794. (1) Directors of a bank holding company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 709(1) or the issue of subordinated indebtedness contrary to section 723 for a consideration other than money are jointly and severally, or solidarily, liable to the bank holding company to make good any amount by which the consideration received is less than the fair equivalent of the money that the bank holding company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.

(2) Directors of a bank holding company who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the bank holding company any amounts so distributed or paid and not otherwise recovered by the bank holding company and any amounts in relation to any loss suffered by the bank holding company:

(a) a redemption or purchase of shares contrary to section 715;

(b) a reduction of capital contrary to section 718;

(c) a payment of a dividend contrary to section 722; or

(d) a payment of an indemnity contrary to section 799.

2001, c. 9, s. 183; 2005, c. 54, s. 113(E).

795. (1) A director who has satisfied a judgment in relation to the director’s liability under section 794 is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded.

(2) A director who is liable under section 794 is entitled to apply to a court for an order compelling a shareholder or other person to pay or deliver to the director any money or property that was paid or distributed to the shareholder or other person contrary to section 715, 718, 722 or 799.

(3) Where an application is made to a court under subsection (2), the court may, where it is satisfied that it is equitable to do so,

(a) order a shareholder or other person to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other person contrary to section 715, 718, 722 or 799;

(b) order a bank holding company to return or issue shares to a person from whom the bank holding company has purchased, redeemed or otherwise acquired shares; or

(c) make any further order it thinks fit.

2001, c. 9, s. 183.

796. An action to enforce a liability imposed by section 794 may not be commenced after two years from the date of the resolution authorizing the action complained of.

2001, c. 9, s. 183.

797. (1) Subject to subsections (2) and (3), the directors of a bank holding company are jointly and severally, or solidarily, liable to each employee of the bank holding company for all debts not exceeding six months wages payable to the employee for services performed for the bank holding company while they are directors.

(2) A director is not liable under subsection (1) unless

(a) the bank holding company has been sued for the debt within six months after it has become due and execution has been returned unsatisfied in whole or in part;

(b) the bank holding company has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has been proven within six months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date of dissolution; or

(c) the bank holding company has made an assignment or a bankruptcy order has been made against it under the Bankruptcy and Insolvency Act and a claim for the debt has been proved within six months after the assignment or bankruptcy order.

(3) A director is not liable under subsection (1) unless the director is sued for a debt referred to in that subsection while a director or within two years after the director has ceased to be a director.

(4) Where execution referred to in paragraph (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

(5) Where a director of a bank holding company pays a debt referred to in subsection (1) that is proven in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference that the employee would have been entitled to and, where a judgment has been obtained, the director is entitled to an assignment of the judgment.

(6) A director of a bank holding company who has satisfied a claim under this section is entitled to a contribution from the other directors of the bank holding company who are liable for the claim.

2001, c. 9, s. 183; 2004, c. 25, s. 186; 2005, c. 54, s. 114(E).

798. (1) A director, officer or employee of a bank holding company is not liable under section 794 or 797 and has fulfilled their duty under subsection 748(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

(a) financial statements of the bank holding company that were represented to them by an officer of the bank holding company or in a written report of the auditor of the bank holding company fairly to reflect the financial condition of the bank holding company; or

(b) a report of a person whose profession lends credibility to a statement made by them.

(2) A director or officer of a bank holding company has fulfilled their duty under subsection 748(1) if they relied in good faith on

(a) financial statements of the bank holding company that were represented to them by an officer of the bank holding company or in a written report of the auditor of the bank holding company fairly to reflect the financial condition of the bank holding company; or

(b) a report of a person whose profession lends credibility to a statement made by them.

2001, c. 9, s. 183; 2005, c. 54, s. 115.

799. (1) A bank holding company may indemnify a director or officer of the bank holding company, a former director or officer of the bank holding company or another person who acts or acted, at the bank holding company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the bank holding company or other entity.

(2) A bank holding company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).

(3) A bank holding company may not indemnify a person under subsection (1) unless

(a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the bank holding company or the other entity for which they acted at the bank holding company’s request as a director or officer or in a similar capacity; and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.

(4) A bank holding company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the bank holding company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the bank holding company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).

(5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the bank holding company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the bank holding company or other entity described in that subsection if the person

(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and

(b) fulfils the conditions set out in subsection (3).

(6) A bank holding company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the bank holding company may indemnify under those subsections.

2001, c. 9, s. 183; 2005, c. 54, s. 115.

800. A bank holding company may purchase and maintain insurance for the benefit of any person referred to in section 799 against any liability incurred by the person

(a) in the capacity of a director or an officer of the bank holding company, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the bank holding company; or

(b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the bank holding company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.

2001, c. 9, s. 183; 2005, c. 54, s. 116.

