Canada Business Corporations Regulations, 2001
57 A management proxy circular shall contain the following information:
(a) a statement of the right of the shareholder to revoke a proxy under subsection 148(4) of the Act and of the method by which the shareholder may exercise that right;
(b) a statement that the solicitation is made by or on behalf of the management of the corporation;
(c) the name of any director of the corporation who has informed the management, in writing, that he or she intends to oppose any action intended to be taken by the management and the nature of the action that the director intends to oppose;
(d) the method of solicitation, if otherwise than by mail, and if the solicitation is to be made by specially engaged employees or agents, the material features of any contract or understanding for the solicitation, the parties to the contract or understanding and the cost or anticipated cost of the solicitation;
(e) the name of the person by whom the cost of the solicitation has been or will be borne, directly or indirectly;
(f) the number of shares of each class entitled to be voted at the meeting and the number of votes to which each share is entitled;
(g) the record date as of which the shareholders entitled to vote at the meeting will be determined or particulars as to the closing of the security transfer register, as the case may be, and, if the right to vote is not limited to shareholders of record as at a specified record date, any conditions in respect of that right to vote;
(h) if indemnification under section 124 of the Act is paid or becomes payable in the financial period,
(i) the amount paid or payable,
(ii) the name and title of the individual indemnified or to be indemnified, and
(iii) the circumstances that gave rise to the indemnity;
(i) if insurance referred to in subsection 124(6) of the Act is purchased,
(i) the amount or, if there is a comprehensive liability policy, the approximate amount of premiums paid by the corporation in respect of directors as a group and officers as a group or for both groups on an aggregate basis,
(ii) the aggregate amount of premiums, if any, paid by the individuals in each group,
(iii) the total amount of insurance purchased in respect of each group or for both groups on an aggregate basis, and
(iv) a summary of any deductibility or co-insurance clause or other provision in the insurance contract that exposes the corporation to liability in addition to the payment of the premiums;
(j) the name of each person who, to the knowledge of the directors or officers of the corporation, beneficially owns, directly or indirectly, or exercises control or direction over, shares carrying more than 10% of the votes attached to any class of shares entitled to vote in connection with any matters being proposed for consideration at the meeting, the approximate number of the shares so owned, controlled or directed by each person and the percentage of the class of voting shares represented by the number of shares so owned, controlled or directed;
(k) the percentage of votes required for the approval of any matter that is to be submitted to a vote of shareholders at the meeting, other than the election of directors;
(l) if action is to be taken with respect to the appointment of an auditor, the name of the proposed auditor, the name of each auditor appointed within the preceding five years and the date on which each auditor was first appointed;
(m) if directors are to be elected, a statement of the right of any class of shareholders to elect a specified number of directors or to cumulate their votes and of any conditions precedent to the exercise of the right;
(n) in tabular form, if directors are to be elected, so far as practicable with respect to each person proposed to be nominated by management for election as a director and each director whose term of office will continue after the meeting,
(i) the name of each person, the time when their term of office or the term of office for which they are a proposed nominee will expire and the last major position or office with the corporation or the corporation’s holding body corporate held by them, indicating whether the person is a proposed nominee for election as a director at the meeting,
(ii) the present principal occupation or employment of each person, giving the name and principal business of any body corporate or other organization in which the occupation or employment is carried on, and the same information in respect of all principal occupations or employments held by them within the five preceding years, unless the person is now a director and was elected to the present term of office by a vote of shareholders at a meeting the notice of which was accompanied by a proxy circular containing that information,
(iii) if the person is or has been a director of the corporation, the period or periods during which they have so served,
(iv) the number of shares of each class of voting shares of the corporation and the corporation’s holding body corporate and any of the corporation’s subsidiaries beneficially owned, directly or indirectly, or over which control or direction is exercised, by each person, and
(v) if the voting shares are equal to more than 10% of the votes attached to all voting shares of the corporation, the corporation’s holding body corporate or any of the corporation’s subsidiaries, the approximate number of each class of shares, and the name of each associate;
(o) whether the corporation has an executive committee of its board of directors or is required to have an audit committee and, if so, the names of the directors who are members of each committee;
(p) the details of any contract or understanding between any proposed management nominee and any other person, except the directors and officers of the corporation acting solely in their capacity as such, under which the nominee is to be elected, including the name of the other person;
