Presentation of By-law Changes Overview FirstOntario Credit Union - - PDF document

Presentation of By-law Changes

Overview

FirstOntario Credit Union Limited (“FirstOntario”) is authorized by the Credit Unions and Caisses Populaires Act, 1994 (the “CUCPA”) to amend its by-laws. FirstOntario is committed to the effective governance of the Credit Union and has endeavoured to normalize and strengthen its by-laws to this end. Once approved by its Board, FirstOntario is required to present proposed by-laws changes to the members for confirmation by special resolution at its next annual general meeting. The Governance and Elections Committee was charged with the responsibility to review and recommend changes to FirstOntario’s by-laws. The committee met on several occasions with the assistance of legal counsel from RZCD Law Firm LLP, and Jennifer Saunders-Finlay, FirstOntario’s VP Governance. Following the committee’s review, the Board met to review all proposed by-law changes. The Board approved the proposed by-law changes that are being presented to the membership for confirmation and approval at this evening’s annual general meeting. To assist the membership in reviewing all by-law changes, we have summarized the changes below.

By-law changes

With the assistance of legal counsel from RZCD Law firm LLP, the Board has reviewed and is recommending the following changes to FirstOntario’s by-laws. The amended sections and articles are set out below, along with a summary of the amendments the Credit Union is proposing:

• Section 3.02 – The Credit Union proposes changing its fiscal year-end to December 31.

Under the CUCPA, if a credit union which had a fiscal year-end other than December 31 on October 1, 2009 wishes to change its fiscal year-end, it must change that year- end to December 31. This change will impact the scheduling of the Credit Union’s annual general meeting, which will now occur in March or April. Page 1

• Article Four Point One – The Credit Union proposes an extensive revision to this
• article. The eventual objective of these revisions is to eliminate the mail-in balloting

procedure for Board elections, to authorize the Board to, at its discretion, permit voting in Board elections prior to the annual general meeting in all branches and administrative offices of the Credit Union, and/or electronically.

• Section 4.1.07 (iv) – The Credit Union proposes to remove a requirement that nominees

for election to the Board deliver a current passport-sized photograph of themselves as part of the nomination package.

• Sections 6.01 and 6.04 – The Credit Union proposes the removal of the requirement

that the Corporate Secretary be a director of the Credit Union.

Changes

Section 3.02 - Financial Year 3.02 The financial year of the Credit Union shall end on August December 31 of each calendar year. Article Four Point One – The changes to this article are so numerous and scattered throughout the article that a comparison of the existing and proposed sections is confusing. A summary of the changes, therefore, follows: Section 4.1.01 (a) and (e) – The definitions of “Ballot” and “Form of Ballot” are amended to permit electronic forms which are verified otherwise than by the physical signature of the member. Section 4.1.04 (ii) – This section is amended to require that notice of the nomination period be sent by e-mail unless the member to which the notice is being sent has not provided FirstOntario with an e-mail address. Section 4.1.09 – This section is amended to specifically state that voting in Board elections will

• ccur only prior to the annual general meeting. Voting will occur, at the discretion of and in

manner prescribed by the Board, either at all FirstOntario branches or administrative offices, or electronically, or both. The Board also has the discretion to permit voting by other means in any particular Board election (see comments on section 4.1.19 below). Page 2

Page 3 This section is further amended to require that notice of the election process be sent by e-mail to every member who has provided the Credit Union with an e-mail address, and only otherwise mailed to the member. This section is also further amended to require that this notice of the election process contain voting instructions, information on voting times and places, and conditions of eligibility. Section 4.1.10 – This section is amended to provide that the written notice in the branch specify the procedure by which a member may vote in that branch or obtain the required information and credentials to cast an electronic ballot. Section 4.1.11 – This section is deleted because it outlined a now unnecessary procedure which was to be followed in case of a postal strike. Subsequent sections have been re-numbered accordingly. Section 4.1.11 (formerly section 4.1.12) – This section is amended to contemplate the verification

