Guide to Shareholder Activism and Proxy Contests in Canada

or of committees of directors that contain disclosure of conflicts of interest by directors or officers of the corporation, during the usual business hours of the corporation. Additionally, anyone can request a copy of the shareholder list of such corporation upon payment of a reasonable fee and submission of a prescribed affidavit, which the corporation is required to provide within 10 days of such request. Under the CBCA and Canadian securities laws, the person requesting a shareholder list must refrain from using the shareholder list except in connection with (i) an effort to influence the voting of shareholders of the corporation, (ii) an offer to acquire securities of the corporation or (iii) any other matter relating to the affairs of the corporation. Under the CBCA, the corporation is required to provide a copy of its registered holder list as well as any holder of an option or right to acquire shares of the corporation. Under Canadian securities laws, the corporation is also required to provide a copy of the most recently prepared non-objecting beneficial owner list. These rights are considerably narrower than the right of a shareholder to inspect a corporation’s corporate records under Delaware General Corporation Law. Under that law, shareholders have the right to inspect the corporation’s books and records for a “proper purpose,” unless the shareholder is only seeking a shareholder list, in which case the burden is on the corporation to prove that a proper purpose does not exist. A proper purpose is one reasonably related to the shareholder’s interest as a shareholder. Although the scope of accessible documents might vary from state to state, it is considerably broader than the scope of documents available in Canada and generally includes the corporation’s governing documents, minutes from board meetings, minutes of shareholder meetings and records of other shareholder actions, shareholder lists and the corporation’s financial and accounting records. 12. Canadian Resident Director Requirements The CBCA, unlike most provincial statutes, prescribes Canadian residency requirements for the board of directors of a corporation. In contrast, Canadian stock exchanges like the TSX and the TSXV do not impose any such restrictions. Under the CBCA, a minimum of 25% of a CBCA corporation’s directors must be resident Canadians. Higher percentages are prescribed in certain cases. For instance, if a CBCA corporation operates in certain prescribed industry sectors — such as uranium mining, book publishing or sales, or film or video distribution — the majority of its directors must be resident Canadians. This higher threshold also applies to CBCA corporations that are subject to an act of Parliament mandating specific levels of Canadian ownership or control, or restricting the number of voting shares any single shareholder may hold. The CBCA defines a “resident Canadian” as (i) a Canadian citizen ordinarily resident in Canada, (ii) a Canadian citizen not ordinarily resident in Canada who is a member of prescribed class of persons, or (iii) a permanent resident ordinarily resident in Canada — excluding those who have resided in Canada for more than one year after becoming eligible for Canadian citizenship.