Ok, let's take a big breath and start thinking a bit.
Since my name has been used quite a bit I though I should put in my 2 cents.
Disclaimer statement:
I am not an attorney and do not represent anybody. Readers should consider the following explanation only as my opinion and my own interpretation of rules and regulation. I have been wrong before and this time I could be wrong again .
A strategy of "let's fire all of them" and "let's replace them with our new team" is not a very good strategy for a bunch of shareholders that are justifiably upset with management. It can be done but only buy someone willing to finance it in a big way and take over the company. I will venture that a person willing to risk a lot of capital paying for legal fees and all associated expenses is not altruistic and will not do that just because they feel bad for some stockholders. They will want quite a bit more than a potential increase in share value.
I hope everybody realizes that a proxy fight is not a cheap undertaking both in time and money.
It takes a lot more than collecting a bunch of emails with some names and a number of shares on it to have a proxy fight.
First let's clear up a few things. IMO a Board of Director is not the management of a company. The management is the CEO, COO, CFO and other officers. You cannot fire the management team by a vote. Only the Board can fire the officers of the company.
If the Board wants to fire one or more Officers of the company the first thing the Board will do is to read the officers employment contract and consult an attorney to review the local labor laws. Employment contracts usually have separation packages and they are not small. Since none of us have any idea what they are let's not even discuss a wholesale firing of the management team at the present time. That comes later if needed at all and it includes a replacement plan. But just for fun, imagine that the all team is gone tomorrow morning including the CFO. Who will turn the light on, who will pay the bills, who has signature on the check book, who talks to the local authorities, who direct the company legal counsel etc. etc etc.
So let's keep the discussion as a Board change of one or more of the Board member.
A new Board member can be selected by the Board at any time to replace a departing Board member or fill a vacancy in the number of Board members authorized by the bylaws.
Board members reappointment and a bylaws change authorizing a new number of Board members can be done at the AGM. Usually the present Board makes a proposal for a Director slate and the shareholders vote on it.
A “shareholders concerned” letter proposing a competing slate of Directors can be filed with the Toronto exchange for the next AGM and if approved put to a vote at the AGM with the other slate . If you do not have a competing slate of Directors at the AGM the only thing a stockholders can do is vote no if they do not like the Directors. Since someone will vote yes the Directors are reelected.
If you have more Directors being proposed than the authorized number of Directors then the candidates with the most votes are in the others are out. As simple as that.
That document needs to be drafted by a Lawyer in accordance with applicable securities and corporate law requirements since it is a solicitation of proxies. The regulator will reject any filling that is not done properly and you never get to vote period. If anybody under estimate that part they are wrong.
Once you have done that and Toronto approves it a list of shareholders has to be acquired (at a cost) and mailing has to be done to all stockholders in a timely fashion prior to the AGM. (another cost)
The document mailed to stockholders will contain the list of people proposed as Directors as well as their background. Prior to sending the letter you will need a written statement by each proposed Board members that they are able (qualified in a legal sense) and willing to be nominated.
The first thing the potential Board members will ask is a copy of the Directors and Officers insurance. Nobody in their right mind would go on a Board without that for any company so it is even more important for a company in trouble.
Once all of that is done you will have to get the people to actually vote. They don’t always do it even when they tell you they will in an email.
The best way to secure the votes is to obtain a proxy vote document from each shareholders. The proxy has to be done in accordance with the Toronto exchange format and notarized to be valid.
I believe the proxies have to be presented in person at the AGM by the proxies beneficiary.
The present Board will fight it and will use company resources to put together a legal fight. The proxies holder needs to respond with its own legal resources.
The vote can only be done at the AGM.
If after all of that the slate of new shareholders is approved then the fun starts with the first meeting and who controls the check book of the company.
The AGM is a long time from now and so many things can change between now and then.
One way to do a complete Board change prior to the AGM would be to force a special shareholder meeting. I do not know what the procedure is but should be in the company bylaws.
What I want to point out is that this undertaking of a total Board change is a bit more complex than many people think.
There is an interim path for shareholders is to to select one or 2 potential Board member that are committed to respond to shareholders and put a descending vote in actions by the Board that are not in the best interest of the stockholders.
Remember that any Board member can put a motion for a vote and the vote is recorded. This becomes part of the record if a lawsuit is going against the Board.
One Board member can make a difference with a Board.
To elect a new Board member if a spot is open can be done immediately by the Board especially if the Board is under pressure from the stockholders.
Pressure can be applied to the Board in many different ways. A very subtle way is to remind them to read their D&O insurance.
A letter to the Board nominating one or two candidates signed by shareholders and listing their holdings and addressed to the present Board would greatly help.
If the number of shares is very large the Board will need to respond with a yes or no. Regardless of the answer that will shake the tree.
This may still require a legal review since there are some regulations on shareholders getting together. They exist in the US but I am not sure about Canada. Regardless, if the number is over 10% filling as to be done but it is relatively simple.
Good luck to all.
I have the feeling Tuesday will bring us some most needed news.
