Form 51-102F3 Material Change Report Item 1 Name and Address of Company Fédération des caisses Desjardins du Québec (Federation) 1 Complexe Desjardins 40 th floor, South Tower Montréal, Québec H5B 1B2 Caisse centrale Desjardins (CCD) 1170 Peel Street, Suite 600 Montréal, Québec H3B 0B1 Item 2 Date of Material Change October 27, 2016 Item 3 News Release On October 27, 2016, Desjardins Group issued a news release announcing the material change through CNW in Canada. The news release is attached to this Report as Appendix A. Item 4 Summary of Material Change On October 27, 2016, the boards of directors of the Federation and CCD convened a special meeting of their members on November 28, 2016 to submit to them the proposal to amalgamate the Federation with CCD by absorption of CCD. Each of the special meetings will be called to approve the amalgamation by adopting an amalgamation by-law with a 2/3 majority of the votes cast. In the event that such amalgamation by-laws are adopted, the amalgamation would become effective shortly after obtaining the necessary regulatory approvals, particularly from the Autorité des marchés financiers. The directors and management of the Federation and CCD expect the amalgamation to be effective on January 1, 2017. From the date of amalgamation, CCD will continue its existence within the Federation, which will remain liable for all of the obligations of CCD. The directors and management of the Federation and CCD believe that no downgrade or withdrawal of the credit ratings of CCD and its issuance programs will result from the amalgamation. Item 5 Full Description of Material Change 5.1 Full Description of Material Change The effects of the amalgamation by absorption of the Federation, as the absorbing federation, with CCD, as the absorbed financial services cooperative, are set forth in the Act respecting financial services cooperatives and the Act respecting the Mouvement Desjardins (collectively, the Act).
From the date of amalgamation, CCD will continue its existence within the Federation, which will be the amalgamated federation, and their patrimonies will form a single patrimony, that of the Federation. The Federation will enjoy all of the rights and be liable for all of the obligations of CCD, in addition to the Federation s own rights and obligations. The Federation will also have the capacity and powers devolved to CCD pursuant to the Act. The amalgamation will not result in any interruption of CCD s activities, which will be wholly continued by the Federation. Furthermore, the Federation will become the issuer under debt issuance programs for CCD s securities and will honour any security issued by CCD. The Federation will also be CCD s successor in dealings with clearing houses and payment associations. The directors and management of the Federation and CCD anticipate the amalgamation will have no material adverse impact on the activities of the Federation or CCD. The directors and officers of the Federation will remain directors and officers of the amalgamated federation. Forward-looking statements This Material Change Report and Appendix A hereto may contain forward-looking statements. Such statements are typically identified by future and conditional verbs, words such as expect, may and other words and expressions of similar import. Forward-looking statements, by their very nature, are subject to inherent risks and uncertainties that may be general or specific and are based on assumptions that may give rise to the possibility that actual results or events could differ materially from expectations expressed in or implied by such forward-looking statements. Forward-looking statements contained in this material change report and Appendix A hereto may include, but are not limited to, those with respect to the anticipated benefits relating to the amalgamation project, as well as the effective date of amalgamation. It is important to note that the above list of factors that could influence future results is not exhaustive and other factors could adversely affect results. Desjardins Group cautions readers against placing undue reliance on forward-looking statements when making decisions. Desjardins Group does not undertake to update any forward-looking statements that may be made herein, except as required under applicable law. This Material Change Report and Appendix A hereto are not an offer to sell or a solicitation of an offer to buy any securities of Desjardins Group. 5.2 Disclosure for restructuring transactions Item 6 Reliance on Subsection 7.1(2) of Regulation 51-102 - 2 -
Item 7 Omitted Information Item 8 Executive Officer For further information, contact Mr. Renaud Coulombe, General Counsel, Desjardins Group, at 514 281-7000, ext. 5558551. Item 9 Date of Report October 27, 2016 Appendix A The news release. - 3 -
