An Act to amend certain Acts in relation to financial institutions (S.C. 2005, c. 54)
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Assented to 2005-11-25
1991, c. 46BANK ACT
Marginal note:2001, c. 9, s. 183
101. Subsection 743(1) of the Act is replaced by the following:
Marginal note:Court may order meeting to be called
743. (1) A court may, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if
(a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;
(b) it is impracticable to conduct the meeting in the manner required by this Part or the by-laws; or
(c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.
102. Section 746 of the Act is amended by striking out the word “and” at the end of paragraph (d), by adding the word “and” at the end of paragraph (e) and by adding the following after paragraph (e):
(f) the reference to “paragraph 143(1.1)(b)” in subparagraph (b)(vi) of the definition “solicitation” in section 156.01 is to be read as a reference to “paragraph 732(1.1)(b)”.
103. The Act is amended by adding the following after section 753:
Marginal note:Election or appointment as director
753.1 The election or appointment of a person as a director is subject to the following:
(a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or
(b) the person was not present at the meeting when the election or appointment took place but
(i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or
(ii) acted as a director after the election or appointment.
Marginal note:2001, c. 9, s. 183
104. Paragraphs 756(1)(g) and (h) of the Act are replaced by the following:
(g) a director may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion; and
(h) the number of directors required by the by-laws may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion.
Marginal note:2001, c. 9, s. 183
105. Subsection 765(1) of the Act is replaced by the following:
Marginal note:Directors filling vacancy
765. (1) Despite section 772 but subject to subsection (2) and sections 764 and 766, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws.
Marginal note:2001, c. 9, s. 183
106. Paragraph 766(a) of the Act is replaced by the following:
(a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series;
Marginal note:2001, c. 9, s. 183
107. Subsection 771(3) of the Act is replaced by the following:
Marginal note:Director continues to be present
(3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 790(1), present at any particular time during the meeting is considered to be present for the purposes of this section.
108. Section 774 of the Act is amended by adding the following after subsection (4):
Marginal note:Evidence
(5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
Marginal note:2001, c. 9, s. 183
109. Paragraphs 785(b) and (c) of the Act are replaced by the following:
(b) fill a vacancy among the directors, on a committee of directors or in the office of auditor or appoint additional directors;
(c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 706, except in accordance with any authorization made by the directors;
Marginal note:2001, c. 9, s. 183
110. Section 789 of the Act is replaced by the following:
Marginal note:Disclosure of interest
789. (1) A director or officer of a bank holding company shall disclose to the bank holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the bank holding company, whether entered into or proposed, if they
(a) are a party to the contract or transaction;
(b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or
(c) have a material interest in a party to the contract or transaction.
Marginal note:Time of disclosure — director
(2) The disclosure shall be made in the case of a director
(a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;
(b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;
(c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or
(d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.
Marginal note:Time of disclosure — officer
(3) The disclosure required by subsection (1) shall be made in the case of an officer who is not a director
(a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;
(b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or
(c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.
Marginal note:Time of disclosure — contract not requiring approval
(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the bank holding company’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the bank holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.
Marginal note:2001, c. 9, s. 183
111. Subsection 790(1) of the Act is replaced by the following:
Marginal note:Director to abstain
790. (1) A director who is required to make a disclosure under subsection 789(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction
(a) relates primarily to their remuneration as a director, officer, employee or agent of the bank holding company, an entity controlled by the bank holding company or an entity in which the bank holding company has a substantial investment;
(b) is for indemnity under section 799 or insurance under section 800; or
(c) is with an affiliate of the bank holding company.
Marginal note:2001, c. 9, s. 183
112. Sections 791 to 793 of the Act are replaced by the following:
Marginal note:General notice
791. (1) For the purposes of subsection 789(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:
(a) the director or officer is a director or officer of a party referred to in paragraph 789(1)(b) or (c) or a person acting in a similar capacity;
(b) the director or officer has a material interest in the party; or
(c) there has been a material change in the nature of the director’s or officer’s interest in the party.
Marginal note:Access to disclosures
(2) The shareholders of the bank holding company may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 789(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the bank holding company.
Marginal note:Avoidance standards
792. (1) A contract or transaction for which disclosure is required under subsection 789(1) is not invalid and a director or officer is not accountable to the bank holding company or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if
(a) the director or officer disclosed their interest in accordance with section 789 and subsection 791(1);
(b) the directors approved the contract or transaction; and
(c) the contract or transaction was reasonable and fair to the bank holding company at the time that it was approved.
Marginal note:Confirmation by shareholders
(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the bank holding company or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if
(a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders;
(b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and
(c) the contract or transaction was reasonable and fair to the bank holding company at the time that it was approved or confirmed.
Marginal note:Court may set aside or require accounting
793. If a director or officer of a bank holding company fails to comply with any of sections 789 to 792, a court, on application of the bank holding company or any of its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the bank holding company for any profit or gain realized on it.
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