Jamieson Wellness Inc. (JWEL) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the 2023 Annual and Special Meeting of Shareholders of Jamieson Wellness, Inc. Please note that today's meeting is being recorded. On the call today from the Jamieson Wellness Board of Directors and management team are: Tim Penner, Chair of the Board; Michael Pilato, President and Chief Executive Officer; and Chris Snowden, Chief Financial Officer and Corporate Security. Before I turn the call over to Mr. Penner, please note that the presentation, which will follow the formal portion of the meeting, contains forward-looking statements and additional forward-looking statements may be made in response to your questions during the Q&A portion of the meeting. These statements reflect the company's current expectations regarding future events. Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond the company's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the factors discussed in Jamieson's filings with the Canadian Securities Administrators. These statements do not guarantee future performance and therefore, undue reliance should not be placed upon them. The company does not undertake any obligation to update the forward-looking statements made during this meeting, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Finally, we would like to remind listeners that the company may refer to certain non-IFRS and other financial measures during this audio webcast. For further details on non-IFRS and other financial measures, including relevant definitions and certain reconciliations, see Jamieson's filings with the Canadian Securities Administrators. Also, please note that unless otherwise stated, all figures discussed today are in Canadian dollars and are occasionally rounded to the nearest million. [Operator Instructions] It is now my pleasure to turn today's meeting over to Tim Penner, Chair of the Board. The floor is yours.

