Refusal to Subscribe, Issue, Transfer or Acquire Shares

  •  (1) A Canadian carrier may refuse to accept any subscription for, issue, register the transfer of, purchase or otherwise acquire, any of its voting shares unless a declaration is submitted to the Canadian carrier and the Canadian carrier determines that the effect of the information appearing on the declaration, together with any other information in any books or records of the Canadian carrier, its transfer agent or its registrar is that the subscription, issue, transfer, purchase or acquisition would not result in

    • (a) the percentage of the total voting shares that are beneficially owned, and controlled by, non-Canadians exceeding 20 per cent, in the case of a corporation referred to in subsection 16(1) of the Act; or

    • (b) the percentage of the total voting shares that are beneficially owned, and controlled by, non-Canadians exceeding the percentage that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, in the case of a corporation referred to in subsection 16(2) of the Act.

  • (2) Where the board of a Canadian carrier has information concerning the beneficial ownership, or control, of the Canadian carrier that causes the board to believe that the Canadian carrier is not eligible to operate pursuant to section 16 of the Act and the Canadian carrier intends to take further action pursuant to these Regulations, the Canadian carrier shall, in respect of its voting shares that are publicly traded, immediately make a public announcement to this effect, whether by press release, newspaper advertisement or by any other manner that is reasonably expected to inform the markets in which voting shares are traded, and shall immediately forward a copy of the announcement to the Commission.

Suspension of Voting Rights

  •  (1) The Canadian carrier may, in accordance with section 10, suspend all rights of a shareholder to vote that would otherwise be attached to any voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians, in the order referred to in subsection (2), so that the proportion of the voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians and with respect to which voting rights are not suspended, is reduced to

    • (a) not more than 20 per cent of the total issued and outstanding voting shares, in the case of a corporation referred to in subsection 16(1) of the Act; or

    • (b) a percentage that is equal to, or within five percent of, the percentage of the voting shares of the Canadian carrier that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, in the case of a corporation referred to in subsection 16(2) of the Act.

  • (2) The voting rights referred to in subsection (1) shall be suspended in an order inverse to the date of registration, which shall be considered to be

    • (a) the date of registration of the voting shares on the security register of the Canadian carrier or on the books or records of its transfer agent or registrar; or

    • (b) where the shares are held by an intermediary or a depository, the date of the registration of the transfer of the voting shares on its books or records.

Notice of Excess Voting Shares

  •  (1) Where the board of a Canadian carrier has information concerning the beneficial ownership and control of the Canadian carrier that causes the board to believe that some of the Canadian carrier’s voting shares are excess voting shares and the Canadian carrier intends to take further action pursuant to these Regulations, the Canadian carrier shall immediately send a notice to the registered holders of those voting shares that are chosen in the order referred to in subsection 9(2).

  • (2) A Canadian carrier shall, in the notice referred to in subsection (1),

    • (a) specify the reasons why the board of the Canadian carrier believes that the voting shares referred to in that subsection are excess voting shares;

    • (b) where the Canadian carrier wishes the registered holder to sell or otherwise dispose of the excess voting shares, specify a date, that is not earlier than 60 days and not later than 180 days after the date of the notice, by which the registered holder shall

      • (i) sell or otherwise dispose of the excess voting shares in favour of Canadians and provide written evidence of the sale or other disposition, or

      • (ii) provide written evidence that no such sale or other disposition of excess voting shares is required; and

    • (c) where the board wishes to suspend the voting rights with respect to the excess voting shares identified in the notice, specify that, unless the registered holder complies with the requirement to sell or otherwise dispose of the shares or to provide written evidence pursuant to subparagraph (b)(ii), the voting rights shall be suspended from the date by which the sale or other disposition should have taken place or the evidence should have been provided, and that a sale of those voting shares by the Canadian carrier in accordance with section 11 or a repurchase or redemption by the Canadian carrier in accordance with section 12 may result, in each case without further notice to the registered holder.