801. (1) A bank holding company or a person referred to in section 799 may apply to a court for an order approving an indemnity under that section and the court may so order and make any further order it thinks fit.

(2) An applicant under subsection (1) shall give the Superintendent written notice of the application and the Superintendent is entitled to appear and to be heard at the hearing of the application in person or by counsel.

(3) On an application under subsection (1), the court may order notice to be given to any interested person and that person is entitled to appear and to be heard in person or by counsel at the hearing of the application.

2001, c. 9, s. 183.

802. Sections 215 to 222 apply in respect of bank holding companies, subject to the following:

(a) references to “bank” in those sections are to be read as references to “bank holding company”;

(b) references to “this Act” in those sections are to be read as references to “this Part”;

(c) the reference to “subsection 159(1) and section 168” in paragraph 217(1)(i) is to be read as a reference to “subsection 749(1) and section 756”; and

(d) the reference to “sections 143 and 144” in subsection 221(1) is to be read as a reference to “sections 732 and 733”.

2001, c. 9, s. 183.

803. (1) On the joint application of two or more bodies corporate incorporated by or under an Act of Parliament, including banks and bank holding companies, the Minister may issue letters patent amalgamating and continuing the applicants as one bank holding company.

(2) Despite subsection (1), if one of the applicants is a bank holding company that controls a bank named in Schedule I as that Schedule read immediately before the day section 184 of the Financial Consumer Agency of Canada Act comes into force, other than a bank in respect of which the Minister has specified that subsection 378(1) no longer applies, the Minister shall not issue letters patent referred to in subsection (1) unless

(a) the amalgamated bank holding company would be a widely held bank holding company; or

(b) the amalgamated bank holding company would be controlled by a widely held bank holding company that, at the time the application was made, controlled

(i) the applicant, or

(ii) any other applicant that is a bank holding company that controls a bank named in Schedule I as that Schedule read immediately before the day section 184 of the Financial Consumer Agency of Canada Act comes into force, other than a bank in respect of which the Minister has specified that subsection 378(1) no longer applies.

(3) Despite subsection (1), if the amalgamated bank holding company would be a bank holding company with equity of five billion dollars or more, the Minister shall not issue letters patent referred to in that subsection unless the amalgamated bank holding company is

(a) widely held;

(b) controlled, within the meaning of paragraphs 3(1)(a) and (d), by a widely held bank, or by a widely held bank holding company, that controlled one of the applicants at the time the application was made; or

(c) controlled, within the meaning of paragraph 3(1)(d), by a widely held insurance holding company, or by an eligible Canadian financial institution, within the meaning of subsection 370(1), other than a bank, or by an eligible foreign institution, within the meaning of subsection 370(1), that controlled one of the applicants at the time the application was made.

2001, c. 9, s. 183.

804. (1) Each applicant proposing to amalgamate shall enter into an amalgamation agreement.

(2) Every amalgamation agreement shall set out the terms and means of effecting the amalgamation and, in particular,

(a) the name of the amalgamated bank holding company and the province in which its head office is to be situated;

(b) the name and place of ordinary residence of each proposed director of the amalgamated bank holding company;

(c) the manner in which the shares of each applicant are to be converted into shares or other securities of the amalgamated bank holding company;

(d) if any shares of an applicant are not to be converted into shares or other securities of the amalgamated bank holding company, the amount of money or securities that the holders of those shares are to receive in addition to or in lieu of shares or other securities of the amalgamated bank holding company;

(e) the manner of payment of money in lieu of the issue of fractional shares of the amalgamated bank holding company or of any other body corporate that are to be issued in the amalgamation;

(f) the proposed by-laws of the amalgamated bank holding company;

(g) details of any other matter necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated bank holding company; and

(h) the proposed effective date of the amalgamation.

(3) If shares of one of the applicants are held by or on behalf of another of the applicants, other than shares held in the capacity of a personal representative or by way of security, the amalgamation agreement must provide for the cancellation of those shares when the amalgamation becomes effective without any repayment of capital in respect thereof, and no provision shall be made in the agreement for the conversion of those shares into shares of the amalgamated bank holding company.

2001, c. 9, s. 183; 2005, c. 54, s. 117.

805. An amalgamation agreement shall be submitted to the Minister for approval and any approval of such an agreement pursuant to subsection 806(4) by the holders of any class or series of shares of an applicant is invalid unless, prior to the date of the approval, the Minister has approved the agreement in writing.

2001, c. 9, s. 183.

806. (1) The directors of each applicant shall submit an amalgamation agreement for approval to a meeting of the holders of shares of the applicant body corporate of which they are directors and, subject to subsection (3), to the holders of each class or series of such shares.

(2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.

(3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.

