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

DIVISION IXProspectus

Marginal note:Distribution

• 296 (1) No person including a company shall distribute securities of a company except in accordance with the regulations made under subsection (2).

• Marginal note:Regulations

  (2) The Governor in Council may make regulations respecting the distribution of securities of a company, including

  • (a) respecting the information that is to be disclosed by a company before the distribution of any of its securities, including the information that is to be included in a prospectus;

  • (b) respecting the manner of disclosure and the form of the information that is to be disclosed; and

  • (c) exempting any class of distribution of securities from the application of subsection (1).

Marginal note:Order of exemption

• 297 (1) On application by a company or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 296(2) if the Superintendent is satisfied that the company has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.

• Marginal note:Conditions

  (2) An order under subsection (1) may contain any conditions or limitations that the Superintendent deems appropriate.

DIVISION IX.1Going-private Transactions and Squeeze-out Transactions

Marginal note:Going-private transactions

298 A company may carry out a going-private transaction if it complies with any applicable provincial securities laws.

Marginal note:Squeeze-out transactions

299 No company may carry out a squeeze-out transaction unless, in addition to any approval by holders of shares required by or under this Act or the company’s by-laws, the transaction is approved by ordinary resolution of the holders of each class of shares affected by the transaction, voting separately, whether or not the shares otherwise carry the right to vote. However, the following do not have the right to vote on the resolution:

• (a) affiliates of the company; and

• (b) holders of shares that following the squeeze-out transaction would be entitled to consideration of greater value or to superior rights or privileges than those available to other holders of shares of the same class.

Marginal note:Right to dissent

• 300 (1) A holder of shares of a company may dissent if the company resolves to carry out a going-private transaction or squeeze-out transaction that affects those shares.

• Marginal note:Payment for shares

  (2) In addition to any other right that the shareholder may have, but subject to subsection (25), a shareholder who complies with this section is, when the action approved by the resolution from which the shareholder dissents becomes effective, entitled to be paid by the company the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted by the policyholders entitled to vote and the shareholders.

• Marginal note:No partial dissent

  (3) A dissenting shareholder may claim under this section only with respect to all of the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.

• Marginal note:Objection

  (4) A dissenting shareholder shall send to the company, at or before any meeting of shareholders and policyholders at which a resolution referred to in subsection (2) is to be voted on by the policyholders entitled to vote and the shareholders, a written objection to the resolution unless the company did not give notice to the shareholder of the purpose of the meeting and their right to dissent.

• Marginal note:Notice that resolution was adopted

  (5) The company shall within 10 days after the day on which the policyholders entitled to vote and the shareholders adopt the resolution send to each shareholder who sent an objection under subsection (4) notice that the resolution was adopted. If it is necessary for the Minister or Superintendent to approve the transaction within the meaning of subsection 1016(1) before it becomes effective, the company shall send notice within 10 days after the approval. Notice is not required to be sent to a shareholder who voted for the resolution or one who has withdrawn their objection.

• Marginal note:Demand for payment

  (6) A dissenting shareholder shall within 20 days after receiving the notice referred to in subsection (5) — or, if they do not receive it, within 20 days after learning that the resolution was adopted by the policyholders entitled to vote and the shareholders — send to the company a written notice containing

  • (a) their name and address;

  • (b) the number and class of shares in respect of which they dissent; and

  • (c) a demand for payment of the fair value of those shares.

• Marginal note:Share certificates

  (7) A dissenting shareholder shall within 30 days after sending a notice under subsection (6) send the certificates representing the shares in respect of which they dissent to the company or its transfer agent.

• Marginal note:Forfeiture

  (8) A dissenting shareholder who fails to comply with subsection (7) has no right to make a claim under this section.

• Marginal note:Endorsing certificate

  (9) A company or its transfer agent shall endorse on any share certificate received in accordance with subsection (7) a notice that the holder is a dissenting shareholder under this section and shall without delay return the share certificates to the dissenting shareholder.

• Marginal note:Suspension of rights

  (10) On sending a notice under subsection (6), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section. However, the shareholder’s rights are reinstated as of the date the notice was sent if

  • (a) the shareholder withdraws the notice before the company makes an offer under subsection (11);

  • (b) the company fails to make an offer in accordance with subsection (11) and the shareholder withdraws the notice; or

  • (c) the directors revoke under section 242 the special resolution that was made in respect of the going-private transaction or squeeze-out transaction.

• Marginal note:Offer to pay

  (11) A company shall, no later than seven days after the later of the day on which the action approved by the resolution from which the shareholder dissents becomes effective and the day on which the company received the notice referred to in subsection (6), send to each dissenting shareholder who sent a notice

  • (a) a written offer to pay for their shares in an amount considered by the directors of the company to be the fair value, accompanied by a statement showing how the fair value was determined; or

  • (b) if subsection (25) applies, a notice that it is unable to lawfully pay dissenting shareholders for their shares.

• Marginal note:Same terms

  (12) Every offer made under subsection (11) for shares of the same class or series is to be on the same terms.

• Marginal note:Payment

  (13) Subject to subsection (25), a company shall pay for the shares of a dissenting shareholder within 10 days after the day on which an offer made under subsection (11) is accepted, but the offer lapses if the company does not receive an acceptance within 30 days after the day on which the offer is made.

