TORONTO, July 12, 2012 /CNW/ - Oliver Lennox-King announced today that
he has sent a letter addressed to the board of directors of Roxgold
Inc. (TSXV:ROG) in response to the board's decision on July 10, 2012,
to postpone the company's annual meeting to September 25, 2012.
Mr. Lennox-King has previously stated that the "decision to postpone the
meeting from its set date of July 12, 2012, is a stunning betrayal of
shareholder rights, and is clear evidence that the current board is
unwilling to accept the decision of the shareholders they are
answerable to that it is time for them to go. This complete lack of
respect for shareholder democracy reinforces the view that a change in
the board and senior management is long overdue."
Mr. Lennox-King said today: "I am extremely gratified with the
overwhelming support I have received from Roxgold shareholders. In
addition to the proxies for 28.5% of the Roxgold shares I held at the
time of my initial press release on July 9, a number of additional
shareholders holding over 28% of the Roxgold shares have since
contacted me to express their endorsement of my proposed changes and
request a form of proxy. Together with my initial proxies, this
represents well in excess of 50% of the outstanding Roxgold shares."
Roxgold shareholders who wish to support Mr. Lennox-King's initiative
for an improved Roxgold at the annual meeting on September 25, 2012
should anticipate receiving the Lennox-King form of proxy at or around
the same time as the current board sends its revised information
circular and form of proxy for the meeting, which is expected to be in
A copy of Mr. Lennox-King's letter sent to the Roxgold board earlier
today is provided below:
July 12, 2012
401 Bay Street
Suite 3101, P.O. Box 148
Toronto, ON M5H 2Y4
The Board of Directors
1500-1199 West Hastings Street
Vancouver, British Columbia
Attention: Allan J. Fabbro, Lead Director
It is with deep regret that I am writing you this letter today.
However, as a result of the outrageous action taken by you to postpone
the upcoming annual general meeting of Roxgold by two and a half
months, to September 25, 2012, I feel I have no choice in the matter.
I believe your recent actions can only be characterized as a blatant
attempt to circumvent the will of the Roxgold shareholders and entrench
yourselves at their expense.
I am one of Roxgold's largest shareholders, holding approximately 3.829
million Roxgold shares. As you are aware, I announced in a press
release on July 9, 2012, that I held proxies obtained in connection
with your upcoming shareholders meeting, then scheduled for July 12,
2012, from various Roxgold shareholders that, together with my own
Roxgold shares, represented approximately 28.5% of the issued and
outstanding Roxgold shares.
Following the issuance of that release, a number of additional
shareholders of Roxgold holding over 28% of the outstanding shares have
contacted me or my representatives in order to voice their overwhelming
support for my initiative to replace the Roxgold board. These
shareholders informed us that they would take the necessary steps to
ensure that the slate of highly qualified directors I proposed would be
elected as directors of Roxgold. It is now clear to me that well over
50% of the outstanding shares of Roxgold will be voted in support of my
I was shocked to learn by press release on Tuesday evening that you have
decided to postpone the meeting date by two and a half months to a date
that is almost a full year following the end of Roxgold's 2011
financial year, despite the fact that you had indicated in your earlier
release that "postponing the [Meeting] will allow all shareholders to
make an informed decision, and enable the Board to engage the dissident
group in a constructive manner". Such an egregious delay clearly
indicates that the ability of the shareholders to make an informed
decision was the last thing on your mind. Rather, under the guise of
shareholder democracy, you have taken the unprecedented step of
delaying the meeting well beyond any period possibly required by the
shareholders to decide who should serve on the board of their company.
I believe your decision to postpone the meeting date in such an
unprecedented manner in the face of overwhelming shareholder opposition
to your continued service constitutes a stunning betrayal of
shareholder rights, and is completely out of step with any reasonable
actions a board might properly consider. In any comparable situation,
directors might see fit to extend the annual meeting by three to four
weeks at most, so as to allow solicitation to occur and to ensure a
robust turnout at the meeting. In my view, the unprecedented action
you have taken is obvious evidence of your desire to protect your own
economic self-interests at the expense of shareholders and flies in the
face of any responsible standard of corporate governance. This was a
remarkably ill-advised decision.
