicant is entity

  (3) Where the person requiring the trustee to provide a list under subsection (1) is an entity, the statutory declaration required under that subsection shall be made by a director or an officer of the entity or a person acting in a similar capacity.

• Marginal note:Contents of statutory declaration

  (4) The statutory declaration required under subsection (1) must state

  • (a) the name and address of the person requiring the trustee to provide the list and, if the person is an entity, the address for service thereof; and

  • (b) that the list will not be used except as permitted by subsection (5).

• Marginal note:Use of list

  (5) No person shall use a list obtained under this section except in connection with

  • (a) an effort to influence the voting of the holders of subordinated indebtedness;

  • (b) an offer to acquire subordinated indebtedness; or

  • (c) any other matter relating to the subordinated indebtedness or the affairs of the issuer or guarantor thereof.