ECN Capital Corp. (ECN) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of ECN Capital Corp. Please note that today's meeting is being recorded. During the meeting, you can submit questions or comments at any time by clicking on the Q&A icon. It is now my pleasure to turn today's meeting over to Mary Beth Koenig. Ms. Koenig, the floor is yours.

Thank you. Good morning. My name is Mary Beth Koenig. I am the Chief Legal Officer, General Counsel and Corporate Secretary of ECN Capital Corp. I would like to provide the usual caution that to the extent we make forward-looking statements about our business or prospects in the course of today's meeting, any such statements are based on management's beliefs and opinions and are subject to risks and uncertainties that may cause actual results to vary. I would direct you to the detailed discussion of risk factors set out in our annual information form and related management discussion and analysis for the financial year ended December 31, 2021. I will now turn the meeting over to our Chairman, Bill Lovatt.

Thank you, Mary Beth. Good morning, ladies and gentlemen. My name is Bill Lovatt, I am Chairman of the Board. We have members of our Board and management in attendance virtually today. We look forward to proceeding through our annual business of today's meeting. With your consent, I will serve as Chair of today's meeting. Joining us virtually from the ECN management team, in addition to Mary Beth, are Steve Hudson; and Michael Lepore, Chief Financial Officer. In addition to the ongoing public health impact of the continuing COVID-19 pandemic and government recommendations and to mitigate risks to the health and safety of our communities, shareholders, employees and other stakeholders, we are holding today's meeting in a virtually only format, which is accessible to all registered shareholders and duly appointed proxy holders with a control number regardless of physical location to participate and vote. We look forward to meeting you again in person when it is safe and permitted to do so. Our goal is to replicate as best as we can the experience you would have if we were meeting in person. The individuals who will be speaking today are not all in the same physical location. For this reason, I may pause from time to time to allow coordination from the various locations. I will also pause at certain points during the meeting to provide an opportunity to vote or respond to questions on the presented motion. I will now call the meeting to order. I will preside as Chair of the meeting. I ask Mary Beth Koenig, Chief Legal Officer, General Counsel, Corporate Secretary, to act as Secretary of the meeting. First, we will call the meeting to order and go through the procedural matters. Then we have 7 matters of formal business to conduct today. First, the presentation of the 2021 audited financial statements; second, the election of directors; third, the reappointment of the corporation's auditors; fourth, consideration on the advisory resolution on corporate approach to executive compensation; fifth, the reapproval of the corporation's share option plan as amended, sixth, the reapproval of the corporation's deferred share unit plan; and seven, the approval of the corporation's share unit plan as amended. We expect that the vast majority of all votes will all have been cast in advance of today's meeting by proxy. That said, registered shareholders and duly appointed proxy holders who have been issued control numbers are able to vote online at the meeting in accordance with the instructions to be provided. Given the virtual format of the meeting, and in order to -- for us to expediently undertake discussion on any matter proposed for a vote, we would encourage shareholders who have specific questions on formal items of business to submit such questions now, clearly identifying the applicable item of the formal business as well as your name and contact information. Registered shareholders and duly appointed proxy holders of the control number can submit questions by clicking on the Q&A icon, typing in and submitting their questions. Relevant questions will be addressed prior to voting on the applicable motion. Questions that are similar in nature or repetitive will be grouped together and addressed in a single response. If we are unable to answer your questions during this meeting, or your question is not specifically related to the motion being voted on, a member of our team will follow up with you after the meeting as appropriate. I hereby appoint Yasir Zaidi of Computershare Investor Services to act as scrutineer for the meeting. I can confirm that the notice of the meeting, together with the form of proxy and management information circular and the financial statements of ECN Capital as at and for the financial year ended December 31, 2021, and the auditor's report thereon have been sent to each director of the corporation, the auditors of the corporation and each requesting shareholder of the common shares on February 25, 2022, the record date for that meeting. The scrutineer has provided me with the preliminary report regarding shareholder attendance at the meeting. The scrutineer reports that there are present at this meeting in person or by proxy 53 shareholders holding 183,827,105 common shares. This represents 74% of our outstanding shares. We thank our shareholders for your strong show of support today. I am advised by the scrutineer that all ballots already been submitted by duly appointed proxy holders and registered shareholders who are entitled to vote at the meeting. Based on the preliminary report from the scrutineer of the proxies and ballots received, all items of business today have received more than 90% of votes in favor. Accordingly, for expediency, we will move through the motions, resolutions and any relevant questions quickly. I declare that the requisite quorum of shareholders is present, and I declare that the meeting is duly and formally constituted for the transaction of business. I direct that the confirmation of the mailing of the notice of the meeting received by Computershare and the scrutineer's report -- a complete report on the attendance be annexed to the minutes of the meeting as a schedule. The first item of business is the presentation of corporation's 2021 financial statements and the auditor's report thereon. We will dispense with the reading of the auditor's report at this meeting. Our next item of business is the election of directors. We have 7 directors to be elected, and I now declare the meeting open for nominations. In the interest of expediency, I will ask Michael Lepore to make the nominations on behalf of the management of the corporation.

