TORONTO, March 28, 2017 /CNW/ - George Christopoulos is a beneficial shareholder of Sandvine Corporation ("Sandvine") and currently has control or direction of 2,030,923 shares, and had control or direction over 1,914,281 shares as of the February 22, 2017 record date representing approximately 1.48% of the 129,352,645 shares outstanding.
With regard to the nomination of Sandvine's CFO, Scott Hamilton, the 1,914,281 shares will be voted WITHHOLD.
With regard to the nomination of the current chairman of the board, Roger Maggs, the 1,914,281 shares will be voted WITHHOLD.
These voting decisions were made for the following reasons:
- Having the CFO on the board reduces the board's independence from management. This may be particularly relevant for new board nominations and in considering the possibility of a sale or merger.
- It is highly unusual for the CFO of a TSX listed company to sit on his own board. CFOs typically attend board meetings and are available for questions from the board and can contribute to discussions regardless.
- The presence of the CFO on a seven person board means one less board seat for prospective board members with extensive business or technology experience. The Wall Street Journal article, "A 'Waste of a Board Seat'?" dated October 15, 2012 indicates boards are becoming increasingly independent of management. According to the article, only 19 CFOs of Fortune 500 companies sat on their own boards, down from 37 in 2005.
- Management has two board seats, representing 28.5% of the seven member board. Recent SEDI filings indicate that six officers have combined share ownership of about 5.6% of the outstanding shares. This illustrates that management is significantly over-represented on the board.
Sandvine's CEO was contacted in October 2016 to ask that the CFO not be nominated in the next Circular. Dialogue with the independent chairman, Roger Maggs, was requested but only agreed to well after the issuance of the Circular which is dated February 27, 2017 and includes the CFO's nomination. The view of George Christopoulos is that the underlying issues were not fully examined and considered by Sandvine's board. During the eventual phone call on March 15, 2017, Roger Maggs was not aware that the Circular had been finalized, when in fact the Circular dated February 27 was filed on SEDAR on March 1.
In addition, the following are relevant to Roger Maggs' election:
- In a letter dated February 6, 2017 Sandvine's board indicated its refusal to include in the next Circular a shareholder proposal to limit management to only one board seat.
- None of the independent directors own any shares, indicating Sandvine's board has failed to introduce minimum share ownership requirements which would better align the interests of the entire board with those of Sandvine and its shareholders.
- Sandvine has an Advance Notice Bylaw dealing with board nominations. The recent deadline for such nominations was March 6, 2017. Yet Sandvine's Circular was already finalized on February 27.
- Along with the CFO, Scott Hamilton, Roger Maggs has been a director since 2006, and board renewal is now necessary.
- Roger Maggs is a partner of Celtic House Venture Partners whose limited partnership sold 1,500,000 Sandvine shares on June 15, 2007 at $5.00, and on July 6, 2007 sold 12,700 shares at $6.77, indicating with its final SEDI filing dated July 13, 2007 that it owned 12,499,727 shares, which at that time was just under 10%. The 2008 to 2013 Circulars included the following notation: "Mr. Maggs is a partner in various limited partnerships that form the Celtic House group of funds. To the knowledge of the Corporation, Celtic House Venture Partners Fund IIA LP owned less than ten percent of the outstanding Common Shares of the Corporation as of the date of this Information Circular. Mr. Maggs does not exercise control or direction over these Common Shares." Roger Maggs' connection to a significant shareholder was likely the principal reason he was added to the board in 2006. However, that shareholder sold to below 10% in 2007 and the disclosures since 2014 do not refer to any shares that might be held. These circumstances suggest further rationale for board renewal.
This press release does not constitute a solicitation of proxies, nor is it intended to solicit proxies.
SOURCE George Christopoulos
For further information: George Christopoulos, 647 291 0354