• f a ballot otherwise than in paper form and therefore not bearing the signature of the member

casting it. Section 4.1.12 (formerly section 4.1.13) – This section is amended to delete now unnecessary requirements for ballots which are in paper form and mailed back to FirstOntario bearing the physical signature of the members voting them. This section is also amended to delete the now unnecessary requirement that the voting period not begin for at least forty-five days after the notice is available. Section 4.1.13 (formerly section 4.1.14) – This section is amended to permit electronic forms of ballot, and to specify that ballots must be cast, in the case of those cast in a branch, prior to the close of business of that branch or, in the case of those cast electronically, prior to 11:59 p.m., on the last day specified for balloting. Section 4.1.14 (formerly section 4.1.15) – This section is amended to eliminate the requirements dealing with verifying a paper ballot submitted by mail, and to simply require the verification of all ballots cast in branch as well as the records of all ballots cast electronically, and the counting

• f the paper ballots.

Section 4.1.15 (formerly section 4.1.16) – This section is amended to provide for a recount of the paper ballots and the records produced regarding the electronic ballots.

Page 4 Section 4.1.16 (formerly section 4.1.17) – This section is amended to provide that the accidental

• mission to send a ballot to a member, the inability of a member to cast an in-branch ballot

because the member attempted to do so after the branch had closed on the last day of balloting, and the inability of a member to cast an electronic ballot because the member attempted to do so after 11:59 p.m. on the last day of voting, do not invalidate the election. Section 4.1.17 (formerly section 4.1.18) – This section is amended to remove the requirement for a physical signature of one of the joint members on a paper ballot cast by mail. Section 4.1.18 (formerly section 4.1.19) – This section is amended to permit entities to sign proxies to permit a particular person to request either to cast an in-branch ballot, or to receive information and credentials to permit him or her to cast an electronic ballot, on behalf of the entity. Section 4.1.19 (formerly section 4.1.20) – This section is amended to give the Board the discretion in any given election year to permit members to cast a ballot by means other than the in-branch and electronic voting contemplated by the by-laws, and to remove a redundant statement of a voting period for these methods. Section 4.1.07(iv) – (iv) include an up-to-date passport-sized photo together with a current resume

• utlining qualifications, a personal history, and an affidavit, in the form prescribed

by the Board from time to time, swearing that the proposed nominee is not disqualified for election to the Board under the Act Section 6.01 – Appointment 6.01 The Board shall Appoint a Chair of the Board, a Vice Chair, a Corporate Secretary, and a President and Chief Executive Officer, and may Appoint, from time to time, such other officers as the Board may determine, and including one or more assistants to any of the officers so

• appointed. The Board may specify the duties of and, in accordance with these By-laws and

subject to the provisions of the Act, delegate to such officers powers to manage the business and affairs of the Credit Union. The Chair, and the Vice Chair and the Corporate Secretary must be

• directors. The President and Chief Executive Officer must be an employee, but any other officer

may but need not be a director, and one person may hold more than one office. All officers shall sign such contracts, documents, or instruments in writing as require their respective signatures. In the case of the absence or inability or refusal to act of any officer or for any other reason that the Board may deem sufficient, the Board may delegate all or any of the powers of such officer to any other officer or to any director for the time being.

Page 5 Section 6.04 – Corporate Secretary 6.04 The Corporate Secretary shall may but need not be a director, and shall give or cause to be given as and when instructed, all notices to members, shareholders, directors, officers, auditors and members of committees of the Board; he or she shall be the custodian of all books, papers, records, documents and instruments belonging to the Credit Union, except when some

• ther officer or agent has been appointed for that purpose; he or she shall ensure that the

records of the By-laws of the Credit Union and the minutes of meetings of the Board, the members, and the shareholders are kept up to date; and he or she shall have such other powers and duties as the Board may specify.