Mr. Chair, I nominate those persons specified in the Management Information Circular delivered with the Notice of Meeting, namely, William Lovatt, Steven Hudson, Paul Stoyan, Pierre Lortie; David Morris, Carol Goldman and Karen Martin to serve as directors of the corporation, to hold office until the next Annual Meeting of Shareholders or until their successors are duly elected or appointed in accordance with the articles and bylaws of the corporation.

Thank you, Michael. In accordance with the advanced notice provisions of our bylaws, no further nominations may be made at this time. Therefore, I declare the nominations closed. I request a motion that the 7 persons nominated as directors of the corporation be so elected.

My name is Mary Beth Koenig, and I so move.

Thank you, Mary Beth. May I have the motion seconded?

My name is [ David Taswell ], and I second the motion.

Thank you, David. Before I call for a vote on the motion, have any questions related specifically to this item been received? As a reminder, registered shareholders and duly appointed proxy holders with a control number who have logged in using such a control number may submit questions by clicking the Q&A icon, typing in and submitting their questions.

Mr. Chairman, I confirm that we have not received any questions from shareholders, specifically on this item.

Thank you. We will conduct the vote on the matter before us by online ballot. The poll relating to this specific motion will close in 15 seconds. [Voting]

I confirm the polls are now closed. Based on the preliminary voting results, I declare all those nominated to be elected to serve as directors of the corporation to hold office until the next Annual Meeting of Shareholders of the corporation. Individual voting results for each nominee based upon the proxies and the votes received at the meeting will be set out in our corporate filings after the meeting and the results press release in accordance with the rules of the TSX. We will now move to the reappointment of auditors. May I have a motion that Ernst & Young LLP be reappointed as auditors of the corporation until the next Annual Meeting of Shareholders or until a successor is appointed, and that the Board of Directors are authorized to fix the auditor's remuneration?

I so move.

Thank you, Mary Beth. May I have the motion seconded?

Mr. Chairman, I second the motion.

Thank you, David. Before I call for a vote on the motion, any questions relating specifically to these items been received?

Mr. Chairman, I confirm we have not received any questions from shareholders, specifically on this item.

Thank you. We will conduct the vote on the matter before us by online ballot. The poll relating to this specific motion will close in 15 seconds. [Voting]

I confirm the polls are now closed. Based on the preliminary voting results, I declare the motion carried. Our voting results on this and all other matters will be filed and reported on after the meeting. We will now move to the consideration of the advisory resolution on the corporation's approach to executive compensation. As described in the management information circular sent to shareholders with the notice of this meeting, shareholders are asked to approve the resolution on the corporation's approach to executive compensation. This vote is advisory only and nonbinding on the corporation and the Board. However, it will influence how the Board and the Compensation and Corporate Governance Committee look at compensation in the future. This advisory resolution is set out on Pages 9 and 10 of the management information circular under Item 4. May I have the motion on the advisory resolution?

I so move, Mr. Chairman.

Thank you, Mary Beth. May I have the motion seconded?

I second the motion.

Thank you, David. Before I call for a vote on the motion, have any questions relating specifically to this item been received?

Mr. Chairman, I confirm we have not received any questions from shareholders, specifically on this item.

