In Canada, a universal proxy was first used successfully in Pershing Square’s 2012 proxy contest for Canadian Pacific Railway. 18 In that contest, both sides ended up using universal proxy cards — management doing so pre- emptively, presumably so that its card would not be viewed as less flexible than Pershing Square’s. Similarly, in JANA Partners’ battle with Agrium in 2013, JANA used a quasi-universal proxy, in which it offered shareholders the choice of voting among seven incumbents that JANA would accept, plus five of JANA’s nominees on its proxy card. This contrasted with Agrium, which listed only the 12 management incumbents on its card. In the years since those contests, universal proxy cards have been used with some frequency in contests involving larger cap companies, including the 2014 proxy contest for Americas Gold and Silver Corporation, the 2017 proxy contest for Granite Real Estate Investment Trust, the 2018 proxy contest for DavidsTea Inc. and the 2019 proxy contests for Methanex Corporation and Knight Therapeutics Inc., to name a few. In contrast, amendments to the U.S. proxy rules, which came into effect on August 31, 2022, now require the use of universal proxy cards by both management and dissident shareholders for all shareholder meetings involving contested director elections. In addition, the U.S. proxy rules provide for certain advance notice requirements, dissident proxy statement filing deadlines and mandatory solicitation requirements. Although most cross-listed Canadian companies are not subject to the new U.S. proxy rules because they qualify as “foreign private issuers” under SEC rules, Canadian companies that qualify as “U.S. domestic issuers” under SEC rules are required to comply. For companies and shareholders operating in this scenario, we would observe that typical Canadian advance notice bylaws do not mesh well with the new U.S. proxy rules. For example, a nominating shareholder that submits its notice of nomination within the 30-day minimum notice period prescribed by the bylaws may nevertheless be in breach of the U.S. proxy rules, which require the notice of nomination to be submitted no later than 60 days prior to the anniversary date of the company’s previous year’s annual meeting. 11. Requests for Corporate Records The ability of a shareholder to inspect a corporation’s corporate records is limited in Canada in comparison to the right of shareholders of U.S. corporations. Accordingly, U.S.-style “books and records requests” are not a useful tool for activists in Canada. In Canada, the right of a shareholder to inspect a corporation’s corporate records is governed by the corporation’s governing statute (for example, the CBCA in the case of a federally incorporated corporation). Anyone may request copies of the articles and bylaws of a public company incorporated under the CBCA and may examine the minutes of shareholder meetings and notices of change of directors, during the usual business hours of the corporation. Although shareholders are generally not entitled to request board meeting minutes, under the CBCA, they are entitled to examine the portions of any minutes of meetings of directors
18 T he dissidents in Biovail Corporation’s 2008 proxy contest also used a form of universal proxy, but were unsuccessful in that campaign.
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