Haivision Systems Inc. (HAI) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of Haivision Systems Inc. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use the same. If you disclose personal information of another person in today's meeting, you'll be deemed to represent and warrant to Computershare and Haivision that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before you disclose. It is now my pleasure to turn today's meeting over to Mr. Mirko Wicha, the Chairman, President and Chief Executive Officer of Haivision Systems Inc. Mr. Wicha, the floor is yours.

Thank you, operator. Good morning, everyone. I'm Miroslav Wicha, Chairman, President and Chief Executive Officer of Haivision Systems. Welcome to Haivision's Annual Meeting of Shareholders. Today's meeting is being held virtually to enfranchise and give all shareholders an equal opportunity to attend the meeting regardless of their geographic location. The matters to be considered at today's meetings are: The receipt of Haivision's audited consolidated financial statements for the financial year ended October 31, 2022, together with the report of the auditor thereon. The election of the Directors of Haivision for the ensuing year, the appointment of Deloitte LLP as the auditor of Haivision and authorization for the Board of Directors to determine the remuneration to be paid to the auditor, the approval of the unallocated awards under the Haivision's equity incentive plan; the approval of the shareholders' rights plan and any other matters which may properly be brought before the meeting. During the meeting, registered shareholders and duly appointed and registered proxy holders may at any time submit questions or communicate with the Chair and the Secretary by clicking on the Q&A icon, typing in and submitting their question or comment. If you're attending as a guest, you will not be able to ask questions during the meeting. Questions or comments that are not addressed to the chair, if any, will be made visible to all shareholders, and the message icon can be used by shareholders to communicate with each other. However, we would encourage you to only send questions addressed to the Chair. Given the virtual format of the meeting and in order for us to expediently address as many questions as we can, we would encourage shareholders to have a specific question on the items of business we discussed and voted on at today's meeting to submit their questions now. If you have further questions not specifically relating to the items of business to be discussed at today's meeting, please feel free to submit those questions at any time as they will be addressed at the conclusion of the meeting. Appointment of Chair and Secretary. So with the consent of the meeting, I will act as Chair of the meeting and in accordance with the current bylaws of Haivision, Mr. Rabinowitz will act as the Secretary of the meeting. I will now pause 10 seconds. If there are any questions and ask Mr. Rabinowitz who is also monitoring the questions, to let me know if there are any questions.

No, Mr. Chairman, there are no questions.

Appointment of scrutineer. With the consent of the meeting, Pina Pacifico of Computershare Investor Services Inc. will act as a scrutineer of the meeting. I will now pause 10 seconds if there are any questions and ask Mr. Rabinowitz to let me know if there are any questions.

No, Mr. Chairman, there are no questions.

Thank you. Notice of the meeting. I have received an affidavit from Computershare as to the due mailing to shareholders of the notice calling the Annual Meeting of Shareholders and the formal proxy for the meeting. The management information circular for the meeting, together with the 2022 annual financial statements and related audit reports were made available through the notice and access system of the Canadian securities regulators. They are also available on SEDAR and on the website [ envisionreports.com ], I request that a copy of the notice of the annual meeting of shareholders, together with the affidavit attesting to the mailing of the notice and the form of proxy be kept by the Secretary with the records of the meeting. The scrutineers has provided a report regarding shareholder attendance at the meeting. Based on the preliminary tabulation of proxies received to date, the scrutineer reports that a quorum is present. I accept the scrutineer's report and declare that a quorum of shareholders is present. I also declare that this meeting to be properly called and duly constituted for the transaction of business. The scrutineers' report will be provided to the Secretary of the meeting and will be incorporated into the minutes of this meeting. Before we consider the business of the meeting, I would like to comment on the voting procedures to be used at today's meeting. To facilitate the formal business of the meeting, Bastien Gauthier will propose and Jean-Philippe Bertrand will second the formal motions. Each of Mr. Gauthier and Mr. Bertrand have been duly appointed as proxy holders. At this meeting, each share held as of record date is entitled to 1 vote. If you have voted your shares prior to the start of the meeting, your vote has been received by Haivision scrutineer, and there is no need to vote those shares during the meeting unless you wish to revoke or change your vote. As such, if you have already voted and you do not wish to revoke or change your vote, please do not vote during this meeting. In order to streamline the voting procedure, we will now open the poll. And at any time during the meeting, registered shareholders who have not already provided voting instructions or appointed a proxy holder that are logged on and wish to vote their shares may do so by clicking on the Vote tab on your screen. Duly appointed and registered proxy holders may also vote now using the same method. The polls will remain open until just before the conclusion need to vote deal shares during the meeting unless you wish to revoke or change your vote. As such, if you have already voted and you do not wish to revoke or change your vote, please do not vote during this meeting. In order to streamline the voting procedure, we will now open the poll. And at any time during the meeting, registered shareholders who have not already provided voting instructions or a point or proxy holder that are logged on and wish to vote their shares may do so by clicking on the Vote tab on your screen. Duly appointed and registered proxy holders may also vote now using the same method. The polls will remain open until just before the conclusion of the formal business of the meeting. If you are attending this meeting as a guest, you will not be able to vote or ask questions during the meeting. Financial statements and the auditor's report. The first item of business is the presentation of the audited consolidated annual financial statements of Haivision for the year ended October 31, 2022. Together with the auditor's report thereon. The financial statements are available under Haivision's profile on SEDAR and on Haivision's website. They can also be accessed via the web portal. I now present to the meeting the financial statements together with the auditor's report thereon. I ask the secretary to keep a copy of these statements with the minutes of this meeting. Election of the Directors. The next item of business is the election of Directors to the Board of Directors for a term expiring at the close of the next annual meeting of shareholders in 2024 or until their prospective respective successors are elected or appointed or they otherwise cease to hold office. As stated in the management information circular prepared and filed to this meeting, 7 Directors are to be elected at the meeting. 7 Directors are named in the Management Information Circular. The Board of Directors of Haivision unanimously recommends that shareholders will vote in favor of the election of each of the 7 proposed nominees. Mr. Gauthier, would you please propose the nominations for the election of Directors?