(4) Subject to subsection (3), an amalgamation agreement is approved when the shareholders of each applicant that is a body corporate have approved the amalgamation by special resolution.

(5) An amalgamation agreement may provide that, at any time before the issue of letters patent of amalgamation, the agreement may be terminated by the directors of an applicant notwithstanding that the agreement has been approved by the shareholders of all or any of the applicant bodies corporate.

2001, c. 9, s. 183; 2005, c. 54, s. 118.

807. (1) A bank holding company may, without complying with sections 804 to 806, amalgamate with one or more bodies corporate that are incorporated by or under an Act of Parliament if the body or bodies corporate, as the case may be, are wholly-owned subsidiaries of the bank holding company and

(a) the amalgamation is approved by a resolution of the directors of the bank holding company and of each amalgamating subsidiary; and

(b) the resolutions provide that

(i) the shares of each amalgamating subsidiary will be cancelled without any repayment of capital in respect thereof,

(ii) the letters patent of amalgamation and the by-laws of the amalgamated bank holding company will be the same as the incorporating instrument and the by-laws of the amalgamating bank holding company that is the holding body corporate, and

(iii) no securities will be issued by the amalgamated bank holding company in connection with the amalgamation.

(2) Two or more bodies corporate incorporated by or under an Act of Parliament may amalgamate and continue as one bank holding company without complying with sections 804 to 806 if

(a) at least one of the applicants is a bank holding company;

(b) the applicants are all wholly-owned subsidiaries of the same holding body corporate;

(c) the amalgamation is approved by a resolution of the directors of each of the applicants; and

(d) the resolutions provide that

(i) the shares of all applicants, except those of one of the applicants that is a bank holding company, will be cancelled without any repayment of capital in respect thereof,

(ii) the letters patent of amalgamation and the by-laws of the amalgamated bank holding company will be the same as the incorporating instrument and the by-laws of the amalgamating bank holding company whose shares are not cancelled, and

(iii) the stated capital of the amalgamating bank holding companies and bodies corporate whose shares are cancelled will be added to the stated capital of the amalgamating bank holding company whose shares are not cancelled.

2001, c. 9, s. 183.

808. (1) Subject to subsection (2), unless an amalgamation agreement is terminated in accordance with subsection 806(5), the applicants shall, within three months after the approval of the agreement in accordance with subsection 806(4) or the approval of the directors in accordance with subsection 807(1) or (2), jointly apply to the Minister for letters patent of amalgamation continuing the applicants as one bank holding company.

(2) No application for the issue of letters patent under subsection (1) may be made unless

(a) notice of intention to make such an application has been published at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of each applicant is situated; and

(b) the application is supported by satisfactory evidence that the applicants have complied with the requirements of this Part relating to amalgamations.

(3) If two or more bodies corporate, none of which is a bank holding company, apply for letters patent under subsection (1), sections 672 to 674 apply in respect of the application with any modifications that the circumstances require.

(4) Before issuing letters patent of amalgamation continuing the applicants as one bank holding company, the Minister shall take into account all matters that the Minister considers relevant to the application, including

(a) the sources of continuing financial support for any bank that will be a subsidiary of the amalgamated bank holding company;

(b) the soundness and feasibility of the plans of the applicants for the future conduct and development of the business of any bank that will be a subsidiary of the amalgamated bank holding company;

(c) the business record and experience of the applicants;

(d) the reputation of the applicants for being operated in a manner that is consistent with the standards of good character and integrity;

(e) whether the amalgamated bank holding company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

(f) the impact of any integration of the operations and businesses of the applicants on the conduct of those operations and businesses;

(g) the opinion of the Superintendent regarding the extent to which the proposed corporate structure of the amalgamated bank holding company and its affiliates may affect the supervision and regulation of any bank that will be its subsidiary, having regard to

(i) the nature and extent of the proposed financial services activities to be carried out by the affiliates of the amalgamated bank holding company, and

(ii) the nature and degree of supervision and regulation applying to the proposed financial services activities to be carried out by the affiliates of the amalgamated bank holding company; and

(h) the best interests of the financial system in Canada.

2001, c. 9, s. 183.

809. (1) Where an application has been made to the Minister in accordance with section 808, the Minister may issue letters patent of amalgamation continuing the applicants as one bank holding company.

(2) Where letters patent are issued pursuant to this section, section 676 applies with such modifications as the circumstances require in respect of the issue of the letters patent.

(3) The Superintendent shall cause to be published in the Canada Gazette notice of the issuance of letters patent pursuant to subsection (1).

2001, c. 9, s. 183.

810. (1) If a bank holding company or any director, officer, employee or agent of a bank holding company is contravening or has failed to comply with any term or condition made in respect of the issuance of letters patent of amalgamation, the Minister may, in addition to any other action that may be taken under this Act, apply to a court for an order directing the bank holding company or the director, officer, employee or agent to comply with the term or condition, cease the contravention or do any thing that is required to be done, and on the application the court may so order and make any other order it thinks fit.

