MISSISSAUGA, ON, Dec. 20, 2013 /CNW/ - The Second Cup Ltd. ("Second Cup"
or the "Company") (TSX: SCU) and Paul D. Phelan, 1792368 Ontario Ltd.
("1792368") and 453294 Ontario Inc. ("453294") (collectively, the
"Phelan Parties") today announced the reconstitution of the Board of
Directors of the Company. The reconstituted Board is comprised of the
following five individuals: Michael Bregman, Stephen Kelley, Alton
McEwen, Rael Merson and Alan Simpson. Mr. Bregman has also been
appointed Chairman of the Board of Directors of the Company. The Board
reconstitution is designed to place the Company in the best position to
create long-term value for all its shareholders.
Michael Bregman, Chairman of the Board of Directors, stated, "I am
excited about the opportunity to serve Second Cup again in the role of
Chairman. Second Cup has a proud history on which to build an even
brighter future. Our shareholders will benefit as owners of Second Cup
cafés achieve higher levels of success through delivery of superior
standards of quality, service and ambience. We have assembled an
outstanding group of directors, each of whom will bring positive
attributes to help steward the Company's direction. I am especially
pleased that my long time colleague Alton McEwen will join the Board.
Alton provided invaluable leadership at Second Cup during its greatest
years, and he possesses immense coffee knowledge."
The Phelan Parties, Second Cup's largest shareholders, collectively own
and exercise control and direction over a total of 3,270,200 common
shares of Second Cup, of which 1,193,800 common shares are owned by
453294 and 2,076,400 common shares are owned by 1792368. Together,
this represents approximately 33% of the issued and outstanding common
shares of Second Cup. 1792368 and 453294 are companies that are
controlled by Mr. Phelan.
In connection with the reconstitution of the Board of Directors of the
Company, the Phelan Parties entered into an agreement with Tailwind
Capital Inc. ("Tailwind") and Michael Bregman pursuant to which, among
other things and subject to certain conditions, 1792368 and 453294
agreed to sell to Tailwind, or an investment fund managed by Tailwind,
500,000 common shares of Second Cup, representing approximately 5% of
the outstanding common shares of Second Cup, for $4.00 per common share
for an aggregate purchase price of $2,000,000. In connection with the
proposed sale to Tailwind, 1792368 and/or 453294 intend to rely on the
prospectus exemption set out in section 2.10 of National Instrument
45-106 by virtue of satisfying the criteria set forth therein. Tailwind
is a corporation controlled by Mr. Bregman and its address is 901 - 30
St. Clair Avenue West, Toronto, Ontario, M4V 3A1.
The Phelan Parties may from time to time, acquire additional securities
of Second Cup, dispose of some or all of the existing or additional
securities or may continue to hold their current positions. The Common
Shares to be acquired by Tailwind are being acquired for investment
purposes. Depending on market and other conditions, Tailwind may, from
time to time, increase or decrease its ownership, control or direction
over common shares or other securities of Second Cup.
The issuance of this news release is not an admission that any person or
entity named herein is a joint actor with any other person or entity so
For further information relating to the Phelan Parties or for a copy of
the report filed under Part 3 of National Instrument 62-103 and Section
102.1 of the Securities Act (Ontario), please contact:
Stephen S. Kelley,
1792368 Ontario Ltd. and 453294 Ontario Inc.
12 Lawton Blvd. Toronto, Ontario, M4V 1Z4
About Second Cup®
Founded in 1975, Second Cup® is Canada's largest specialty coffee
franchisor operating more than 350 cafés across the country. All 4,000
Second Cup® associates are trained coffee experts who handcraft over
1,000,000 coffee and tea beverages every week, and are committed to
ensuring "there's a little love in every cup.™" For more information,
please visit www.secondcup.com or find us on Facebook and Twitter.
Certain statements in this news release may constitute forward-looking
statements. Forward-looking statements include words such as "may",
"will", "should", "expect", "anticipate", "believe", "plan", "intend"
and other similar words. These statements reflect current expectations
regarding future events and operating performance and speak only as of
the date of this release. These forward-looking statements should not
be read as guarantees of future performance or results and will not
necessarily be accurate indications of whether or not those results
will be achieved. Forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause Second
Cup's actual results, performance or achievements, or those of Second
Cup cafés, or industry results to be materially different from any
future results, performance or achievements expressed or implied by
those forward-looking statements.
