Insurance Companies Act — I-11.8 176
Cumulative voting 176 (1) Where this Act or the by-laws provide for cumulative voting, (a) there shall be a stated number determined by by-law, and not a minimum and maximum number, of directors, in the case of a company that has no policyholders who are entitled to vote at an annual meeting of shareholders and policyholders, or of shareholders’ directors, in the case of a company that has such policyholders; (b) each shareholder entitled to vote at an election of directors to be elected by cumulative voting has the right to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected by cumulative voting, and the shareholder may cast all such votes in favour of one candidate or distribute them among the candidates in any manner; (c) a separate vote shall be taken with respect to each candidate nominated for a position that is to be filled by cumulative voting unless a resolution is passed unanimously permitting two or more persons to be elected by a single vote; (d) if a shareholder has voted for more than one candidate without specifying the distribution of the votes among the candidates, the shareholder is deemed to have distributed the votes equally among the candidates for whom the shareholder voted; (e) if the number of candidates nominated exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled; (f) each director elected by cumulative voting ceases to hold office at the close of the next annual meeting of shareholders and policyholders following the director’s election; (g) a director elected by cumulative voting 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 to be elected by cumulative voting and the number of votes cast against the motion; and (h) the number of directors required by the by-laws to be elected by cumulative voting 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 to be elected by cumulative voting and the number of votes cast against the motion. Mandatory cumulative voting (2) Where the aggregate of the voting shares beneficially owned by a person and any entities controlled by the person carries more than 10 per cent of the voting rights attached to all the outstanding voting shares of a company, the directors to be elected by shareholders shall be elected by cumulative voting. Exception (3) Subsection (2) does not apply where all the voting shares of the company that are outstanding, other than directors’ qualifying shares, if any, are beneficially owned by (a) one person; (b) one person and one or more entities controlled by that person; or (c) one or more entities controlled by the same person. Exception (3.1) Subsection (2) does not apply to a converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies. Transitional election (4) Where this Act or the by-laws of a company provide for cumulative voting, the shareholders of the company shall, (a) at the first annual meeting of shareholders and policyholders held not earlier than ninety days following the date that cumulative voting is required under subsection (2) or provided for in the by-laws, and (b) at each succeeding annual meeting, elect the stated number of directors to hold office until the close of the next annual meeting of shareholders and policyholders following their election. Class or series of shares (5) Nothing in this Act precludes the holders of any class or series of shares of a company from having an exclusive right to elect one or more directors. 1991, c. 47, s. 176; 1996, c. 6