Mr. Chairman, my name is Bastien Gauthier. I am the proxy holder appointed by a shareholder of Haivision. I nominate the following persons for election as Directors of Haivision to hold office for a term to expire immediately following the Annual Meeting of Shareholders in 2024 or until their respective successors are elected or appointed or they otherwise cease to hold office. Harvey Bienenstock, Neil Hindle, Sidney Horn, Lee K. Levy, Robin Rush, Julie Tremblay, Miroslav Wicha.

Mr. Bertrand, would you please second the motion?

I second the motion.

Thank you. As no notice of additional Director nominees was received in accordance with Haivision's advanced notice bylaw, I declare nominations closed. Mr. Rabinowitz, have we received any questions relating to this item of business?

No, Mr. Chairman, there are no questions.

Thank you. As a reminder to shareholders and proxy holders voting at the meeting, to vote on this item of business, you will find listed the names of the 7 nominees for election to the Board of Directors listed in the management information circular. For each nominee, you may vote for or against from voting in respect of that nominee. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter. I've been advised by the Secretary based on the scrutineer's report that a significant majority of the proxies received by management prior to the meeting have been voted for the election of each of the persons nominated to serve as Directors. I will announce the voting results after all other material business have been voted on. You can cast your vote until I announce that polls are closed. The next item of business is the appointment of Haivision's auditor for the ensuing year and authorizing the Board of Directors of Haivision to fix the auditor's remuneration. The Board unanimously recommends that the shareholders vote in favor of the appointment of Deloitte LLP as the auditor of Haivision and its subsidiaries for the ensuing year and to authorize the Board to fix the remuneration of the auditor. Mr. Gauthier, would you please make a motion?

Mr. Chairman, I move that Deloitte LLP be appointed as the auditor of Haivision to hold the office until the next Annual Meeting of Shareholders or until their successors are appointed and that the Board of Directors of Haivision be authorized to fix its compensation.

Mr. Bertrand, would you please second the motion?

I second the motion.

The motion has been made and seconded to appoint Deloitte LLP as Haivision's auditor and to authorize the Board of Directors of Haivision to fix its remuneration. Mr. Rabinowitz have we received any questions relating to this item of business?

No, Mr. Chairman, there are no questions.

Thank you. As a reminder to shareholders and proxy holders voting at the meeting, to vote on this item of business, you may vote for or withhold from voting in respect of this motion. You may not vote for any accounting firm other than Deloitte LLP. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter. I have been advised by the Secretary based on the scrutineer's report that a significant majority of the proxies received by management prior to the meeting has been voted for the motion. The next item of business is the consideration of an ordinary resolution approving unallocated awards under Haivision's equity incentive plan, the full text of which can be found on our website at www.haivision.com and a summary of the key terms, which can be found on Page 24 on our Management Information Circular. As our equity incentive plan does not include a fixed maximum number of common shares that can be issued in settlement of awards, these unallocated awards must be approved by shareholders every 3 years under Toronto Stock Exchange rules. The resolution approving the equity incentive plan unallocated awards must be approved by at least a majority of the votes cast at the meeting. The Board unanimously recommends that the shareholders vote in favor of the equity incentive plan and allocated awards resolution. Mr. Gauthier, will you please make a motion?

