Noront Resources

The right of a shareholder to appoint a proxy (the proxyholder) to attend and vote at meetings on his or her

behalf is a statutory right. It does not exist at common law and yet, subject to the statutory requirements, it

is governed by the common law of agency.

Moreover, the categories of solicited and unsolicited proxies directly affect the application of agency

principles to the proxy process. The principal policy objective of the proxy system is to ensure that, as

much as practicable, shareholders are provided with sufficiently detailed, accurate information, in the form

of the management information circular, upon which to make a reasoned decision and to be given a form

of proxy which preserves the shareholder’s freedom to support or reject the propositions advanced by

management in the circular. Solicited proxies are those obtained on request (the “solicitation”) by

management or by a dissident group. The completed proxy will usually be in the form provided by the

soliciting party. The shareholder does not give an “unsolicited proxy” in response to any solicitation. It

simply represents the shareholder’s exercise of his or her right to appoint someone to attend and vote on

his or her behalf at the meeting. The corporation cannot purport to prescribe the form to be used by a

shareholder wishing to appoint a proxy, although it may require proxies to be deposited by a prescribed

time, not less than 48 hours prior to the meeting.

Among the many important reforms to the Canadian proxy system recommended by the Kimber Report

was the recommendation that solicited proxies provide shareholders with a choice to vote “for” or “against”

each specific proposition, the so-called “two-way proxy”. That recommendation is today reflected in

Canadian corporate proxy rules such that any person soliciting proxies, be it on behalf of management or

a dissident group, is required to provide shareholders with the alternative to support or reject the

proposition(s) for which the proxies are being solicited.

A glaring example of a management solicitation in which that choice was effectively denied is found in