PRESS RELEASE PRDG1653 The boards of directors of the Fédération des caisses Desjardins du Québec and Caisse centrale Desjardins call special meetings for the amalgamation of these two entities Lévis (Qc), October 27, 2016 The boards of directors of the Fédération des caisses Desjardins du Québec and Caisse centrale Desjardins decided today to convene special general meetings on November 28 to submit to their members a proposal to amalgamate Caisse centrale with the Federation. Each of the meetings will be called to adopt an amalgamation by-law with a two-thirds majority of the votes cast. If the proposal is adopted, the directors and management of the Federation and Caisse centrale expect the amalgamation to become effective January 1, 2017, subject to obtaining the necessary regulatory approvals, in particular the approval by the Autorité des marchés financiers. The structure of Desjardins Group has evolved over time, and changes in the Federation s activities have gradually eliminated the advantages, particularly with regard to efficiency and economies of scale, justifying the creation and maintenance of Caisse centrale as a separate treasurer. With this amalgamation, all of the activities related to the issuance of securities of Desjardins Group will be combined under a single issuer, resulting in a significant reduction in efforts relating to financial disclosures. The project is consistent with the anticipated revision of the Act Respecting Financial Services Cooperatives, which aims, among other things, to strengthen the financial solidarity within Desjardins Group. The combination of the Federation and Caisse centrale activities and balance sheets under a single entity will contribute to make the cooperative more integrated and simplified for its members, clients, investors and partners. From the date of amalgamation, Caisse centrale will continue its existence within the Federation, which will: Enjoy all of the rights and be liable for all of the obligations of Caisse centrale, in addition to its own rights and obligations; Have the capacity and powers devolved to Caisse centrale pursuant to the Act; Become the issuer under Caisse centrale s debt issuance programs and honour any security issued; Be Caisse centrale s successor in dealings with clearing houses and payment associations; and Continue the Caisse centrale activities without interruption. The directors and management of the Federation and Caisse centrale believe that no downgrade or withdrawal of the credit ratings of Caisse centrale and its issuance programs will result from the amalgamation. In short, they anticipate the amalgamation will have no material adverse impact on the activities of these two entities. For these reasons, the directors and management believe the amalgamation to be in the best interest of the amalgamating entities, and of Desjardins Group as a whole. The boards of directors of the two entities therefore recommend that delegates of their members vote in favour of the amalgamation project. 1
Retirement of the General Manager of Caisse centrale The General Manager of Caisse centrale, L.-Daniel Gauvin, has announced his decision to take on new challenges and retire from Desjardins Group after a career that has spanned over 20 years with the cooperative financial group. The management of Desjardins Group acknowledges his expertise in financial market dynamics and risk management, and applauds his tireless promotion of Desjardins on the Canadian and international financial stages. Mr. Gauvin plans to leave his position as of the amalgamation date. About Desjardins Group Desjardins Group is the leading cooperative financial group in Canada and the sixth largest cooperative financial group in the world, with assets of more than $260 billion. It has been rated one of the Best Employers in Canada by Aon Hewitt. To meet the diverse needs of its members and clients, Desjardins offers a full range of products and services to individuals and businesses through its extensive distribution network, online platforms and subsidiaries across Canada. Counted among the world s strongest banks according to The Banker magazine, Desjardins has one of the highest capital ratios and credit ratings in the industry. Information (for journalists only): Valérie Lamarre Public Relations 514-281-7275 or 1-866-866-7000, ext. 5557275 media@desjardins.com Caution concerning forward-looking statements -30- Certain statements made in this press release may be forward-looking. By their very nature, forward-looking statements involve assumptions, uncertainties and inherent risks, both general and specific. It is therefore possible that, due to a number of factors, the predictions, projections or other forward-looking statements as well as Desjardins Group s objectives and priorities may not materialize or may prove to be inaccurate and that actual results differ materially. Various factors that are beyond Desjardins Group s control, and therefore whose impacts on Desjardins Group are difficult to predict, could influence the accuracy of the forward-looking statements in this press release. Although Desjardins Group believes that the expectations expressed in these forward-looking statements are reasonable, it can give no assurance or guarantee that these expectations will prove to be correct. Desjardins Group cautions readers against placing undue reliance on forward-looking statements when making decisions. Desjardins Group does not undertake to update any written or verbal forward-looking statements that could be made from time to time by or on behalf of Desjardins Group, except as required under applicable securities legislation. 2