New HEO Governance Update to HEO and HEO

New HEO Governance Update to HEO and HEO Minor Members May 2020

The first 75 days. • HEO Governance project kicked off March 7, 2020 in conjunction with Hockey Canada • Established a HEO Governance Committee • Drafted a By. Law • Researched amalgamation processes • Developed a timeline leading to new Branch governance prior to the 202021 season • Received support and agreement-in-principle from Hockey Canada • Conducted Round One discussions with Branch Members • 16 Zoom meetings, >100 attendees 2

What did we hear in Round One discussions? • The Zoom sessions with Members generated excellent feedback, with four recurring themes emerging. • • Finance U 15 AAA Junior Hockey Collaboration U 18 AAA • In addition, Members were interested in learning more about amalgamation of the two entities. 3

What’s happening with the money? • Members asked several questions about fees, financial reporting and transparency. • HEO Governance Committee has set a public expectation that the new HEO Board will conduct a thorough review of the financial status of the new corporation and report back to membership, within 90 days. The review will include: • • • Budgets Assessment of reserve funds Mandatory expenditures Assessment of participant fees Identification of efficiency gains • A financial review was not part of the Governance Committee’s mandate; nevertheless, the Committee believes it is fair to expect that efficiency gains exist and should be reviewed to determine impacts for members. 4

What is happening to U 15 AAA (HEO Minor AAA League)? • Members expressed concern that streamlining of voting will result in U 15 AAA Associations and the League losing their ability to voice concerns regarding policies and programs affecting them. • Today, U 15 AAA entities are members of Districts and Councils • U 15 AAA Associations are members of Districts and can have their views heard at District Councils • U 15 AAA League President attends Minor Council • HEO Governance Committee recognizes that unresolved differences of opinion exist on the status and future of AAA hockey. • Therefore, the Governance Committee strongly recommends that the new HEO Board strike a Task Team to listen to views on how AAA hockey in the Branch can be improved and strengthened. • The Committee also recommends that the Task Team seek views on how the two AAA programs can work better together, find common areas of interest and continue to improve the programs. 5

Could we have a forum for Junior collaboration? • As part of the evolution of HEO Governance, Junior Council as an ongoing committee will no longer exist. • It will be dissolved as it has outgrown its original mandate. • A new forum will be established, providing an opportunity for Junior Leagues and teams to communicate, collaborate and problem solve. It is proposed that this new forum: • Be called the Junior Committee. • Function as a program committee under the new HEO governance. • Include League presidents, commissioners, the Jr C Vice-president, a HEO Board liaison, and HEO staff. • Have the Chair rotate amongst the three Junior League presidents. 6

What is the new U 18 AAA District? • The HEO Governance Committee has proposed a significant change for oversight of U 18 AAA hockey. • A new District 14 will be created, housing the 12 Club teams as members (residential school teams remain part of their existing Districts). • The new District will cast two (2) votes when required, given its reduced program scope, in comparison with eight (8) votes by each of the ten other Districts. • A District Chair will be appointed by Board of Governors and his/her responsibilities will include: • • • Will attend Minor Council and the Board of Governors Residency transfer processing (with support from HEO and the AAA League Registrar) Discipline and Risk/Safety Tournament sanctions Affiliations • The Board of Governors will continue to exist, serving as a Divisional Committee in the new governance structure. The U 18 AAA District Chair will join the Board of Governors. • The U 18 AAA League president will continue to attend Minor Council, and will be a resource to the Board of Governors. • The U 18 AAA League will continue to establish the League and team budgets, with oversight and approval from the Board of Governors. • The Board of Governors is revising and updating the League Constitution and By. Laws to reflect these changes. 7

What does the Act tell us about amalgamations? • The Corporations Act of Ontario states: • 113(1) Any two or more companies, including a holding and subsidiary company, having the same or similar objects may amalgamate and continue as one company. R. S. ). 1990, c. C. 38, s. 113(1). • (2) The companies proposing to amalgamate may enter into an agreement for the amalgamation prescribing the terms and conditions of the amalgamation, the mode of carrying the amalgamation into effect and stating the name of the amalgamated company, the names and address for service of each of the first directors of the company and how and when the subsequent directors are to be elected with such other details as may be necessary to perfect the amalgamation and to provide for the subsequent management and working of the amalgamated company, the authorized capital of the amalgamated company and the manner of converting the authorized capital of each of the companies into that of the amalgamated company. R. S. O. 1990, c. C. 38, s. 113(2); 2001, c. 9, Sched. D, s. 5(4). 8

