March 2012

This post was contributed by Jean R. Allard, Partner, Norton Rose Canada

In a recent Quebec Court of Appeal decision,[1] the court reversed a decision of all previous courts in a case regarding unfair termination for refusal to sign a non-compete agreement three years after the hiring date.

In this case, the employer, a pharmaceutical company, had recruited a chemist who lived in France.

The offer to the employee said he’d be asked to sign a non-compete agreement and a confidentiality agreement. However—and unfortunately for the employer—, only the confidentiality agreement was signed on the employee’s first day of work.

A few years later, after promoting the employee to director, the employer asked the employee to sign a non-compete agreement. The employee decided he wouldn’t sign the agreement unless the employer compensated him with a large sum of money and respected his demands on the duration of and territory covered by the non-compete clause.

This post was contributed by Walied Soliman, Partner, Norton Rose Canada, and Evelyn Li, Associate, Norton Rose Canada

A scan of recent business headlines suggests shareholder activism continues to rise, and even the who’s who of deep-rooted Canadian businesses are not immune.

While preparing for the upcoming proxy season, whether or not your company is at risk for a proxy contest, it might be a good idea to consider adopting certain pre-emptive defensive tactics, including a by-law to provide advance notice for nomination of directors as recently proposed by Arius3D Corp.

Proxy fights

Dissidents in a proxy contest typically look to gain board control by replacing directors with nominees whose strategy reflects that of the dissidents. Dissidents can propose their own nominees by:

  • requisitioning a meeting of shareholders to remove incumbent directors and elect the dissidents’ nominees;
  • preparing a shareholder proposal to the company within the prescribed timeline before a shareholders’ meeting, for inclusion in the management information circular;
  • soliciting proxies for the dissidents’ nominees before a meeting of shareholders; or
  • ambushing from the floor (i.e., during the motion to elect management’s nominees as directors) at a meeting of shareholders.

For your company, an ambush is the worst-case scenario as you would have no advance warning and no chance to prepare a defence.  Other shareholders and proxyholders (i.e., the non-dissidents) would also learn of the dissidents’ proposal and nominees at the time of the ambush, just before voting for the election of directors.

As shown by attendance at the African Ministers Roundtable held by Norton Rose Canada on March 6, 2012, as part of the PDAC Conference, interest in Africa as a mining destination remains high.

At the roundtable, government representatives from Ethiopia…

This post was contributed by Paul Whitelock, Partner, Norton Rose LLP

September 2011 saw the most significant overhaul in many years of the UK takeover regime.

Changes to the UK Takeover Code followed a year-long review into how takeovers…

UPDATE:  The Merger Register went live on March 9, 2012.

The Competition Bureau will, at “the beginning of March”, start publishing a “Merger Register” on its website that will disclose certain information about transactions that are subject to the pre-merger notification obligations contained in the Competition Act.  Designed to increase the level of transparency at the Bureau, the Merger Register is not without controversy.  Divulging such information is a marked departure in practice, as the Bureau has traditionally felt constrained by the confidentiality restrictions in the Competition Act.

The Bureau announced on February 6, 2012 that any merger review completed after February 1, 2012  will be included in the Merger Register, so long as the parties have either submitted a pre-merger notification or sought an advance ruling certificate in respect of the transaction.  In essence, every merger transaction reviewed by the Bureau – other than a non-notifiable transaction reviewed on the initiative of the Bureau – will be captured by the Merger Register.

Inclusion in the Merger Register will mean the following information will be disclosed:

  • the names of the parties;
  • the industry involved (the NAICS code); and
  • the outcome of the review.

Confidentiality Concerns

Concerns have been raised that disclosing this information contravenes the strict confidentiality provisions found in the Competition Act.  However, the Competition Bureau considers that publishing the Merger Register falls within one of the exceptions to the provisions, which permits disclosure “for the purposes of the administration or enforcement” of the statute.