  • (3) Where, after the sending of a notice referred to in subsection (1), the registered holder provides the Canadian carrier with written evidence that no sale or other disposition of excess voting shares is required, the board of the Canadian carrier shall, within 10 days after the receipt of the evidence, assess the evidence and determine whether the registered holder’s voting shares are excess voting shares.

  • (4) Where the board of the Canadian carrier determines that shares are not excess voting shares and that no sale or other disposition of the voting shares is required, the Canadian carrier shall so advise the registered holder and the Commission immediately.

  • (5) Where the board of the Canadian carrier determines that the shares are excess voting shares and that a sale or other disposition of excess voting shares is required in order to reduce the total number of voting shares of the carrier that are excess voting shares to zero, in the case of a carrier referred to in subsection 16(1) of the Act, or to zero or to any percentage such that the percentage of the voting shares that is beneficially owned, and controlled, by non-Canadians is within five per cent of the percentage of the voting shares of the corporation that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, in the case of a carrier referred to in subsection 16(2) of the Act, the Canadian carrier shall send a notification to the registered holder of the excess voting shares,

    • (a) informing the registered holder of the board’s determination;

    • (b) confirming that the shares are to be sold or otherwise disposed of by the date specified in the notification; and

    • (c) specifying a further date, that is not later than 60 days after the date of the notification, by which the registered holder shall provide written evidence to the Canadian carrier of the sale or other disposition, failing which the rights of the shareholder to vote with respect to the excess voting shares will be suspended from that further date.

  • (6) The Canadian carrier shall send to the Commission a copy of

    • (a) the notice referred to in subsection (1) and the notification referred to in subsection (5), at the same time that it is sent to the registered holder; and

    • (b) the written evidence referred to in subsections (2), (3) and (5), immediately on its receipt.

Sale, Repurchase or Redemption of Shares

  •  (1) Where, in accordance with these Regulations, the board of a Canadian carrier determines that some of the Canadian carrier’s voting shares are excess voting shares, the Canadian carrier may sell, as if it were the owner thereof, any of those excess voting shares, if the registered holder has been requested to sell the shares and has not done so and the sale is conducted in accordance with these Regulations.

  • (2) The Canadian carrier may sell any excess voting shares

    • (a) on the principal stock exchange;

    • (b) where there is no principal stock exchange, on such other stock exchange or organized market on which the voting shares are listed or traded as the board of the Canadian carrier shall determine; or

    • (c) where the voting shares are not listed or traded on any stock exchange or organized market, in such other manner that is intended to obtain fair market value for the shares as the board of the Canadian carrier shall determine.

  • (3) The net proceeds of the sale of excess voting shares sold in accordance with this section shall be the proceeds after the deduction of any commission, tax or other cost of sale.

  • (4) For all purposes of a sale of excess voting shares, the Canadian carrier is the agent and lawful attorney of the registered holder and of the beneficial owner of the excess voting shares.

  • (5) On completion of the sale of the excess voting shares, any voting rights of those shares that have been suspended shall automatically be restored.

  •  (1) Where the board of the Canadian carrier determines that it is likely that a sale of excess voting shares would have a material adverse effect on the market value of the shares of the Canadian carrier, the Canadian carrier may elect, by resolution of its board, to repurchase or redeem the excess voting shares, without further notice to the registered holder, in accordance with this section and sections 13 and 14.

  • (2) The price paid by the Canadian carrier to repurchase or redeem any excess voting shares shall be

    • (a) the average of the closing price per share of the voting shares for the last 10 trading days during which at least one board lot of voting shares has traded in the period ending on the trading day immediately preceding the date of the redemption or repurchase, on

      • (i) the principal stock exchange, or

      • (ii) where there is no principal stock exchange, such other stock exchange or organized market as the board of the Canadian carrier shall determine on which the required trading has occurred; or

    • (b) calculated on the basis of their fair market value as of the date of the redemption or repurchase, as determined by the board of the Canadian carrier, where the required trading of voting shares referred to in paragraph (a) has not occurred on the principal stock exchange or any other stock exchange or organized market.

 
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