(q) the Statement of Executive Remuneration in the form fixed by the Director or, if the corporation is required by the laws of a jurisdiction set out in column 1 of an item of Schedule 3 to file the form or information with respect to executive remuneration that is set out in column 2 of that item, that form or information, when action is to be taken with respect to
(i) the election of directors,
(ii) any bonus, profit-sharing or other plan of remuneration, contract or understanding in which a director or an officer of the corporation will participate,
(iii) any pension or retirement plan of the corporation in which a director or an officer of the corporation will participate, or
(iv) the granting to a director or an officer of the corporation of any option or right to purchase securities, other than rights issued rateably to all shareholders or to all shareholders resident in Canada;
(r) if action is to be taken with respect to any of the matters referred to in subparagraphs (q)(i) to (iv),
(i) a statement setting out the largest aggregate amount of debt, except for indebtedness that has been entirely repaid on or before the date of the management proxy circular and routine indebtedness, that has been outstanding since the beginning of the corporation’s last completed financial year, the nature of the indebtedness, the amount of debt that is currently outstanding, details of the transaction in which it was incurred, and the rate of interest paid or charged on it, in respect of the following persons who are or have been indebted to the corporation or any of its subsidiaries since the beginning of the last completed financial year in an aggregate amount that exceeds $25,000, namely,
(A) a director or an officer of the corporation,
(B) a person proposed by management as a nominee for election as a director of the corporation, and
(C) an associate of any person referred to in clause (A) or (B),
and for the purpose of this subparagraph, routine indebtedness means indebtedness described in any of the following, namely,
(D) if a corporation makes loans to employees of the corporation generally, whether or not in the ordinary course of business, the loans are considered routine indebtedness if made on terms, including those as to interest rate and security, no more favourable to the borrower than the terms on which loans are made by the corporation to employees generally, but the amount of any remaining unpaid loans to any one director, officer or person proposed as a nominee, and their associates, that is considered as routine indebtedness under this clause during the last completed financial year must not exceed $25,000,
(E) whether or not the corporation makes loans in the ordinary course of business, a loan made by it to one of its directors or officers is considered routine indebtedness if
(I) the borrower is a full-time employee of the corporation,
(II) the loan is fully secured against the borrower’s residence, and
(III) the amount of the loan does not exceed the borrower’s annual salary,
(F) if the corporation makes loans in the ordinary course of business, a loan is considered routine indebtedness if it is made to a person other than a full-time employee of the corporation or to any other body corporate and
(I) is made on substantially the same terms, including those as to interest rate and security, as loans made to other customers of the corporation with comparable credit ratings, and
(II) involves no more than usual risks of collectibility, or
(G) indebtedness arising from purchases made on usual trade terms or from ordinary travel or expense advances, or for similar reasons, is considered routine indebtedness if the repayment provisions are in accordance with usual commercial practice, or
(ii) if the corporation is required by the laws of a jurisdiction set out in column 1 of an item of Schedule 4 to file the form or information with respect to indebtedness of directors and officers that is set out in column 2 of that item, that form or information;
(s) subject to section 58, in any transaction since the beginning of the corporation’s last completed financial year or in any proposed transaction that has materially affected or could materially affect the corporation or any of its subsidiaries,
(i) if not previously disclosed, the details, including, when practicable, the approximate amount of any material interest, direct or indirect, of
(A) a director or an officer of the corporation,
(B) a director or an officer of a body corporate that is itself an insider or a subsidiary of the corporation,
(C) a person proposed by management as a nominee for election as a director of the corporation,
(D) a shareholder required to be named under paragraph (j), and
(E) an associate or affiliate of any of the persons referred to in clauses (A) to (D),
(ii) the amounts and other details of transactions that are not required under subparagraph (i) and that involve remuneration paid, directly or indirectly, to any of the persons referred to in clauses (i)(A) to (E) for services in any capacity, unless the interest of the person arises solely from the beneficial ownership, direct or indirect, of less than 10% of any class of voting shares of another body corporate, or one of its subsidiaries, that provides services to the corporation, and
(iii) an interest arising from the ownership of securities of the corporation, if the security holder receives an advantage not shared rateably by all holders of the same class of security or all holders of the same class of security who are resident in Canada;
(t) details of each transaction referred to in paragraph (s), the name and address of each person whose interest in the transaction is disclosed and the nature of the relationship by reason of which the interest is required to be disclosed;