Resolutions

RESOLUTION # 1 WHEREAS the Board and membership of the Credit Union find it expedient, first, to adopt a calendar year-end; NOW THEREFORE BE IT ENACTED, and it is so enacted as a by-law of the Credit Union as follows: 1. By-Law No. 1 of the Credit Union, as most recently amended by confirmation of the members of the Credit Union on December 3rd, 2014 (the “General By-law”), be hereby further amended by deleting section 3.02 thereof and replacing it with the following: Financial Year 3.02 The financial year of the Credit Union shall end on December 31 of each calendar year. 2. In all other respects, except as otherwise amended during this meeting, the General By-law be hereby ratified and confirmed.

Page 6 RESOLUTION # 2 WHEREAS the Board and membership of the Credit Union find it expedient to provide that the Credit Union’s director election process be conducted in the Credit Union’s branches and electronically, rather than by mail, to reduce costs and increase efficiency; NOW THEREFORE BE IT ENACTED, and it is so enacted as a by-law of the Credit Union as follows: 1. By-law No. 1 of the Credit Union, as most recently amended by confirmation at this meeting of the membership (the “General By-law”), be hereby further amended by deleting Article Four Point One thereof, and replacing it with the following: ARTICLE FOUR POINT ONE DIRECTOR ELECTION Definitions 4.1.01 In this Article 4.1, the following terms shall have the following meanings: (a) “Ballot” shall mean a completed and verified Form of Ballot by means of which a member has indicated his/her vote on matters properly coming before a meeting of the members; (b) “Chair of the Elections Committee” shall mean the person appointed by the Board to preside over the election of directors. The Chair of the Elections Committee may not be a candi- date in the election for which he/she is the Chair of the Elections Committee, but he/she may be a member of the Board. It shall be the duty of the Chair of the Elections Committee to conduct the election in accordance with the provisions hereof and the policies and procedures adopted by the Board regarding elections. The Chair of the Elections Committee may appoint any persons required to assist him/her in so conducting the election; (c) “Elections Committee” shall mean the subcommittee of the Board authorized pursuant to Article Five hereof and called the Elections Committee; (d) “Form of Ballot” means a written or electronic form, or any other form of Ballot permitted by the exercise of Board discretion in section 4.1.19 of this By-law that, upon completion and verification, becomes a ballot; and (e) “Nomination Period” is the period of time defined in paragraph 4.1.04.

Page 7 Election and Term 4.1.02 (a) Election: Prior to every annual general meeting of the Credit Union, an election shall be held in accordance with the provisions of this Article 4.1. (b) Persons elected to the Board shall hold office for three years, or until their successors in

• ffice are elected or appointed.

Balloting 4.1.03 Balloting for election of directors shall take place as provided in sections 4.1.03 to 4.1.20 hereof. Notice of Nomination Period 4.1.04 The Board shall appoint a Chair of the Elections Committee at the board reorganization meeting after the Credit Union’s annual general meeting. The Chair of the Elections Committee shall give notice of the first day and the last day during which nominations for candidates for the election of directors will be received by the Chair of the Elections Committee or his/her nominee (which period is hereinafter called the “Nomination Period”), not later than forty-five (45) days before the fiscal year-end of the Credit Union, to each member of the Credit Union who, on the record date for notice, appears on the records of the Credit Union as a member in full compliance with the minimum membership shareholding requirement of section 2.03 hereof: (i) by posting a copy of the notice in each office of the Credit Union; (ii) by sending the notice by electronic mail to the latest electronic mail address of the member as shown on the records of the Credit Union (and, if the member has not provided an electronic mail address, by sending the notice by ordinary mail to the member’s Recorded Address); and (iii) by publishing the notice in newspapers that are circulated in all municipalities in which the Credit Union has offices.

Page 8 Form of Notice of Nomination Period 4.1.05 Notice of the nomination period shall include: (i) the date when nominations will first be received by the Chair of the Elections Committee; (ii) the last date and time when nominations will be received by the Chair of the Elections Committee; (iii) the qualifications required to be an eligible candidate for election; (iv) instructions that nominations shall be made by either prepaid ordinary mail or registered mail addressed to the Chair of the Elections Committee at any office of the Credit Union, or by personal delivery to any office of the Credit Union, and, in the event of an interruption of mail service, by personal delivery only to any office of the Credit Union; and (v) the number of directors to be elected. Qualifications for Nomination 4.1.06 A member is eligible for nomination if the member: (i) has complied fully with the minimum shareholding requirements of paragraph 2.03; (ii) meets the qualification requirements outlined in paragraph 4.02; and (iii) has been a member of the Credit Union and complied fully with the minimum shareholding requirements of paragraph 2.03 hereof for one year prior to the date

• n which his/her nomination is made.

