Highlights That the Board is Wasting
Shareholder Resources in Its Baseless Attempt to Invalidate
Engine’s Director Nomination
Asserts the Board’s Efforts to Use Regulatory
Intervention to Retain Power Only Underscore the Urgent Need for
Significant Change at the Upcoming Annual Meeting
Engine Capital LP (together with its affiliates, "Engine" or
"we"), which owns approximately 7.1% of the issued and outstanding
common shares of Dye & Durham Limited (TSX: DND) ("Dye &
Durham" or the "Company"), today issued the following statement
regarding the Board of Directors’ (the “Board”) recent efforts to
entrench itself and disenfranchise shareholders, including by
raising frivolous concerns about Engine’s director nomination
notice as a potential prelude to invalidate the nomination:
“Chair Colleen Moorehead and her Board’s actions indicate that
they will go to great lengths to maintain power and prevent
shareholders from having their voices heard. After pursuing a
requisitioned shareholder meeting to refresh the Board for over
eight months, Engine received a letter from Company counsel late
Friday raising baseless concerns regarding our director nomination
notice for the upcoming Annual Meeting and seeking additional
superfluous information.1 Dye & Durham continues to baselessly
claim that Engine is part of a shareholder group – a false
assertion that’s been obsessively peddled by Ms. Moorehead and CEO
Matt Proud for months now.
Despite these transparent entrenchment efforts, Engine intends
to comply with the information requests and urges the Board to
immediately cease its gamesmanship and commit to providing
shareholders the opportunity to vote for our world-class slate at
the December Annual Meeting. If the Board invalidates our
nomination, Engine will be forced to take legal action against the
Company, which would only waste additional shareholder capital and
potentially delay the Annual Meeting. We suspect this is Ms.
Moorehead and Mr. Proud’s ultimate goal and cannot permit this
precedent of weaponizing the corporate machinery.
This latest defense tactic follows the Board’s attempts to use a
Competition Bureau investigation into Dye & Durham to convince
the Court that current management and the Board should stay in
power. Ironically, Mr. Proud and the Board’s own mismanagement – as
evidenced by the stunning admission in Court documents that eight
out of 11 direct reports of Mr. Proud recently departed – is what
seemingly put Dye & Durham in the crosshairs of the Competition
Bureau in the first place. Under the Board’s oversight, nearly the
entire senior management team reporting to Mr. Proud has exited the
Company, Canadian regulators have launched an investigation, two
deals in the U.K. and Australia were blocked by regulators,
shareholder feedback has been ignored for years and customers have
grown increasingly aggravated.
Finally, given Ms. Moorehead’s history of self-preservation
tactics, we caution the Board against resorting to further
entrenchment maneuvers before the upcoming shareholder vote,
including self-refreshment. The Company’s directors should not
hand-pick their successors given their track record of poor
performance and anti-shareholder governance. Shareholders have the
right to elect a new Board composed of independent and experienced
directors whose sole focus will be creating long-term shareholder
value.”
***
As a reminder, Engine is seeking to reconstitute Dye &
Durham’s Board with six highly qualified director
candidates – Arnaud Ajdler, Hans T. Gieskes, Tracey E.
Keates, Ritu Khanna, Anthony P. Kinnear and Sid Singh – at the
Company’s 2024 Annual Meeting of Shareholders scheduled for
December 17, 2024.
***
Information in Support of Public
Broadcast Exemption under Canadian Law
The information contained in this press release does not and is
not meant to constitute a solicitation of a proxy within the
meaning of applicable corporate and securities laws. Shareholders
of the Company are not being asked at this time to execute a proxy
in favour of Engine’s director nominees or in respect of any other
matter to be acted upon at the Annual Meeting. In connection with
the Annual Meeting, Engine intends to file a dissident information
circular in due course in compliance with applicable corporate and
securities laws. Notwithstanding the foregoing, Engine has
voluntarily provided in, or incorporated by reference into, this
press release the disclosure required under section 9.2(4) of NI
51-102 – Continuous Disclosure Obligations (“NI 51-102”) and has
filed a document (the “Document”) containing disclosure prescribed
by applicable corporate law and disclosure required under section
9.2(6) of NI 51-102 in respect of Engine’s director nominees, in
accordance with corporate and securities laws applicable to public
broadcast solicitations. The Document is hereby incorporated by
reference into this press release and is available under the
Company’s profile on SEDAR+ at www.sedarplus.ca. The registered
office of the Company is 25 York Street, Suite 1100 Toronto,
Ontario M5J 2V5.