• Marginal note:Court may fix fair value

  (14) If a company fails to make an offer under subsection (11) or if a dissenting shareholder fails to accept an offer, the company may, within 50 days after the day on which the action approved by the resolution from which the shareholder dissents becomes effective or within any further period that a court may allow, apply to the court to fix a fair value for the shares of any dissenting shareholder.

• Marginal note:Shareholder application

  (15) If a company fails to apply to a court under subsection (14), a dissenting shareholder may apply to a court for the same purpose within a further period of 20 days or within any further period that the court may allow.

• Marginal note:Venue

  (16) An application under subsection (14) or (15) is to be made to a court having jurisdiction where the company’s head office is situated or, if the company carries on business in the province in which the dissenting shareholder resides, in that province.

• Marginal note:No security for costs

  (17) A dissenting shareholder is not required to give security for costs in an application made under subsection (14) or (15).

• Marginal note:Parties

  (18) On an application to a court under subsection (14) or (15),

  • (a) all dissenting shareholders whose shares have not been purchased by the company are to be joined as parties and are bound by the decision of the court;

  • (b) the company shall notify each of them of the date, place and consequences of the application and their right to appear and be heard in person or by counsel; and

  • (c) the company shall notify the Superintendent of the date and place of the application and the Superintend­ent may appear and be heard in person or by counsel.

• Marginal note:Powers of court

  (19) On an application to a court under subsection (14) or (15), the court may determine whether any other person is a dissenting shareholder and is to be joined as a party and the court shall then fix a fair value for the shares of all dissenting shareholders.

• Marginal note:Appraisers

  (20) The court may appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.

• Marginal note:Final order

  (21) The final order of the court is to be rendered against the company in favour of each dissenting shareholder for the value of the shares as fixed by the court.

• Marginal note:Interest

  (22) The court may allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution from which the shareholder dissents becomes effective until the date of payment.

• Marginal note:Notice that s. (25) applies

  (23) If subsection (25) applies, the company shall within 10 days after an order is made under subsection (21) notify each dissenting shareholder that it is unable to lawfully pay dissenting shareholders for their shares.

• Marginal note:Effect of s. (25)

  (24) If subsection (25) applies, a dissenting shareholder may by written notice delivered to the company within 30 days after receiving notice under subsection (23)

  • (a) withdraw their notice of dissent, in which case the company is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or

  • (b) retain their status as a claimant against the company, to be paid as soon as the company is able to lawfully pay them or, in a liquidation, to be ranked subordinate to the rights of the company’s creditors but in priority to its shareholders.

• Marginal note:Limitation

  (25) A company may not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that the company is or the payment would cause the company to be in contravention of a regulation referred to in subsection 515(1) or (2) or 516(1) or (2) or of an order made under subsection 515(3) or 516(4).

301 [Repealed, 2005, c. 54, s. 272]

302 [Repealed, 2005, c. 54, s. 272]

303 [Repealed, 2005, c. 54, s. 272]

304 [Repealed, 2005, c. 54, s. 272]

305 [Repealed, 2005, c. 54, s. 272]

306 [Repealed, 2005, c. 54, s. 272]

DIVISION XCompulsory Acquisitions

Marginal note:Definitions

• 307 (1) In this Division,

  affiliate

  affiliate means a body corporate that is affiliated with another body corporate within the meaning of subsection 6(2); (groupe)

  associate of the offeror

  associate of the offeror means

  • (a) a body corporate that an offeror, directly or indirectly, controls, determined without regard to paragraph 3(1)(d), or of which an offeror beneficially owns shares or securities currently convertible into shares carrying more than 10 per cent of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing, or a currently exercisable option or right to purchase the shares or the convertible securities,

  • (b) a partner of the offeror acting on behalf of the partnership of which they are partners,

  • (c) a trust or estate in which the offeror has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity,

  • (d) a spouse or common-law partner of the offeror,

  • (e) a child of the offeror or of the offeror’s spouse or common-law partner, or

  • (f) a relative of the offeror or of the offeror’s spouse or common-law partner, if that relative has the same residence as the offeror; (associé du pollicitant)

  dissenting offeree

  dissenting offeree means a holder of a share who does not accept a take-over bid or a subsequent holder of the share who acquires it from the first-mentioned holder; (pollicité opposant)

  exempt offer

  exempt offer[Repealed, 2005, c. 54, s. 273]

  offeree

  offeree means a person to whom a take-over bid is made; (pollicité)

  offeree company

  offeree company means a company the shares of which are the object of a take-over bid; (société pollicitée)

  offeror

  offeror means a person, other than an agent, 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; (pollicitant)

  share

  share means a share with or without voting rights and includes

  • (a) a security that is currently convertible into a share, and

  • (b) a currently exercisable option or right to acquire a share or a security referred to in paragraph (a); (action)

  take-over bid

  take-over bid means an offer made by an offeror at approximately the same time to all of the shareholders of a distributing company to acquire all of the shares of a class of issued shares, and includes an offer by a distributing company to repurchase all of the shares of a class. (offre d’achat visant à la mainmise)

• Marginal note:Control

  (2) For the purposes of this Division, a person controls a body corporate when the person controls the body corporate within the meaning of section 3, determined without regard to paragraph 3(1)(d).

• Marginal note:Date of bid

  (3) A take-over bid is deemed to be dated as of the date on which it is sent.