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 occur 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
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 of 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 of 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 3
Section 4.1.16 (formerly section 4.1.17) – This section is amended to provide that the accidental omission 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 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 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 4
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