Validity of Nominations 4.1.07 Nominations, to be valid, must: (i) be in the form prescribed by the Chair of the Elections Committee, which form may be obtained at any office of the Credit Union during the Nomination Period;

Page 9 (ii) be received by the Chair of the Elections Committee prior to the end of the Nomination Period. A nomination shall either be delivered personally to the Chair of the Elections Committee at any office of the Credit Union, or be mailed by prepaid

• rdinary mail or registered mail addressed to the Chair of the Elections Committee

at any office of the Credit Union; (iii) be signed by two members of the Credit Union who are eligible to vote at such election, and by the person nominated to signify his/her acceptance of the nomination, provided that the signatures of the two members are the original signatures of the members whose signatures they purport to be, and shall be verified against the Credit Union’s records; and (iv) include an up-to-date passport-sized photo together with a current resume outlining qualifications, a personal history, and an affidavit, in the form prescribed by the Board from time to time, swearing that the proposed nominee is not disqualified for election to the Board under the Act. The Elections Committee shall, by simple majority vote, render a decision on any questionable

• nominations. The Chair of the Elections Committee shall place the names of the persons so

nominated for the vacancies on the ballot. Accidental Omission - Nominations 4.1.08 Where notice of the Nomination Period is given in accordance with the provisions hereof: (i) the accidental omission to send such a notice to any member; (ii) the non-receipt of the said notice by any member; (iii) the receipt of any nomination after the end of the Nomination Period by the Chair of the Elections Committee; or (iv) the non-receipt of a nomination by the said Chair of the Elections Committee; shall not invalidate the election proceeding, and the Chair of the Elections Committee shall place the names of the persons nominated in accordance with the provisions hereof on the ballot according to their designated Region.

Page 10 Voting Process and Form of Ballot 4.1.09 Unless the Board of Directors exercises its discretion under section 4.1.19, voting in any election of directors shall take place only before the members’ meeting at which the result will be announced. For greater clarity, there shall be no voting at the meeting on any such election of

• directors. On all such elections, members shall be permitted to choose to cast their Ballots using

either of the following methods, but each member shall select only one of the following methods and cast only one Ballot: (i) in-branch voting at any branch or administrative office of the Credit Union, at the discretion of and in the manner prescribed by the Board; and (ii) electronic means, at the discretion of and in the manner prescribed by the Board. In the absence of any such exercise of discretion, the Corporate Secretary shall, not later than forty five (45) days following the last date of the Nomination Period, cause to be sent electronically to each member of the Credit Union who on that date appears on the records of the Credit Union as a voting member and who has provided to the Credit Union an electronic mail address, and otherwise sent by prepaid mail to the Recorded Address of such member, a communication containing: (i) the name and municipality of residence of each person declared by the Chair of the Elections Committee to be nominated for election to the Board; (ii) clear and precise instructions for voting, including that the member may vote by

• nly one of the permitted methods;

(iii) notification of the date (or dates) and time(s) during which voting in the election by electronic or in-branch means shall take place; (iv) notification of the place (or places) at which in-branch polling in the election shall take place, and the manner in which electronic Ballots may be cast; and (v) the conditions under which members will be eligible to vote in the election. Notice 4.1.10 The Corporate Secretary shall, in addition to the notice required by section 4.1.09, cause notice to be published in each office of the Credit Union, such notice to contain: (i) notice of the Annual Meeting of the members of the Credit Union;

Page 11 (ii) the name and municipality of residence of each of the persons declared by the Chair