(2) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court.

2001, c. 9, s. 183.

811. (1) On the day provided for in the letters patent issued under section 809,

(a) the amalgamation of the applicants and their continuance as one bank holding company becomes effective;

(b) the property of each applicant continues to be the property of the amalgamated bank holding company;

(c) the amalgamated bank holding company continues to be liable for the obligations of each applicant;

(d) any existing cause of action, claim or liability to prosecution is unaffected;

(e) any civil, criminal or administrative action or proceeding pending by or against an applicant may be continued to be prosecuted by or against the amalgamated bank holding company;

(f) any conviction against, or ruling, order or judgment in favour of or against, an applicant may be enforced by or against the amalgamated bank holding company;

(g) if any director or officer of an applicant continues as a director or officer of the amalgamated bank holding company, any disclosure by that director or officer of a material interest in any contract made to the applicant shall be deemed to be disclosure to the amalgamated bank holding company; and

(h) the letters patent of amalgamation are the incorporating instrument of the amalgamated bank holding company.

(2) Any deemed disclosure under paragraph (1)(g) shall be recorded in the minutes of the first meeting of directors of the amalgamated bank holding company.

2001, c. 9, s. 183.

812. (1) Despite any other provision of this Act or the regulations, the Minister may, by order, on the recommendation of the Superintendent, grant to a bank holding company in respect of which letters patent were issued under subsection 809(1) permission to

(a) engage in a business activity specified in the order that a bank holding company is not otherwise permitted by this Act to engage in and that one or more of the amalgamating bodies corporate was engaging in at the time application for the letters patent was made;

(b) continue to have issued and outstanding debt obligations the issue of which is not authorized by this Act if the debt obligations were outstanding at the time the application for the letters patent was made;

(c) hold assets that a bank holding company is not otherwise permitted by this Act to hold if the assets were held by one or more of the amalgamating bodies corporate at the time the application for the letters patent was made;

(d) acquire and hold assets that a bank holding company is not otherwise permitted by this Act to acquire or hold if one or more of the amalgamating bodies corporate were obliged, at the time the application for the letters patent was made, to acquire those assets; and

(e) maintain outside Canada any records or registers required by this Act to be maintained in Canada and maintain and process, outside Canada, information and data relating to the preparation and maintenance of such records or registers.

(2) The permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding

(a) with respect to any matter described in paragraph (1)(a), thirty days after the date of issue of the letters patent or, where the activity is conducted pursuant to an agreement existing on the date of issue of the letters patent, the expiration of the agreement;

(b) with respect to any matter described in paragraph (1)(b), ten years; and

(c) with respect to any matter described in any of paragraphs (1)(c) to (e), two years.

(3) Subject to subsection (4), the Minister may, by order on the recommendation of the Superintendent, renew a permission granted by order under subsection (1) with respect to any matter described in any of paragraphs (1)(b) to (d) for any further period or periods that the Minister considers necessary.

(4) The Minister shall not grant to a bank holding company any permission

(a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the effective date of the letters patent of amalgamation, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the bank holding company that the bank holding company will not be able at law to redeem at the end of the ten years the outstanding debt obligations to which the permission relates; and

(b) with respect to matters described in paragraphs (1)(c) and (d), that purports to be effective more than ten years after the effective date of the letters patent.

2001, c. 9, s. 183.

813. (1) A sale, lease or exchange of all or substantially all the property of a bank holding company requires the approval of the shareholders in accordance with subsections (2) to (7).

(2) A notice of a meeting of shareholders complying with sections 727 and 730 shall be sent in accordance with those sections to each shareholder and shall include or be accompanied by a copy or summary of the agreement of sale, lease or exchange.

(3) At the meeting referred to in the notice, the shareholders may authorize the sale, lease or exchange and may fix or authorize the directors to fix any of the sale’s, lease’s or exchange’s terms and conditions.

(4) Each share of the bank holding company carries the right to vote in respect of the proposal whether or not the share otherwise carries the right to vote.

(5) The holders of shares of a class or series of shares of the bank holding company are entitled to vote separately as a class or series in respect of the proposal if the shares of the class or series are affected by the proposed transaction in a manner different from the shares of another class or series.

(6) For the purpose of subsection (1), the proposal is not approved unless the holders of the shares of each class or series of shares entitled to vote separately on the proposal have approved the proposal by special resolution.

(7) Where a special resolution under subsection (6) approving a proposed transaction so states, the directors of a bank holding company may, subject to the rights of third parties, abandon the transaction without further approval of the shareholders.

2001, c. 9, s. 183.