APPENDIX - DIRECTOR BIOGRAPHIES
Michael Bregman - Mr. Bregman is the Principal and Chief Executive Officer of Tailwind
Capital Inc., a Toronto-based investment management firm. Mr. Bregman
is an experienced entrepreneur and was formerly the Chairman and Chief
Executive Officer of Second Cup. After purchasing the company for
$12 million in 1988, Mr. Bregman took Second Cup public in 1993,
ultimately returning $175 million to shareholders, culminating in the
sale of the company to Cara Operations Ltd. in 2002. He currently
serves on the board of directors of Clairvest Group Inc., Ideaca Ltd.
and MapleMusic and previously served on the board of directors of a
number of other companies, including General Donlee Canada Inc., Vincor
International Inc. and Humpty Dumpty Snack Foods Inc. Mr. Bregman
earned an MBA from the Harvard Business School after receiving his
undergraduate degree from the Wharton School of Business at the
University of Pennsylvania.
Stephen Kelley - Mr. Kelley has served as the Chief Executive Officer of Stocom
Research Trading & Investments Ltd., an investment firm, since 2004.
Prior to that, Mr. Kelley was a financial analyst with Stocom from 1999
to 2004. He was first appointed to the board of directors of Second Cup
in October 2012 and is also currently a director of Wind Athletes
Canada. Mr. Kelley holds an Honours Bachelor of Science, Applied
Mathematics degree from the University of Western Ontario.
Alton McEwen - Mr. McEwen has been the Chief Executive Officer of Distant Lands
Coffee since July 2011. Distant Lands Coffee is a leading vertically
integrated coffee company, which is involved in farming, milling, and
roasting coffee for leading food service and grocery retail companies
in the US and Internationally. Mr. McEwen has worked in the food and
beverage business throughout his career and actively in the coffee
business as President and Chief Executive Officer of Second Cup from
1988 to 1996 and from 2000 to 2004, and served as President of a number
of Second Cups' US acquisitions from 1997 to 1999. He has served on the
Strategic Planning Committee of the Specialty Coffee Association and on
the Board of the Canadian Coffee Association. He has been on the Board
of Swiss Water Decaffeinated Coffee since 2005 and Distant Lands since
2006. From 1987 to 1993 he was President of mmmuffins and Michel's
Baguette bakery cafés, a chain of 250 bakery stores in Canada and the
US. From 1983 to 1987, Mr. McEwen was President of Rowntree MacIntosh
Canada, an industry leading confectionary company, and Laura Secord
Candy stores. Mr. McEwen is a graduate of McGill University.
Rael Merson - Mr. Merson is the President of Mixed Use Capital, a real estate
development company that is developing commercial real estate in
California. Mr. Merson retired as President of Rogers Broadcasting
Limited in 2008 after spending over 21 years building that company into
one of Canada's leading broadcasters. He is most closely associated
with the various acquisitions that were made to build Rogers
Broadcasting, including The Shopping Channel, City TV, Sportsnet, OMNI
TV and various radio stations.
Alan Simpson - Mr. Simpson graduated from the Wharton School of Economics and
Finance (Summa Cum Laude) in 1983. That year, he joined Town Shoes when
the company had a total of only 9 stores located in Ontario. In 1990,
Mr. Simpson became Chief Operating Officer of Town Shoes and in 1992
started The Shoe Company. From 2000 until 2013, he served as Chief
Executive Officer of both Town Shoes and The Shoe Company. During that
time, Town Shoes and The Shoe Company expanded to approximately 200
stores across Canada, including through acquisitions of Sterling Shoes
and The Shoe Warehouse. In 2012, Town Shoes and The Shoe Company were
acquired by Callisto Capital and Alberta Investment Management Corp.
SOURCE: The Second Cup Ltd.
For further information:
please contact Stephen S. Kelley at 416-966-3485.