Shareholder communication is a crucial step in implementing strategic action plans, as well as an essential component of corporate governance. Press releases and legal documents publicize the important messages, but many shareholders require a more direct form of communication in order to attract their attention.

Northern Shareholder Services (“NSS”), a division of Northern Financial Corporation (“Northern”), acts as a proxy solicitation and information agent for the purposes of obtaining desired voter responses at annual and special shareholder meetings of public companies and where shareholder tenders are required. NSS acts for both issuers and shareholders, working with them to strategically structure their messages to maximize effectiveness. NSS then manages the distribution of this message by soliciting shareholders directly, encouraging them to vote for the resolutions proposed by the client being represented by NSS.

The difference between NSS and other firms in the solicitation market is that NSS offers seasoned investment banking, institutional sales and trading professionals, and merchant bankers to solicit shareholders for clients. Having someone who has been in the industry, has been involved with similar situations, and has existing relationships with many shareholders, will give your firm an extra advantage that can be critical in reaching a successful outcome. Another advantage you will find with NSS is cost; we offer the industry’s most competitive rates along with outstanding quality of service.

The services NSS offers clients for proxy solicitations include:

• Advice on solicitation strategy, with specific focus for each of the major institutional shareholders that could influence the outcome of a vote;
• Direct contact with shareholders, including both outgoing and incoming calls from retail and institutional shareholders;
• A detailed PowerPoint presentation presenting the client's message in a manner tailored to the client's shareholder base;
• Preparing presentations for major proxy advisory firms that may be providing an opinion on the resolutions of the meeting;
• Monitoring proxy responses on a daily basis.

An effective shareholder solicitation campaign can be instrumental in achieving objectives under each of the following scenarios:

Mergers and Acquisitions

In Canada, transactions structured as either an Amalgamation or Plan of Arrangement are required to have the transaction approved by two-thirds of the target company's shareholders; while in a take-over bid, shareholders of the target company are asked to tender their shares into the bid. The outcome of each of these scenarios can be positively influenced by an effective shareholder communication campaign. In addition, as a result of the Ontario Securities Commission's decision in the HudBay Minerals Case brought forward by Jaguar Financial Corporation, the acquiring firms in acquisitions are increasingly expected to seek shareholder approval when issuing equity. As a result, shareholder communication is more important now in Canadian mergers and acquisitions. Northern's team of experienced investment bankers, institutional sales and trading professionals, and merchant bankers can assist in effectively communicating the synergies and rationale of a transaction that will drive a positive response from shareholders.

Annual and Special Shareholder Meetings

Shareholders are developing an improved understanding of the importance of their voting power, partly contributed by more convenient voting methods (e.g. Internet voting) and partly because they are monitoring and instinctively responding to daily share values. However, many shareholders do not fully review the voting materials and, as a result, do not have a proper understanding of the issues at hand. This has led to issuers having difficulty passing special resolutions and, at times, also routine resolutions. NSS can assist in developing and leading the implementation of an effective communication strategy that will provide shareholders with the information they need to know before exercising their voting privileges.

Proxy Contests

Recently, shareholder activists, including hedge funds, merchant banks and other institutional investors, have become increasingly progressive in making their voices heard and pushing for corporate changes, resulting in many contested shareholder meetings. Miscommunication is often a source of the tension between shareholders and issuers for such contested meetings and is of particular concern when a dissident group emerges that also solicits shareholders with a competing message. NSS can act for issuers or dissidents in assisting shareholder to understand the core matters at hand in any proxy contest and provide them with the details they should know in order to make the right decision when submitting their proxies.

Northern has a long track record of handling its own proxy contests and take-over bids and on behalf of its related merchant bank, Jaguar Financial Corporation. Both companies have been active in creating shareholder value in public companies for several years. Northern's and Jaguar's recent merchant banking successes include:

• Successfully invoking the Ontario Securities Commission to force a shareholder vote of HudBay Minerals Inc. before allowing an ill-fated acquisition to be conducted, over $185 million in shareholder value created;
• Prompting a substantial issuer bid by High Desert Gold Corporation, over $4 million in shareholder value created;
• Facilitating a competing bidder to acquire Virtek Vision International Inc., over $5 million in shareholder value created;
• Prompting a competing bidder to acquire Century II Holdings Inc., over $46 million in shareholder value created.

Some of the skills that provide NSS with its competitive edge include Northern's in-depth knowledge of the market, Northern's familiarity with retail shareholders, the Northern institutional sales and trading team's existing relationships with institutional investors, and the years of experience that Northern and Jaguar have from their own solicitation campaigns through proxy battles and take-over bids. More importantly, NSS uses experienced investment banking professionals, an institutional sales and trading team, and merchant bankers to contact shareholders on behalf of clients. This allows clients to be certain their message is being articulated effectively, which is essential to achieving a desired outcome.