Thank you. We will conduct the vote on the matter before us by online ballot. The polls relating to this specific motion will close in 15 seconds. [Voting]

I confirm the polls are now closed. Based on the preliminary voting results, I declare the motion carried. We'll now move on to the reapproval of the share option plan. As described in the circular, Toronto Stock Exchange rules require that all listed issuers must submit their share option plan or reapproval by our shareholders every 3 years. Accordingly, shareholders are asked to reapprove the share option plan, which is attached as Exhibit A to the circular, including certain of the amendments to the plan as set forth in the circular. As described in the circular, among other things, the amendments to the option plan include a reduction in the maximum number of common shares issuable under the common share option plan from 10% of the issued and outstanding common shares to 8%, in line with recommended best practices for securities-based compensation arrangements. The option plan resolution is set out on Page 12 of the circular under Item 5. To obtain approval for the option plan resolution, the option plan resolutions must be passed by a majority of the votes cast at this meeting. May I have a motion that the option plan resolution as amended by the proposed amendments thereto be authorized and reapproved as the share option plan of the corporation, all as described in the circular?

I so move.

Thank you, Mary Beth. May I have the motion seconded?

Mr. Chairman, I second the motion.

Thank you, David. Before I call for a vote on the motion, have any questions relating specifically to this item been received?

Mr. Chairman, I confirm we have not received any questions from shareholders, specifically on this item.

Thank you. We will conduct the vote on the matter before us by online ballot. The polls relating to this specific motion will close in 15 seconds. [Voting]

I confirm the polls are now closed. Based on the preliminary voting results, I declare the motion carried. We will now move to the reapproval of the corporation's deferred share unit plan. The TSX rules also require that the deferred share unit plans be submitted for reapproval by shareholders every 3 years. Accordingly, shareholders are asked to reapprove the DSU plan, which is attached as Exhibit B to the circular. As described in the circular, among other things, the amendments to the deferred share unit plan include a reduction in the maximum number of common shares issuable under the DSU plan from 10% of the issued and outstanding common shares to 3%, in line with recommended best practices for securities-based compensation arrangements. The DSU plan resolution is set out on Page 13 of the circular under Item 6. To obtain approval for the DSU plan resolution, the DSU plan resolution must be passed by a majority of the votes cast at this meeting. May I have a motion that the DSU plan resolution be passed as an ordinary resolution of the shareholders of the corporation?

Mr. Chairman, I so move.

Thank you, Mary Beth. May I have the motion seconded?

I second the motion.

Thank you, David. Before I call for a vote on the motion, have any questions specifically related to this item been received?

Mr. Chairman, I confirm we have not received any questions from shareholders, specifically on this item.

Thank you, Michael. We will conduct the vote on this matter before us by online ballot. The polls relating to this specific motion will close in 15 seconds. [Voting]

I confirm the polls are now closed. Based on the preliminary voting results, I declare the motion carried. We will now move to the reapproval of the corporation's share unit plan, the TSX rules also require that the share unit plans be submitted for reapproval by shareholders every 3 years, including any amendments thereto. Accordingly, shareholders are asked to reapprove the share unit plan which is attached as Exhibit C to the circular, including certain of the amendments to the plan as set forth in the circular. As described in the circular, among other things, the amendments to the share unit plan include a reduction in the maximum number of common shares issuable under the share unit plan from 10% of the issued and outstanding common shares to 3%, in line with the recommended best practices for securities-based compensation arrangements. The unit plan resolution is set out on Pages 15 and 16 of the circular under Item 7. To obtain approval for the unit plan resolution, the unit plan resolution must be passed by a majority of the votes cast at this meeting. May I have a motion that the unit plan resolution to be passed as an ordinary resolution of the shareholders of the corporation?

I so move, Mr. Chairman.

Thank you, Mary Beth. May I have the motion seconded?

Mr. Chairman, I second the motion.

Thank you, David. Before I call for a vote on the motion, have any questions relating specifically to this item been received?

Mr. Chairman, I confirm we have not received any questions from shareholders, specifically on this item.

Thank you, Michael. We will conduct the vote on the matter before us by online ballot. The polls relating to the specific motion will close in 15 seconds. [Voting]

I confirm the polls are now closed. Based on the preliminary voting results, I declare the motion carried. That concludes the formal business brought before the meeting. There being no further business, I wish to thank you for attending, and I now declare this meeting to be terminated.

This concludes the meeting. You may now disconnect.