(u) when a transaction referred to in paragraph (s) involves the purchase or sale of assets by the corporation or any of its subsidiaries or holding bodies corporate otherwise than in the ordinary course of business, the cost of the assets to the purchaser and the cost of the assets to the seller, if the assets were acquired by the seller within two years before the transaction;
(v) details of a material underwriting discount or commission with respect to the sale of securities by the corporation if any person referred to in paragraph (s) has contracted or will contract with the corporation in respect of an underwriting or is an associate or affiliate of a person that has so contracted or will so contract;
(w) if a person other than the directors or officers of the corporation or any of its subsidiaries or holding bodies corporate manages the corporation or any of its subsidiaries, subject to the requirements of subparagraph (vi), the following information:
(i) details of the management agreement, including the name and address of every person who is a party to the agreement or who is responsible for its performance,
(ii) the name and full address, or, alternatively, solely the municipality of residence or postal address, of each insider of every body corporate with which the corporation or any of its subsidiaries has a management agreement,
(iii) the amounts paid or payable by the corporation and any of its subsidiaries to each person named under subparagraph (i) since the beginning of the corporation’s last completed financial year,
(iv) details of any debt owed to the corporation or any of its subsidiaries by a person referred to in this paragraph, or by that person’s associates or affiliates, that was outstanding at any time since the beginning of the corporation’s last completed financial year,
(v) details of any transaction, other than one referred to in subparagraphs (i) to (iv), entered into with the corporation or any of its subsidiaries or holding bodies corporate since the beginning of the corporation’s last completed financial year, in which a person referred to in subparagraph (i) or (ii) has a material interest that would otherwise be required to be disclosed under subparagraphs (i) to (iv), and
(vi) for the purpose of this paragraph,
(A) details of debt include the largest aggregate amount of debt outstanding at any time during the corporation’s last completed financial year, the nature of the indebtedness, details of the transaction in which it was incurred, the amount at present outstanding and the rate of interest paid or charged on it,
(B) an amount owing for purchases, subject to usual trade terms, for ordinary travel and expense advances or for other transactions in the ordinary course of business may be omitted in determining debt, and
(C) any matter that is not material may be omitted;
(x) in any matter to be acted on at the meeting, other than the election of directors or the appointment of an auditor, details of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, of
(i) each director or officer of the corporation at any time since the beginning of its last completed financial year,
(ii) each person proposed by management as a nominee for election as a director of the corporation, and
(iii) each affiliate or associate of any of the persons referred to in subparagraph (i) or (ii);
(y) if action is to be taken with respect to the authorization or issue of securities, except to exchange the securities for other securities of the corporation,
(i) the designation and number or amount of securities to be authorized or issued,
(ii) a description of the securities, but
(A) if the terms of securities to be authorized cannot be stated because no issue of securities is contemplated in the immediate future, and if no further authorization by shareholders for their issue is to be obtained, a statement that the terms of the securities to be authorized, including dividend or interest rates, conversion prices, voting rights, redemption prices, maturity dates and other matters, will be determined by the directors, and
(B) if the securities are shares of an existing class, the description required, except for a statement of any pre-emptive rights, may be omitted,
(iii) details of the transaction in which the securities are to be issued, including the nature and approximate amount of the consideration received or to be received by the corporation and the purpose for which the consideration has been or is to be used,
(iv) if it is impracticable to furnish the details required under subparagraph (iii), a statement indicating the reason why it is impracticable, the purpose of the authorization and whether shareholders’ approval for the issue of the securities will be sought, and
(v) if the securities are to be issued other than in a general public offering for money or other than rateably to all holders of the same class of securities or all holders of the same class of securities who are resident in Canada, the reasons for the proposed authorization or issue and its effect on the rights of present security holders;
(z) if action is to be taken under section 173 or 174 of the Act to modify the rights, privileges, restrictions or conditions attached to any class of securities of the corporation or to authorize or issue securities in order to exchange them for other securities of the corporation,
(i) the designation and number or amount of outstanding securities that are to be modified, and, if securities are to be issued in exchange, the designation and number or amount of securities to be exchanged and the basis of the exchange,
(ii) details of material differences between the outstanding securities and the modified or new securities,
(iii) the reasons for the proposed modification or exchange and the general effect on the rights of existing security holders,
