BRAMPTON, ON, June 9, 2015 /CNW/ - DATA Group Ltd. (the "Corporation" or "DATA Group") (TSX: DGI) today announced the results of deliberations by its board of directors (the "Board") following the completion of the Corporation's annual meeting of shareholders (the "Meeting") held on June 4, 2015. Four of the six directors elected at the Meeting, William Albino, Michael Blair, Michael Sifton and J.R. Kingsley Ward (the "Subject Directors"), received more votes withheld than in favour of them. In accordance with the Corporation's majority voting policy (the "Policy"), each of those directors submitted their resignations effective upon acceptance or rejection by the Board. The Board has determined that it will not accept any of those resignations.
Results of the Meeting
Harinder S. Takhar and Rod Phillips were elected as directors of the Corporation at the Meeting and each of them received more votes in favour of their election than were withheld. Each of the Subject Directors were also elected as directors of the Corporation at the Meeting. However, a majority of the votes cast at the Meeting were withheld against each of those four individuals. Of the total number of shares withheld against them, 3,337,500 shares (or between approximately 71% and 75% of the total votes withheld against each of them) were voted by a sole shareholder, KST Industries Inc. ("KST").
Under the terms of the Policy, any director that has more votes withheld than are voted in favour of him or her is expected to tender their resignation to the Board. In accordance with the Policy, the Board must meet to determine whether to accept or reject any resignation tendered.
In reaching its decision to reject the resignations submitted by the Subject Directors, the Board (with none of the Subject Directors participating in the consideration of their own resignation), considered the following factors in respect of each of those directors:
- The composition of the Board and qualifications of the Subject Directors. Mr. Albino, Mr. Blair and Mr. Ward are each independent for purposes of applicable corporate and securities laws thereby enhancing the Board's ability to exercise independent judgement. These directors each bring valuable skills and experience to the Board that are relevant to the Corporation's business, including manufacturing, technology, marketing services, printing and capital markets. Mr. Sifton's presence on the Board promotes a valuable dialogue at the Board as the Corporation's most senior officer. Mr. Sifton also has extensive experience in the printing and media industries.
- Contributions to the Board. Mr. Albino, Mr. Blair and Mr. Ward have actively contributed to the oversight of the management of the Corporation through participation on Board committees and the application of their business experience to the Corporation's affairs.
- Shareholder Support for the Subject Directors. The six directors elected at the Meeting were described in the Corporation's management information circular (the "Circular") for the Meeting mailed to shareholders. The Circular was unanimously approved by the Board. Excluding the 3,337,500 votes withheld by KST, the Subject Directors received between approximately 70% and 76% votes in favour of their election as directors.
- Effect of the resignations on DATA Group's business. The sudden departure of a majority of the Corporation's elected directors without properly qualified replacements may have a material adverse effect on the Corporation's relationships and prospects with existing and prospective customers, creditors, and employees.
- Stated reasons of shareholders that withheld votes. No stated reasons were provided at the Meeting by shareholders that withheld their votes for the election of the Subject Directors.
After careful consideration of the aforementioned factors, the Board concluded that the circumstances surrounding the resignations of the Subject Directors were exceptional and determined that it would not be in the best interests of the Corporation to accept any of those resignations. Accordingly, each of the Subject Directors will remain in office until their successors are elected or appointed.
DATA Group also announced that the Board has elected Mr. Blair as Chair of the Board. The Board has elected Mr. Ward as Vice-Chair of the Board to serve in the absence of the Chair.
About DATA Group Ltd.
DATA Group Ltd. is a managed business communications services company specializing in customized document management and marketing solutions. DATA Group develops, manufactures, markets and supports integrated web and print-based communications, information management and direct marketing products and services that help its customers reduce costs, increase revenues, maintain brand consistency and simplify their business processes. DATA Group's expertise and resources enable it to address any document requirement of its customers, from a simple mail-out to an enterprise-wide document management or direct marketing initiative. We have approximately 1,585 employees working from 34 locations across Canada and the United States to accomplish this.
Additional information relating to DATA Group Ltd. is available on www.datagroup.ca, and in the disclosure documents filed by DATA Group Ltd. on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
SOURCE DATA Group Ltd.
For further information: Mr. Michael Sifton, President and CEO, DATA Group Ltd., Tel: (905) 791-3151; Mr. Paul O'Shea, Chief Financial Officer, DATA Group Ltd., Tel: (905) 791-3151; Mr. James Lorimer, Interim Chief Financial Officer, DATA Group Ltd., Tel: (905) 791-3151