Economical enters into Binding Agreement with VC&Co. for Secret Ballot

TORONTO, May 4 /CNW/ - VC & Co. Advisory Limited, which is advising the more than 100 mutual policyholders of Economical Mutual Insurance Company seeking to replace its current board of directors, is very pleased to announce that Economical has today entered into a binding agreement with VC&Co. that ensures all voting at the May 26, 2011 policyholders' meeting will occur by way of secret ballot.

The agreement was entered into in the face of the appeal on this issue filed with the Ontario Court of Appeal and which was scheduled to be heard this Friday, May 6. The appeal was filed several weeks ago by the more than 100 mutual policyholders who signed the Policyholder Proposals after the current board of Economical continued to refuse to provide a mechanism for mutual policyholders to attend and vote in person at the May 26 meeting without their individual voting decisions becoming known to either Economical or VC&Co. The current board previously fought strenuously against providing this basic protection for mutual policyholders during the Court proceedings that took place in March in Kitchener.

Today's agreement between VC&Co. and Economical resolves the appeal and requires that all ballots cast at the May 26 meeting will be seen only by Computershare Investor Services Inc., an independent third party scrutineer, which will independently tabulate and report on all voting at the meeting. The agreement between VC&Co. and Economical requires that all ballots cast at the meeting will be maintained in confidence by Computershare, and will not be disclosed to Economical or to any of its directors, officers, employees or agents. The ballots will ultimately be destroyed by Computershare.

"This is another significant step forward for the rights of mutual policyholders and we are pleased that Economical has finally agreed to this protection," said Michael Woollcombe, Executive Vice President of VC&Co. "But unfortunately, like the current board's demutualization announcement last December, this is yet another example where the current board has shown that it simply cannot be trusted to make the right decisions on its own, and only reacts at the 11th hour under pressure. I believe this very much underscores the need to elect a new board on May 26 that mutual policyholders can trust to consistently protect their interests and make the right decisions for them and Economical going forward. That new board will act with commitment, transparency and out of principle to deliver maximum value to mutual policyholders and to make a better Economical, rather than simply reacting out of expediency when forced."

The effect of today's agreement between VC&Co. and Economical is that any mutual policyholder who wishes to keep their individual voting decision secret can attend and vote in person at the May 26 meeting, rather than voting by proxy in advance of the meeting with a designated voting decision that will be known.

"We encourage any employee, broker or other mutual policyholder who feels pressured or coerced by the current board's proxy solicitation tactics to simply attend and vote in person at the May 26 meeting, rather than providing a proxy in advance. This allows you to vote confidentially, and without any concerns that your individual voting decision may impact you," said Mr. Woollcombe. "The current board should have known better than to waste your money fighting this for the past several months, but with today's agreement we now finally have in place a guaranteed mechanism for those who are concerned about retribution to vote confidentially."

Vote only the YELLOW proxy

Mutual policyholders who wish to vote by proxy are encouraged to complete and return only their YELLOW proxy. YELLOW proxies must be returned by May 13, 2011 in order to be deposited in time to be used at the upcoming meeting. Mutual policyholders with questions or who require assistance in completing and returning the YELLOW proxy should telephone either Michael D. Woollcombe or Shane A. Priemer of VC & Co. Advisory Limited at 416-864-2274.


For further information:

Michael D. Woollcombe
Executive Vice-President, VC & Co. Advisory Limited

Media contact:

Alan Bayless, Client Partner
Longview Communications Inc.

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