• f the Elections Committee to be nominated for election to the Board; and

(iii) the procedure by which any member may cast a Ballot in that branch or, alternatively, may obtain the required information and credentials to cast a Ballot electronically. Verification 4.1.11 A Ballot verified as having been cast by the member or by his/her attorney authorized in writing shall be counted by the Credit Union’s scrutineers as a vote in any matter indicated by the ballot maker. Form of Ballot 4.1.12 Every Form of Ballot shall comply with this By-law and the regulations. It shall contain: (i) a list of the names, in alphabetical order, of the persons declared by the Chair of the Elections Committee to be nominated for election to the Board; (ii) instructions as to the number of persons for which the member may vote, and the method by which his/her selection should be signified and a notice that failure to vote for the specified number of candidates shall result in a spoiled ballot; and (iii) the period during which Ballots will be accepted by the Credit Union, which period shall last for at least eight (8) consecutive business days and shall end at least five (5) calendar days prior to the annual general meeting. Formal Validity 4.1.13 Ballots, to be valid must: (i) be on the printed or electronic form designated by the Chair of the Elections Committee; and (ii) be cast, in the case of ballots cast in a branch of the Credit Union, prior to the close

• f business of that branch, or, in the case of ballots cast electronically, no later than

11:59 p.m., on the last date for the receipt of ballots, as designated by the Chair of the Elections Committee and indicated on the Form of Ballot. The Elections Committee shall, by simple majority vote, render a decision on any questionable Ballot.

Page 12 Counting Procedure 4.1.14 The Chair of the Elections Committee shall appoint scrutineers who will: (i) have the skills required, and may, but need not be, members of the Credit Union; (ii) under the supervision of the Chair of the Elections Committee, verify all of the Ballots cast in the Credit Union’s various branches and the records produced of all Ballots cast electronically; (iii) place all verified paper Ballots in a sealed container; (iv) within three (3) business days following the last date for receipt of Ballots, under the supervision of the Chair of the Elections Committee, count all of the verified paper Ballots; and (v) provide the Chair of the Elections Committee with the final results of the balloting, which he/she shall announce to the membership at the annual meeting of the Credit Union. Tie Votes; Recounts 4.1.15 In the case of a tie vote resulting from the balloting, the eligible voting members at the annual meeting shall vote by ballot to break the tie, regardless of whether or not they had voted in the original balloting. If a candidate requests a recount of the Ballots, the Chair of the Elections Committee shall conduct a re-count of the paper Ballots, and the records produced of all Ballots cast electronically, only in the case of a tie vote, or when the number of votes separating a successful and an unsuccessful candidate is ten votes or less, and a reversal of the

• rder of finish of those candidates would change the result of the election.

Accidental Omission - Elections 4.1.16 Where an election of the members of the Board is held in accordance with the provisions hereof: (i) the accidental omission to send the communication referred to in paragraph 4.1.09 to any member;

Page 13 (ii) the inability of any member to cast a ballot in any branch of the Credit Union because the member attempts to cast that Ballot after business hours on the last date for receipt of such Ballots; (iii) the completion of any electronic Ballot after the last date and time for receipt by the Chair of the Elections Committee of such Ballots, such that the Ballot is rejected; or (iv) the non-receipt of any completed Ballot by the Chair of the Elections Committee; shall not invalidate the election, and the scrutineers shall count only those Ballots validly received by them prior to, and including, the last date and time for the receipt of Ballots. Joint Members 4.1.17 Where two or more persons hold the same share or shares jointly, they shall vote together as one on the share or shares jointly held by them, but, in the event that, with respect to the share or shares jointly held, only one Ballot is received by the Chair of the Elections Committee and the Ballot is verified as having been cast by one or more of the said persons, then the said Ballot shall be valid, provided that two or more persons jointly holding enough membership shares to entitle each of them to be a member in his/her own right may vote separately. Corporations, & etc. 4.1.18 A member of the Credit Union which is Her Majesty the Queen, a corporation, an unincorporated association, or a partnership shall provide to the Chair of the Elections Committee together with a request to cast a paper Ballot in any branch of the Credit Union or to receive the required information and credentials to cast a Ballot electronically, a written proxy signed by the President of other head officer or by the Vice-President or Secretary or Treasurer

• f such entity, which proxy shall authorize some one or more persons to cast the Ballot on its

behalf, and the person so appointed need not be a member of the Credit Union.