Mr. Chairman, I move that the resolution approving and authorizing all common shares, which may be issuable pursuant to the unallocated awards under Haivision's equity incentive plan be approved and authorized to be granted and issued until April 26, 2026, [ the all ] as further described in Appendix B of the Management Information Circular prepared for the meeting.

Mr. Bertrand, would you please second the motion?

I second the motion.

Thank you. Mr. Rabinowitz, have we received any questions related to this item of business?

No, Mr. Chairman, there are no questions.

Thank you. As a reminder to shareholders and proxy holders voting at the meeting, you may vote for or against in respect of this motion. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter. I've been advised by the Secretary based on the scrutineer's report that a significant majority of the proxies received by management prior to the meeting had been voted for the motion. The final item of business is the consideration of an ordinary resolution approving Haivision's shareholder rights plan, the full text of which can be found on SEDAR at www.sedar.com under the Haivision's profile and a summary of the key terms, which can be found on Page 15 on our Management Information Circular. Shareholder rights plans have been adopted and reconfirmed by a large number of publicly held corporations in Canada. And as such, plans are now well-established strategy used by company to permit sufficient time to assess and respond to an unsolicited takeover bid. The Board reviewed Haivision's shareholder rights plan for conformity with current practices of Canadian issuers and has confirmed that the terms of the proposed shareholder rights plan are substantially similar to those plans. Based on its review, the Board has concluded that the adoption of the shareholder rights plan is in the best interest of Haivision and its shareholders. And as such, it adopted the shareholder rights plan on March 17. The resolution approving the shareholder rights plan must be approved by at least a majority of the votes cast at the meeting. The Board unanimously recommends that the shareholders vote in favor of the shareholder rights resolution. Mr. Gauthier, would you please make a motion?

Mr. Chairman, I move that the shareholder rights plan between Haivision and Computershare Investor Services Inc. dated March 17, 2023, and the issuance of all rights issued pursuant to such shareholder rights plan be confirmed and approved, [ the all ], as further described in Appendix C to the management information circular prepared for the meeting.

Mr. Bertrand, will you please second the motion?

I second the motion.

Thank you. Mr. Rabinowitz, have we received any questions related to this item of the business?

Now Mr. Chairman, there are no questions.

Thank you. As a reminder to shareholders and proxy holders voting at the meeting, you may vote for or against in respect of this motion. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter. I've been advised by the Secretary based on the scrutineer's report that a significant majority of the proxies received by management prior to the meeting have been voted for the motion. We will now wait 1 minute to allow shareholders to submit their votes. We will then close the polls. Okay. [Voting]

The polls are now closed with respect to voting on all of the motions. Mr. Rabinowitz, could you please provide the preliminary voting results?

Mr. Chairman, based on the preliminary report of the scrutineer, all items voted upon at the meeting have received more than the number of votes required, and therefore, all items are passed. The final voting results will be posted online on SEDAR at www.sedar.com under Haivision's profile.

Thank you, Mr. Rabinowitz. In light of the results of the voting, I now declare that the 7 Director nominees named in the Management Information Circular have been duly elected as Directors. That Deloitte LLP is appointed as auditor of Haivision until the next annual meeting or until their successors are appointed and that the Board of Directors of Haivision is authorized to fix its remuneration. That the allocated awards under Haivision's equity incentive plan have been approved and the shareholder rights plan has been approved. A final report to be furnished by the scrutineers subsequent to the meeting will be incorporated into the minutes of the meeting. Is there any other business that may be properly brought before this meeting? I will now pause for 20 seconds. If there are any questions and ask Mr. Rabinowitz, who is also monitoring the questions to let me know if there are any matters of business to come before the meeting.

No, Mr. Chairman, there are no questions.

Thank you. Since there are no other matters of business to come before the formal part of the meeting, I declare the meeting concluded and terminated. This concludes the formal part of the meeting. Thank you all for attending our virtual meeting today.

This concludes the meeting. You may now disconnect.