MISSISSAUGA, ON, Sept. 19, 2011 /CNW/ - Genesis Worldwide Inc.
("Genesis" or the "Company"), (NEX: GWI.H), announced today that, as a
result of concerns expressed to it with respect to the "independence"
for the purposes of National Instrument 52-110 - Audit Committees ("NI
52-110") of Bradley Baker, a director and insider of the Company, it is
issuing this press release elaborating on how the directors of the
Company made their determination that Mr. Baker is "independent" as
defined in NI 52-110. The board of directors of the Company has
previously made a considered and good faith determination that Mr.
Baker is independent and that the Company's existing disclosure with
respect to same is entirely appropriate.
Pursuant to NI 52-110, a director is independent if he or she has no
direct or indirect "material relationship" with the issuer. Generally
speaking, a "material relationship" as defined in NI 52-110 is a
relationship which could, in the view of the issuer's board of
directors, be reasonably expected to interfere with the exercise of the
director's independent judgment. In making their determination that Mr.
Baker is "independent", the directors carefully considered all of Mr.
Baker's relationships with Genesis, including the fact that he
exercises control or direction over approximately 23.9% of the
outstanding shares of the Company and served as Chairman of the Board
of the Company from June 29, 2009 until he resigned from that position
on June 30, 2010.
When Mr. Baker first became a director of the Company on February 23,
2009, he exercised control or direction over significantly less than
10% of the outstanding shares of the Company and the largest percentage
of shares of the Company over which he exercised control or direction
was 33.3% in October 2010. His holdings decreased to their current
percentage in February 2011 when the Company completed a private
placement. Having regard to all relevant facts and circumstances with
respect to the relationship between Mr. Baker, Codding Enterprises L.P.
("Codding"), the entity which is the registered and beneficial owner of
most of the shares of the Company which Mr. Baker exercises control or
direction over by virtue of his being the Chairman, President and Chief
Executive Officer thereof, and the Company, and in light of the
holdings of a number of other large shareholders, the board of
directors is of the view that Mr. Baker does not control, and has never
controlled, Genesis as he does not have, and has never had, the power
to direct or cause the direction of the management and policies of the
Company. In addition, Mr. Baker is only one of four directors of the
Company and, therefore, does not have a controlling vote on the board
While Mr. Baker served as the Chairman of the Board of Genesis from June
29, 2009 until he resigned from that position on June 30, 2010, he did
so on a part-time basis, devoting less than 10% of his time to the
affairs of the Company throughout his tenure as Chairman, and he only
received nominal consideration for doing so. Furthermore, while Codding
had a number of contractual relationships with the Company, including a
consulting contract pursuant to which it provided consulting services
to the Company, a joint venture agreement with Codding Steel Frame
Technologies, an affiliate of Codding, and a master license agreement
with Genesis Steel Frame Solutions L.P., both of which were entered
into in an effort to enhance the worldwide adoption of the Genesis
Solution and increase the revenues of Genesis, and a loan agreement
with the Company which it acquired from a large non-bank Canadian
institutional lender, the directors do not consider that these
relationships could be reasonably expected to interfere with the
exercise of Mr. Baker's independent judgment, particularly in light of
the fact that in respect of all matters involving the relationship
between Codding and Genesis, Mr. Baker declared a conflict of interest,
absented himself from the deliberations of the directors in respect
thereof and refrained from voting thereon, in compliance with
applicable corporate law.
Sections 1.4 and 1.5 of NI 52-110 set out certain circumstances in which
Mr. Baker will be deemed to have a "material relationship" with the
Company notwithstanding the considered and good faith determination by
the directors of the Company that there does not exist a relationship
which could, in the view of the issuer's board of directors, be
reasonably expected to interfere with the exercise of Mr. Baker's
independent judgment. The board of directors of Genesis has carefully
considered the provisions of sections 1.4 and 1.5 of NI 52-110 and
determined that none of the circumstances which would result in Mr.
Baker being deemed to have a "material relationship" with Genesis
apply. In particular, while subsection 1.4(3) of NI 52-110 provides
that an individual who has been an executive officer of an issuer
within the last three years is considered to have a "material
relationship" and Mr. Baker was an executive officer of the Company
until June 30, 2010 by virtue of being Chairman of the Company, he
performed his duties as Chairman on a part-time basis, devoting less
than 10% of his time to the affairs of the Company throughout his
tenure as Chairman and subsection 1.4(7) of NI 52-110 states that,
despite subsection 1.4(3), an individual will not be considered to have
a material relationship solely because he acts, or previously acted, as
chair of the board of directors on a part-time basis.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE Genesis Worldwide Inc.
For further information:
Genesis Worldwide Inc.
Chief Executive Officer
Tel: (707) 478-6250