Page 14 Alternative Voting Processes 4.1.19 The Board shall have the discretion in any given election year to permit, by resolution, members to cast a Ballot by other means in the manner prescribed by the Board. Paragraph 4.1.14 shall apply to the counting procedure with respect to any ballots collected pursuant any such alternative voting process, with such modifications as are necessary to achieve the purpose of verifying the integrity of the voting process. Rules for Alternative Voting Processes 4.1.20 If the Board exercises its discretion under section 4.1.19, it may, by resolution, make additional rules governing the conditions that apply to a ballot cast by alternative means, provided that these and any other rules governing such votes are made available to the members together with the information required to be made available under sections 4.1.09 and 4.1.10. 2. In all other respects, except as otherwise amended during this meeting, the General By-law be hereby ratified and confirmed. RESOLUTION #3 WHEREAS the Board and membership of the Credit Union find it expedient to remove the requirement from its by-laws that nominees for election to the Board deliver an up-to-date passport-sized photograph of themselves as part of the nomination package; NOW THEREFORE BE IT ENACTED, and it is so enacted as a by-law of the Credit Union as follows: 1. By-law No. 1 of the Credit Union, as most recently amended by confirmation at this meeting of the membership (the “General By-law”), be hereby further amended by repealing section 4.1.07(iv) thereof, and replacing it with the following: (iv) include a current resume outlining qualifications, a personal history, and an affidavit, in the form prescribed by the Board from time to time, swearing that the proposed nominee is not disqualified for election to the Board under the Act. 2. In all other respects, , except as otherwise amended during this meeting, the General By-law be hereby ratified and confirmed.

Page 15 RESOLUTION #4 WHEREAS the Board and membership of the Credit Union find it expedient to remove the requirement from its by-laws that the Corporate Secretary be a director of the Credit Union: NOW THEREFORE BE IT ENACTED, and it is so enacted as a by-law of the Credit Union as follows: 1. By-law No. 1 of the Credit Union, as most recently amended by confirmation at this meeting of the membership (the “General By-law”), be hereby further amended by repealing section 6.01 thereof and replacing it with the following: Appointment 6.01 The Board shall Appoint a Chair of the Board, a Vice Chair, a Corporate Secretary, and a President and Chief Executive Officer, and may Appoint, from time to time, such other officers as the Board may determine, and including one or more assistants to any of the officers so

• appointed. The Board may specify the duties of and, in accordance with these By-laws and

subject to the provisions of the Act, delegate to such officers powers to manage the business and affairs of the Credit Union. The Chair and the Vice Chair must be directors. The President and Chief Executive Officer must be an employee, but any other officer may but need not be a director, and one person may hold more than one office. All officers shall sign such contracts, documents, or instruments in writing as require their respective signatures. In the case of the absence or inability or refusal to act of any officer or for any other reason that the Board may deem sufficient, the Board may delegate all or any of the powers of such officer to any other

• fficer or to any director for the time being.

2. The General By-law be hereby further amended by repealing section 6.04 thereof and replacing it with the following: Corporate Secretary 6.04 The Corporate Secretary may but need not be a director, and shall give or cause to be given as and when instructed, all notices to members, shareholders, directors, officers, auditors and members of committees of the Board; he or she shall be the custodian of all books, papers, records, documents and instruments belonging to the Credit Union, except when some other

• fficer or agent has been appointed for that purpose; he or she shall ensure that the records of

the By-laws of the Credit Union and the minutes of meetings of the Board, the members, and the shareholders are kept up to date; and he or she shall have such other powers and duties as the Board may specify. 3. In all other respects, except as otherwise amended during this meeting, the General By-law be hereby ratified and confirmed.