None of Engine, any other “dissidents” within the meaning of the
Ont. Reg. 62 of the Business Corporations Act (Ontario) and any
partner, officer, director and control person of such “dissidents”
(collectively, the “Engine Group”) is requesting that Company
shareholders submit a proxy at this time. Once formal solicitation
of proxies in connection with the Annual Meeting has commenced,
proxies may be revoked in accordance with subsection 110(4) of the
Business Corporations Act (Ontario) by a registered holder of
Company shares: (a) by completing and signing a valid proxy bearing
a later date and returning it in accordance with the instructions
contained in the accompanying form of proxy; (b) by depositing an
instrument in writing that is signed by the shareholder or an
attorney who is authorized by a document that is signed in writing
or by electronic signature; (c) by transmitting by telephonic or
electronic means a revocation that is signed by electronic
signature in accordance with applicable law, as the case may be:
(i) at the registered office of the Company at any time up to and
including the last business day preceding the day the Annual
Meeting or any adjournment or postponement of the Annual Meeting is
to be held, or (ii) with the chair of the Annual Meeting on the day
of the Annual Meeting or any adjournment or postponement of the
Annual Meeting; or (d) in any other manner permitted by law. In
addition, proxies may be revoked by a non-registered holder of
Company shares at any time by written notice to the intermediary in
accordance with the instructions given to the non-registered holder
by its intermediary.
The costs incurred in the preparation and mailing of any
circular or proxy solicitation by Engine and any other participants
named herein will be borne directly and indirectly by the Engine
Group. However, to the extent permitted under applicable law, the
Engine Group intends to seek reimbursement from the Company of all
expenses incurred in connection with the solicitation of proxies
for the election of the Nominees at the Annual Meeting.
This press release and any solicitation made by Engine is, or
will be, as applicable, made by such parties, and not by or on
behalf of the management of the Company. Proxies may be solicited
by proxy circular, mail, telephone, email or other electronic
means, as well as by newspaper or other media advertising and in
person by managers, directors, officers and employees of Engine who
will not be specifically remunerated therefor. In addition, Engine
may solicit proxies by way of public broadcast, including press
release, speech or publication and any other manner permitted under
applicable Canadian laws, and may engage the services of one or
more agents and authorize other persons to assist it in soliciting
proxies on their behalf.
Engine Capital LP has entered into an agreement with Morrow
Sodali (Canada) Ltd. (“Sodali”) for solicitation and advisory
services in connection with the solicitation of proxies for the
Annual Meeting, for which Sodali will receive a fee not to exceed
US$175,000, together with reimbursement for reasonable and
out-of-pocket expenses, and will be indemnified against certain
liabilities and expenses, including certain liabilities under
securities laws.
No member of the Engine Group nor any of their associates or
affiliates has or has had any material interest, direct or
indirect, in any transaction since the beginning of the Company’s
last completed financial year or in any proposed transaction that
has materially affected or will or would materially affect the
Company or any of the Company’s affiliates. No member of the Engine
Group nor any of their associates or affiliates has any material
interest, direct or indirect, by way of beneficial ownership of
securities or otherwise, in any matter to be acted upon at the
Annual Meeting, other than the election of directors.
Disclaimer for Forward-Looking
Information
Statements contained herein that are not historical facts
constitute “forward-looking statements” and “forward-looking
information” (together, “forward-looking statements”) within the
meaning of applicable securities laws that reflect Engine’s current
expectations, assumptions, and estimates of future events,
performance and economic conditions. Such forward-looking
statements rely on the safe harbor provisions of applicable
securities laws. Because such statements are subject to risks and
uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements and there
can be no assurance that the Company’s securities will trade at the
prices that may be implied herein, and there can be no assurance
that any opinion or assumption herein is, or will be proven,
correct. Words and phrases such as “anticipate,” “believe,”
“create,” “drive,” “expect,” “forecast,” “future,” “growth,”
“intend,” “hope,” “opportunity,” “plan,” “confident,” “restore,”
“reduce,” “potential,” “proposal,” “unlock,” “upside,” “will,”
“would,” and similar words and phrases are intended to identify
forward-looking statements. These forward-looking statements may
include, but are not limited to, statements concerning: the
anticipated financial and operating performance of Dye &
Durham; anticipated changes to Dye & Durham’s debt levels and
financial ratios; the outcome of the Annual Meeting; the release of
a transition plan and go-forward strategy; anticipated EBITDA; and
achieving organic growth, free cash flow generation and leverage
reduction. Such forward-looking statements are not guarantees of
future performance or actual results, and readers should not place
undue reliance on any forward-looking statement as actual results
may differ materially and adversely from forward-looking
statements. All forward-looking statements contained herein are
made only as of the date hereof, and Engine disclaims any intention
or obligation to update or revise any such forward-looking
statements to reflect events or circumstances that subsequently
occur, or of which Engine hereafter becomes aware, except as
required by applicable law.
About Engine Capital
Engine Capital LP is a value-oriented special situations fund
that invests both actively and passively in companies undergoing
change.
1 Engine requisitioned a special meeting on March 10, 2024,
which was later cancelled by the Company.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241111334086/en/
For Investors: Engine Capital LP 212-321-0048
info@enginecap.com For Media: Longacre Square Partners
Charlotte Kiaie / Bela Kirpalani, 646-386-0091
engine-DND@longacresquare.com
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