Refusal to Subscribe, Issue, Transfer or Acquire Shares

 A carrier holding corporation 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 carrier holding corporation and the carrier holding corporation determines that the effect of the information appearing on the declaration, together with any other information in any books or records of the carrier holding corporation, or the Canadian carrier or either of their transfer agents or registrars is that the subscription, issue, transfer, purchase or acquisition would not result in

  • (a) the percentage of the total voting shares of the carrier holding corporation that are beneficially owned and controlled by non-Canadians exceeding 33 1/3 per cent, in the case of a qualified corporation; or

  • (b) the percentage of the total voting shares in the acquiring corporation that are beneficially owned and controlled by non-Canadians exceeding the percentage of voting shares in the carrier that were beneficially owned and controlled by non-Canadians as at July 22, 1987.

Suspension of Voting Rights

  •  (1) The carrier holding corporation may, in accordance with section 22, 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 33 1/3 per cent of the total issued and outstanding voting shares of the carrier holding corporation, where the corporation wishes to regain its status as a qualified corporation; or

    • (b) a percentage that is equal to, or within five per cent of, the percentage of the voting shares of the carrier that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, where the corporation is an acquiring corporation.

  • (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 the registration of the voting shares on the security register of the carrier holding corporation or in 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 registration of the transfer of the voting shares on its books or records.

Notice of Holdco Excess Voting Shares

  •  (1) Where the board of a carrier holding corporation has information concerning the beneficial ownership or control of the carrier holding corporation that causes the board to believe that some of the carrier holding corporation’s voting shares are holdco excess voting shares and the carrier holding corporation intends to take further action pursuant to these Regulations, the carrier holding corporation shall immediately send a notice to the registered holders of those voting shares that are chosen in the order referred to in subsection 21(2).

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

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

    • (b) where the carrier holding corporation wishes the registered holder to sell or otherwise dispose of the holdco excess voting shares identified in the notice, 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 holdco 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 holdco excess voting shares is required; and

    • (c) where the board wishes to suspend the voting rights with respect to the holdco 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 provide written evidence pursuant to subparagraph (b)(ii), the voting rights shall be suspended from the date on 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 carrier holding corporation in accordance with section 23 or a repurchase or redemption by the carrier holding corporation in accordance with section 24 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 carrier holding corporation with written evidence that no sale or other disposition of excess voting shares is required, the board of the carrier holding corporation shall, within 10 days after the receipt of the evidence, assess the evidence and determine whether the registered holder’s voting shares are holdco excess voting shares.

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

  • (5) Where the board of the carrier holding corporation determines that the shares are holdco excess voting shares and that a sale or other disposition of holdco excess voting shares is required in order for the carrier holding corporation to be a qualified corporation, or, where the carrier holding corporation is an acquiring corporation, in order to reduce the total number of voting shares in the carrier holding corporation that are holdco excess voting shares 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 carrier that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, the carrier holding corporation shall send a notification to the registered holder of the holdco excess voting shares,

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

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

    • (c) specifying therein 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 carrier holding corporation 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.

Sale, Repurchase or Redemption of Shares

  •  (1) For the purposes of ensuring that a carrier holding corporation continues to be a qualified corporation, or, where the carrier holding corporation is an acquiring corporation, that the percentage of its voting shares that are beneficially owned, and controlled, by Canadians is within five per cent of the percentage of the voting shares in the carrier that were beneficially owned, and controlled, by Canadians as at July 22, 1987, the carrier holding corporation may sell, as if it were the owner thereof, any voting shares in the carrier holding corporation that the board of the carrier holding corporation determines to be holdco excess voting shares in accordance with these Regulations, 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 carrier holding corporation may sell any holdco excess voting shares

    • (a) on the holdco principal stock exchange;

    • (b) where there is no holdco 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 carrier holding corporation shall determine; or

    • (c) where the voting shares of the carrier holding corporation 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 carrier holding corporation shall determine.

  • (3) The net proceeds of sale of holdco 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 holdco excess voting shares, the carrier holding corporation is the agent and lawful attorney of the registered holder and of the beneficial owner of the holdco excess voting shares.

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

  •  (1) Where the board of the carrier holding corporation determines that it is likely that a sale of holdco excess voting shares would have a material adverse effect on the market value of the shares of the carrier holding corporation, the carrier holding corporation may elect, by resolution of its board, to repurchase or redeem the holdco excess voting shares, without further notice to the registered owner, in accordance with this section and sections 25 and 26.

  • (2) The price paid by the carrier holding corporation to repurchase or redeem any holdco 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 holdco principal stock exchange, or

      • (ii) where there is no holdco principal stock exchange, such other stock exchange or organized market as the board of the carrier holding corporation 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 carrier holding corporation, where the required trading of voting shares referred to in paragraph (a) has not occurred on the holdco principal stock exchange or any other stock exchange or organized market.

 
Date modified: