"Placeholder Candidates": An Untested Response To Advance Notice Provisions

Many US and Canadian public companies have implemented so-called advance notice provisions ("ANPs"), bylaws and policies requiring shareholders to provide a company with notice by a specified deadline should they wish to propose an alternative slate of directors at a shareholder meeting. Recently, a shareholder of a US company listed on the New York Stock Exchange ran out of time to provide the usual form of notice and instead nominated "placeholder candidates". This article examines the novel and previously untested tactic of nominating "placeholder candidates" in proxy contests.

The Basics of ANPs

ANPs are designed to permit orderly meetings and election contests, and to provide a company with sufficient time to respond to shareholder nominations. At a minimum, ANPs require a shareholder intending to nominate director candidates to provide the company with notice by a deadline in advance of a shareholder meeting (typically not less than 30 days and not more than