I am formally putting you on notice that if the board of directors of
Roxgold continues to take steps to disenfranchise me and the other
Roxgold shareholders who support my initiative, or to otherwise
frustrate my efforts to implement critical and broadly supported
changes to the company, or to impair the company or its prospects in
any manner, I intend to hold each member of the board of directors
fully liable for all damages suffered as a result of such actions, as
well as any and all costs that may be incurred in connection with the
protection of my rights. You should fully expect that shareholders
that support my initiative would join in any such proceeding.
I emphasize that on the first day of trading following the issuance of
my July 9 press release, the shares of Roxgold increased in value by
approximately 34%. The market has clearly endorsed my initiative, and
your continuing efforts to unjustly deny shareholders the benefit of
such change exposes the shareholders of Roxgold to a substantial,
quantifiable loss of wealth.
I also am formally putting you on notice that once the slate of
directors I have nominated is elected to the Roxgold board, our
intention will be to carry out a careful examination of all
expenditures made by the company from the time of my initial press
release on July 9, with the intention of recouping every dollar that
may be spent for your personal benefit or to protect your personal
If after obtaining control of the board it becomes evident that you have
dissipated company resources in pursuit of an entrenchment strategy, or
otherwise for your personal benefit, it is my intention to seek court
authority to declare your actions in breach of your fiduciary
obligations to Roxgold, and accordingly deny each of you any right to
indemnification you may otherwise enjoy pursuant to any indemnity
arrangements with Roxgold or under applicable laws.
Finally, given the present circumstances, I expect that you will only
carry out the business of Roxgold in the ordinary course, and that
without the consent of Roxgold shareholders, you will not undertake any
transactions that would change, modify or diminish the current asset
base of Roxgold, issue further shares of Roxgold, or in any other way
affect the capitalization of Roxgold until replacement directors
acceptable to the shareholders of Roxgold have been appointed. I also
fully expect that you will not seek to pre-empt the new board of
directors to be elected by shareholders at the annual meeting by making
any changes to the Chief Executive Officer or other senior management
roles of Roxgold.
I remain hopeful that you will reconsider your recent course of action
and seek instead to carry out a proper exercise of your fiduciary
obligations to the company and the Roxgold shareholders as a whole.
However, I reiterate that I fully intend to take any and all steps
necessary to protect the interests of all shareholders from further
abuse, and will not hesitate to hold you personally liable for any
continued actions taken to further your own interests.
I would ask that you ensure that a copy of this letter is delivered to
each Roxgold director to ensure that each director is aware of the
critical matters referred to above.
Yours very truly,
(Signed) Oliver Lennox-King
Certain statements in this press release contain forward-looking
information within the meaning of applicable securities laws in Canada
("forward-looking information"). The words "anticipates", "believes",
"budgets", "could", "estimates", "expects", "forecasts", "intends",
"may", "might", "plans", "projects", "schedule", "should", "will",
"would" and similar expressions are often intended to identify
forward-looking information, although not all forward-looking
information contains these identifying words.
The forward-looking information in this press release includes, but is
not limited to: the nomination and election of the Lennox-King Nominees
and replacement of Roxgold's current directors; the timing and holding
of the Roxgold meeting; and the future prospects of Roxgold.
In connection with the forward-looking information contained in this
news release, Mr. Lennox-King has made numerous assumptions. While Mr.
Lennox-King considers these assumptions to be reasonable, these
assumptions are inherently subject to significant uncertainties and
contingencies. Additionally, there are known and unknown risk factors
which could cause actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking information
contained herein. Known risk factors include, among others, that the
Lennox-King Nominees may not be elected to the board of Roxgold.
All forward-looking information in this press release is qualified in
its entirety by this cautionary statement and, except as may be
required by law, Mr. Lennox-King undertakes no obligation to revise or
update any forward-looking information as a result of new information,
future events or otherwise after the date hereof.
SOURCE Oliver Lennox-King
For further information:
Vice-President, Kingsdale Communications Inc
416 867 2304