(iv) a brief statement of arrears in dividends or of defaults in principal or interest in respect of the outstanding securities that are to be modified or exchanged, and
(v) all other information material to the proposed modification or exchange, including, if the corporation is a distributing corporation, information required to be included in a prospectus or other similar document under the securities laws of any of the provinces of Canada, unless an exemption from the laws is available or a waiver of the laws or similar relief is granted by the relevant provincial securities regulator;
(z.1) the material features of a plan, including the reasons for it and its general effect on the rights of existing security holders, if action is to be taken with respect to that plan and the plan is for
(i) an amalgamation with another corporation otherwise than under section 184 of the Act,
(ii) a continuance under the laws of another jurisdiction under section 188 of the Act,
(iii) a sale, lease or exchange of all or substantially all of the property of the corporation under subsection 189(3) of the Act, or
(iv) the liquidation or dissolution of the corporation;
(z.2) if action is to be taken with respect to a plan referred to in subparagraph (z.1)(i), a statement that contains, with respect to the corporation and the other body corporate,
(i) a brief description of the business,
(ii) the location and general character of the plants and other important physical properties,
(iii) a brief description of arrears in dividends or defaults in principal or interest in respect of securities of the corporation or body corporate and of the effect of the plan,
(iv) the existing and pro forma share and loan capital, in tabular form,
(v) a historical summary of earnings, in tabular form, for each of the last five fiscal years, including per-share amounts of net earnings, dividends declared for each year and book value per share at the end of the most recent fiscal year,
(vi) a combined pro forma summary of earnings, in tabular form, for each of the last five fiscal years that indicates the aggregate and per-share earnings for each year and the pro forma book value per share at the end of the most recent fiscal year, but if the transaction will establish a new basis of accounting for the assets of the corporation or body corporate, the pro forma summary of earnings may be provided only for the most recent fiscal year and interim period and shall reflect appropriate pro forma adjustments resulting from the new basis of accounting,
(vii) the high and low sale prices for each quarterly period within the previous two years for each class of securities of the corporation and of the other body corporate that is traded on a stock exchange and that will be materially affected by the plan, and
(viii) an introductory summary, not more than six pages long, of the contents of the proxy circular that highlights the salient features of the transaction, including a summary of the financial information, with appropriate cross-references to the more detailed information in the circular;
(z.3) if action is to be taken with respect to a plan referred to in paragraph (z.1), unless an exemption from the applicable laws is available or a waiver of the laws or similar relief is granted by the relevant securities regulator, the financial statements of the corporation that would be required to be included in a prospectus under the laws of
(i) Ontario,
(ii) Quebec,
(iii) Manitoba,
(iv) British Columbia,
(v) Saskatchewan,
(vi) Alberta, or
(vii) the United States;
(z.4) if action is to be taken as described in paragraph (z.2), unless an exemption from the applicable laws is available or a waiver of the laws or similar relief is granted by the relevant securities regulator, the financial statements of the other corporation that would be required to be included in a prospectus under the laws of
(i) Ontario,
(ii) Quebec,
(iii) Manitoba,
(iv) British Columbia,
(v) Saskatchewan,
(vi) Alberta, or
(vii) the United States;
(z.5) a statement of the right of a shareholder to dissent under section 190 of the Act with respect to any matter to be acted on at the meeting and a brief summary of the procedure to be followed;
(z.6) if action is to be taken with respect to any matter other than the approval of financial statements, including alterations of share capital, amendments to articles, property disposition, amalgamation, arrangements or reorganizations, the substance of each matter or group of related matters, to the extent that it has not been described in paragraphs (a) to (z.5) in sufficient detail to permit shareholders to form a reasoned judgment concerning the matter, and if any of the matters is not required to be submitted to a vote of the shareholders, the reasons for submitting it and the action intended to be taken by management in the event of a negative vote by the shareholders;
(z.7) if the giving of any financial assistance was material to the corporation or any of its affiliates or to the recipient of the assistance, details of that financial assistance by the corporation since the beginning of its last completed financial year in relation to
(i) a shareholder of the corporation or any of its affiliates who is not a director, officer or employee thereof, or to an associate of any such shareholder, or
(ii) any person, in connection with a purchase of shares issued or to be issued by the corporation.
(z.8) a statement, signed by a director or an officer of the corporation, that the contents and the sending of the circular have been approved by the directors; and
(z.9) a statement indicating the final date by which the corporation must receive a proposal for any matter that a person entitled to vote at an annual meeting proposes to raise at the next annual meeting.
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