How will HEO and HEO Minor amalgamate? • An amalgamation agreement is currently under development and will include the specifics as identified in the previous slide. • One requirement is to identify the “first directors”. • These “first directors” provide transitional support for the company between the start up date of the new corporation and the date of elections of Directors by the Members. • For our process this would mean the period between July 31 (date the new Corporation comes into effect) and August 22 (date of elections of Directors by Members). • It is proposed that the members of the HEO Governance Committee (with the exception of those who have conflicts of interest as defined by the new By. Law) will serve as “first directors”. 9

How will the new Agreement be approved? • HEO and HEO Minor will present amalgamation motions to their respective Members and request their approval to adopt the new structure. • The motions will provide the Amalgamation Agreement documents. • Members in each class (Directors, Junior and Minor) will need to vote with two-thirds in favour for the motion to be successful. • Reference: Adoption by Shareholders: (3) the agreement shall be submitted to the shareholders of each of the amalgamating companies at general meetings thereof called for the purpose of considering the agreement, and, if two-thirds of the votes cast at each such meeting are in favour of the adoption of the agreement, that fact shall be certified upon the agreement by the secretary of each of the amalgamation companies. R. S. O. 1990, c. C. 38, s. 113(3); 1998, c. 18, Sched. E, s. 64. 10

What have the lawyers advised us regarding the By. Law and Articles of Amalgamation? • Non-voting members, under certain circumstances, do vote • These circumstances, prescribed by the proposed Ontario Not-For-Profit Corporations Act, include such things as changes to the name of the organization, changes to its mandate, but does not include changes to its current By. Laws. • Life Members will now become Life Patrons. Although no longer recognized as a class under the new HEO By. Law, they will be recognized and encouraged to participate in key Branch events, similarly as Hockey Canada’s Life Patrons. • Removal of elected Directors by ordinary resolution as opposed to special resolution • This aligns with provisions of the Act. • Minor clarifications; for example, the definition of a District, and how the emergency meeting provision is to be used by the Board. • HEO/HEO Minor Boards of Directors can terminate the Amalgamation Agreement without cause or reason at anytime before the endorsement of the Certificate of Amalgamation, notwithstanding Members approval. 11

How will year-end audits be conducted? • HEO and HEO Minor are required to conduct annual audits, generally based on their fiscal years (May 1 st to April 30 th) of the two corporations. • The new HEO corporation’s start date will be August 1; therefore, an audit for the period between May 1 and July 31 will be required for each corporation. • There are two options: • HEO and HEO Minor could conduct a 12 month and then a 3 month audit • Either or both of the HEO and HEO Minor Boards could pass a resolution to extend the current audit period to 15 months. • Note: Audit periods are normally 12 months. To accommodate a start date for the new HEO corporation of August 1, 2020, the 2019 -20 audit period could be May 1 -April 30 or May 1 -July 31. The 2020 -21 audit period would be May 1 -July 31, 2020 plus August 1, 2020 -April 30, 2021 OR August 1, 2020 -April 30, 2021, depending on whether the 2019 -20 audit period is extended from 12 to 15 months. 12

What’s next? • The HEO Governance Committee has sent out the draft By. Law to members, and is sharing more information following on Round One questions. • Round Two discussions are being offered to Members. • By June 17, Members will receive the following: • Final version of proposed By. Law • Articles of Amalgamation • Voting ballots (one from HEO Minor re amalgamation; one from HEO re amalgamation, including the new By. Law) • Voting instructions • A notice of (two) meeting(s) of Members to take place on July 11. • Should Members support the motion, elections of new Board Directors will take place on August 22. 13

Annex I: HEO Governance – Updated Timeline of Key Dates Notice to Members for HEO & HEOM Meeting of Members April 27 June 1 Communications to Members – Round 1 June 17 HEO & HEOM Members Meetings July 11 Outcome of Votes Provided by Kelly Santini & Communicated to Members. Call for Nominations for Elections July 23 July 24 Close of Nominations July 31 Notice of Candidates to Members Elections August 7 August 22 Communications to Members – Round 2 We are here 14