Ontario Business Corporations Act
Part VII Shareholders
Section 99

Proposal

(1) A registered holder of shares entitled to vote or a beneficial owner of shares that are entitled to be voted at a meeting of shareholders may,

(a) submit to the corporation notice of a proposal; and

(b) discuss at the meeting any matter in respect of which the registered holder or beneficial owner would have been entitled to submit a proposal.

Proof of status

(1.1)  If a person claims to be a beneficial owner of shares of a corporation for the purposes of subsection (1), the corporation may require the person to provide proof that the person is a beneficial owner of shares of the corporation.

Same

(1.2)  A written statement by a securities intermediary, as defined in the Securities Transfer Act, 2006, that a person is a beneficial owner of shares of the corporation is sufficient proof for the purposes of subsection (1.1).

Circulating proposal

(2) Where a corporation receives notice of a proposal,

(a) if the corporation provides a management information circular, it shall set out the proposal in the management information circular or attach the proposal to that circular; or

(b ) if the corporation does not provide a management information circular, it shall set out the proposal in the notice of meeting for the shareholders’ meeting at which the matter is proposed to be raised or shall attach the proposal to such notice of meeting.

Statement in support of proposal

(3) At the request of a person who submits notice of a proposal, the corporation shall include in the management information circular referred to in clause (2)(a) or the notice of meeting referred to in clause (2)(b), or shall attach to it, the person’s statement in support of the proposal and the person’s name and address.

Same

(3.1) The proposal referred to in subsection (2) and the statement referred to in subsection (3) shall together not exceed the prescribed maximum number of words.

Proposal may include nominations

(4) A proposal may include nominations for the election of directors if the proposal is signed by one or more holders of shares representing in the aggregate not less than 5 per cent of the shares or 5 per cent of the shares of a class or series of shares of the corporation entitled to vote at the meeting to which the proposal is to be presented, but this subsection does not preclude nominations being made at a meeting of shareholders.

Where subss. (2), (3) do not apply

(5) A corporation is not required to comply with subsections (2) and (3) where,

(a) in the case of an offering corporation, notice of the proposal is submitted to the corporation less than 60 days before,

(i) the anniversary date of the last annual meeting, if the matter is proposed to be raised at an annual meeting, or

(ii) the date of a meeting other than the annual meeting, if the matter is proposed to be raised at a meeting other than the annual meeting;

(a.1) in the case of a corporation other than an offering corporation, notice of the proposal is submitted to the corporation less than the minimum number of days determined under subsection (5.1) before,

(i) the anniversary date of the last annual meeting, if the matter is proposed to be raised at an annual meeting, or

(ii) the date of a meeting other than the annual meeting, if the matter is proposed to be raised at a meeting other than the annual meeting;

(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal grievance against the corporation or its directors, officers or security holders;

(b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the corporation;

(c) within two years before the receipt by the corporation of a person’s notice of proposal, the person failed to present, in person or by proxy, at a meeting of the corporation’s shareholders, a proposal which had been submitted by the person and had been included in a management information circular or a notice of meeting relating to that shareholders’ meeting; or

(d) the following has occurred:

(i) substantially the same proposal was submitted to shareholders of the corporation in a management information circular, dissident’s information circular, or notice of a meeting relating to a previous meeting of shareholders,

(ii) the previous meeting referred to in subclause (i) was held within five years, or such other period as may be prescribed, before the receipt by the corporation of the person’s current notice of proposal, and

(iii) at that previous meeting, the proposal did not receive the minimum amount of support required under subsection (5.4).

Minimum support

(5.4) For the purpose of subclause (5)(d)(iii), the minimum amount of support that the proposal must have received at the previous meeting is determined as follows:

  1. If the previous meeting was the first time, within the period referred to in subclause (5)(d)(ii), that a substantially similar proposal was made at a meeting of shareholders, the minimum amount of support the proposal must have received at that previous meeting is 3 per cent, or such other percentage as may be prescribed, of the total number of shares voted at that meeting.

  2. If the previous meeting was the second time, within the period referred to in subclause (5)(d)(ii), that a substantially similar proposal was made at a meeting of shareholders, the minimum amount of support the proposal must have received at that previous meeting is 6 per cent, or such other percentage as may be prescribed, of the total number of shares voted at that meeting.

  3. If the previous meeting was at least the third time, within the period referred to in subclause (5)(d)(ii), that a substantially similar proposal was made at a meeting of shareholders, the minimum amount of support the proposal must have received at that previous meeting is 10 per cent, or such other percentage as may be prescribed, of the total number of shares voted at that meeting.

Where no liability

(6) No corporation or person acting on its behalf incurs any liability by reason only of circulating a proposal or statement in compliance with this section.

Notice of refusal

(7) Within 10 days after receiving notice of a proposal from a person under clause (1)(a), a corporation that refuses to circulate the proposal as required by this section shall send the person notice of the corporation’s intention not to circulate the proposal and a statement of the reasons for the refusal.

Application to court

(8) On the application of a person submitting a proposal who claims to be aggrieved by a corporation’s refusal under subsection (7), a court may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.

Idem

(9) The corporation or any person aggrieved by a proposal may apply to the court for an order permitting the corporation to omit the proposal from the management information circular, and the court, if it is satisfied that subsection (5) applies, may make such order as it thinks fit.

Idem

(10) An applicant under subsection (8) or (9) shall give the Director notice of the application and the Director is entitled to appear and be heard in person or by counsel.

Definition

(11) In this section, “proposal” means a matter that a registered holder or beneficial owner of shares entitled to be voted proposes to raise at a meeting of shareholders.