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  • Disclosure Statement

    CLASS C VOLUNTARY EQUITY SHARES

    June 2014

  • 2

    East Kootenay Community Credit Union (The "Credit Union")

    924 Baker Street Cranbrook, BC

    V1C 1A5

    Class C Voluntary Equity Shares

    Class C Voluntary Equity Shares are $1 par value Equity Shares of the Credit Union, issuable pursuant to its Rules.

    Rights relating to dividends, redemptions and transfers of the Class C Voluntary Equity Shares are subject to various preconditions referred to in this Disclosure Statement.

    The Class C Voluntary Equity Shares are not currently tradable on any stock exchange or similar market and no such market is anticipated.

    Fractional share purchases are not permitted under the current legislation.

    Dividends declared and paid from Class C Voluntary Equity Shares are treated as interest income for income tax purposes. As such, they are not eligible for the dividend tax credit.

    Class C Voluntary Equity Shares are not guaranteed by the Credit Union Deposit Insurance Corporation of British Columbia.

    Neither the Superintendent of Financial Institutions nor any other authority of the Government of the Province of British Columbia has in any way passed on the merits of the matters dealt with in this Disclosure Statement.

    The information contained in this Disclosure Statement has been reviewed and is hereby certified by the Board of Directors of East Kootenay Community Credit Union to constitute full, true and plain disclosure of all material facts relating to the shares offered by this Disclosure Statement as required by the Credit Union Incorporation Act (British Columbia) and its Regulations and the Rules of East Kootenay Community Credit Union (EKC). Certified this May 22nd, 2014 on behalf of the Board of Directors Signed "Jody E. Burk" Signed "Don Holt"

    Jody E. Burk Don Holt Chief Executive Officer Board Chair

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    Table of Contents

    DEFINITIONS .................................................................................................................................................. 4 DESCRIPTION OF CLASS C VOLUNTARY EQUITY SHARES ........................................................................... 5

    A. Par Value .............................................................................................................................................. 5 B. Voting Rights ......................................................................................................................................... 5 C. Dividend Rights ..................................................................................................................................... 5 D. Redemption Provisions ........................................................................................................................ 6 E. Liquidation and Distribution Rights ...................................................................................................... 6 F. Conversion ............................................................................................................................................ 6 G. Class C Voluntary Equity Shares and Withdrawal Rights ................................................................. 6 H. Sinking Fund Provisions ........................................................................................................................ 7 I. Modifications, Amendments or Variation of Rights or Provisions ........................................................ 7

    PLAN OF DISTRIBUTION ................................................................................................................................ 7 USE OF PROCEEDS ......................................................................................................................................... 8 TAX CONSEQUENCES .................................................................................................................................... 8 MARKET FOR SHARES .................................................................................................................................... 8 CAPITAL STRUCTURE ..................................................................................................................................... 9

    Class A Membership Equity Shares ....................................................................................................... 9 Class B Transaction Equity Shares ......................................................................................................... 9 Class C Voluntary Equity Shares ............................................................................................................ 9

    REGISTRAR AND TRANSFER AGENT ............................................................................................................ 10 OPTIONS TO PURCHASE SHARES ................................................................................................................ 10 SUBSIDIARIES OF CREDIT UNION ................................................................................................................ 10 DESCRIPTION OF BUSINESS ......................................................................................................................... 10 DEVELOPMENTS .......................................................................................................................................... 11 FIVEYEAR FINANCIAL SUMMARY ............................................................................................................... 13 CONSOLIDATED BALANCE SHEETS .............................................................................................................. 13 VARIATIONS IN OPERATING RESULTS ......................................................................................................... 14 KEY RATIOS .................................................................................................................................................. 16 DIVIDEND RECORD ...................................................................................................................................... 17 RISK FACTORS .............................................................................................................................................. 18

    A. General Risks ...................................................................................................................................... 18 B. Business Risks ..................................................................................................................................... 18

    1. Credit Risks ..................................................................................................................................... 18 2. Investment Risks............................................................................................................................. 19 3. Liquidity Risks ................................................................................................................................. 19 4. Interest Rate Risks .......................................................................................................................... 19 5. Currency Risks ................................................................................................................................ 20

    EAST KOOTENAY COMMUNITY CREDIT UNION BRANCH OFFICES ............................................................. 20 SUBSIDIARY BRANCH OFFICES .................................................................................................................... 20 DIRECTORS AND SENIOR OFFICERS ............................................................................................................. 21

    Directors ................................................................................................................................................. 21 Senior Officers ........................................................................................................................................ 21

    COMMITTEES OF THE BOARD OF DIRECTORS ............................................................................................ 21 AUDITOR AND FINANCIAL STATEMENTS .................................................................................................... 21 Asset/Liability Management Consultant ..................................................................................................... 21 OTHER MATERIAL FACTS ............................................................................................................................. 22 FURTHER INFORMATION ............................................................................................................................ 22

  • 4

    Definitions

    "the Board" Directors of East Kootenay Community Credit Union. "Class C Voluntary Equity Shares" Classes of Equity Shares set out in Credit Union rule 2.3. "the Act" The Credit Union Incorporation Act. "Credit Union" East Kootenay Community Credit Union (EKC). "Equity Shares" All classes of shares of the Credit Union which entitle the

    holders to a share of the residual property and assets of the Credit Union in the event of dissolution, wind-up or other distribution of assets.

    "cumulative dividends" Dividends not declared for one fiscal year are carried

    forward or added to the dividend of a following year. "policy" A policy of the Credit Union as established by the Board.

    Policies are reviewed regularly and may be rescinded or changed at any time, subject to the Rules.

    "member" One individual who owns Membership Shares. "the Regul