Good afternoon. My name is Tim Penner, Chair of the Board of Directors and I would like to welcome you to this Annual and Special Meeting of the holders of common shares of Jamieson Wellness Inc., which I will refer to today as Jamieson. For those of you who are shareholders, thank you for joining us today. We also welcome all other guests in attendance. I have with me today Michael Pilato, our President and Chief Executive Officer; and Chris Snowden, Chief Financial Officer and Corporate Secretary of Jamieson. We are pleased to be able to meet in person with our shareholders again after 3 years of virtual meetings. Jamieson has been carefully monitoring COVID-19 pandemic and the associated public health restrictions, and we decided to hold this meeting in a hybrid format. This will allow shareholders the option to participate in the meeting virtually if they desire. The health and safety of our communities, shareholders, employees and other stakeholders is of paramount importance to us. And our main objective in hosting a hybrid meeting is to ensure that all shareholders have the same opportunities to participate and vote regardless of their geographic location or the particular constraints, circumstances or risks that they may be facing. The purpose of this meeting is as follows: one, to receive Jamieson's financial statements for the year ended December 31, 2022, and the auditor's report thereon; two, to reappoint Ernst & Young LLP as the auditors for Jamieson for the ensuing year and authorize the directors to fix their remuneration; three, to elect the Board of Directors of Jamieson for the ensuing year; four, to consider and, if deemed advisable, approve, with or without variation, an ordinary resolution approving, ratifying and confirming the adoption of Jamieson's fourth amended and restated long-term incentive plan and the unallocated options, rights or other entitlements thereunder; five, to consider and, if deemed advisable, approve with or without variation, an ordinary resolution approving, ratifying and confirming the unallocated options, rights or other entitlements under Jamieson's employee share purchase plan; and six, to consider and if deemed advisable, approve an advisory resolution on Jamieson's approach to executive compensation. These matters are set out in the company's Management Information Circular made available to shareholders in connection with this meeting. Jamieson elected to send out proxy-related materials for this meeting to shareholders using the notice and access provisions under National Instrument 51-102, Continuous disclosure obligations and National Instrument 54-101, Communications with beneficial owners of securities of a reporting issuer. I will refer to these provisions in this meeting as notice and access provisions. After the formal part of the meeting, Mike will be making some remarks, and we will follow that with a question period should you wish to ask any questions of him. As this meeting is a hybrid meeting held in part virtually via live webcast, we think it's necessary to set out a few rules applicable to those joining us virtually for the orderly conduct of business. One, questions can be submitted using the instant messaging service of the virtual interface. Please note that only registered shareholders or duly appointed proxyholders are entitled to submit questions in respect of a motion during the formal part of the meeting. Two, when asking a question, please indicate your name, which entity you represent, if any, and confirm whether you are a registered shareholder or a duly appointed proxyholder. For each question we answer, we will summarize the question and read out loud the name of the person who asked such question, and if applicable, the entity such person represents. Number three, questions may be submitted during the formal part of the meeting but will only be addressed during the question period at the end of the meeting. However, questions regarding procedural matters or directly related to motions before the meeting may be addressed during the meeting. Number four, for the purposes of those joining the meeting today virtually, voting on all matters will be conducted by electronic ballot. The online voting is open for all resolutions at this time. Registered shareholders and duly appointed proxyholders will be asked to vote on each item of business. If you are a beneficial owner of common shares and have not appointed yourself as a proxyholder and are, therefore, attending this meeting as a guest, you will not be entitled to vote. And number five, when you vote online, you will receive a message on the virtual interface requesting you to register your votes. You will only be permitted to vote while the polls are open. If you use your control number to log into the meeting, any vote you cast at the meeting will revoke any proxy you previously submitted. If you do not wish to revoke a previously submitted proxy, you should not vote at the meeting. There will also be opportunities during the meeting for a shareholder or proxyholder present with us in person to address the meeting. In that event, I would ask the shareholder or proxyholder who wishes to address the meeting to identify themselves by name prior to addressing the meeting. For those registered and duly appointed proxyholders voting in person at today's meeting, the form of ballot includes each item of business being voted on by ballot. You will be provided with a few moments to complete your ballot when each item of business is considered. To complete your ballot, please print your name and sign where indicated. If you are a proxyholder, please indicate the name of the shareholder for whom you have been appointed proxy to vote and indicate in the appropriate boxes whether you are for, against or choose to withhold by placing an X in the appropriate places on the ballot. We will now proceed with the formal portion of today's meeting. I will act as Chair of the meeting; and Chris Snowden, Jamieson's Chief Financial Officer and Corporate Secretary, will act as Secretary. With the consent of the meeting, I appoint Computershare Investor Services Inc. through its representatives as scrutineer to compute the votes of any polls taken at this meeting and to report thereon to me as Chair. The Notice calling this meeting, the accompanying Management Information Circular dated March 23, 2023, the consolidated financial statements for the years ended December 31, 2022 and 2021 and auditor's report thereon and the form of proxy have been provided to each shareholder of Jamieson of record at the close of business on March 20, 2023, by mail or electronically in accordance with the notice and access provisions. And I have been advised by Computershare Investor Services Inc. and have been provided with an affidavit of mailing confirming that the Notice calling this meeting, together with a form of proxy were mailed to each shareholder of record at the close of business on April 10, 2023. With the consent of the meeting, reading of the Notice of the Meeting will be dispensed with. I therefore declare that proper notice of this meeting has been given. A quorum of shareholders is at least 2 holders of common shares present in person or by telephonic or electronic means and holding or representing by proxy not less than 25% of the votes entitled to be cast at the meeting. I have received the preliminary report on attendance from the scrutineer and have determined that a quorum is present. I adopt this report and as notice has been served in accordance with the Ontario Business Corporations Act and the bylaws, I declare this meeting to be regularly called and properly constituted for the transaction of business. On behalf of the Board, I thank those shareholders who have chosen to attend the meeting in person and virtually today. I also thank those who submitted their proxies in advance. In order to have the meeting proceed efficiently, certain individuals have been asked to move and second the motions, which are to be called for the Notice of the Meeting. This is not intended to limit in any way your right to participate in the meeting. Shareholders who wish to make comments relating to the motion may do so after the motion has been seconded. The first item of business is to put before the meeting Jamieson's financial statements for the fiscal year ended December 31, 2022, and the auditor's report thereon. Those financial statements, together with the auditor's report thereon and forming part of the 2022 annual report, were made available to all shareholders of Jamieson by mail or electronically in accordance with the notice and access provisions. We would be pleased to receive any questions you may have regarding the financial statements during the question period later in this meeting. We will dispense with the reading of the financial statements and the auditor's report thereon. The next item of business is the appointment of auditors for the ensuing year and the authorization of the directors to fix their remuneration. May I have a motion, please?

Mr. Chairman, my name is Stephen Pirak, and I'm a shareholder. I move that Ernst & Young LLP, chartered accountants, be reappointed auditors of Jamieson to hold office until the close of the next Annual Meeting of Shareholders or until their successors are appointed as such remuneration as may be fixed by the directors and the directors are authorized to fix such remuneration.

My name is Julia Filice. I'm a shareholder. I second the motion.

You have heard the motion duly made and seconded. Unless there are any questions, I will move to the next item of business. The third item of business is the election of directors. Pursuant to Jamieson's articles, there can, at any time, be a minimum of 3 and a maximum of 10 directors of Jamieson. As described in the Management Information Circular made available to shareholders in connection with this meeting, there are 7 nominee directors for election as directors. The nominees are: Heather Allen; Lou Aronne; Tania Clarke, Michael Pilato; Timothy Penner; Catherine Potechin; Mei Ye. I will now nominate the directors. I nominate each of the persons whose name appears in the Management Information Circular, under the heading Election of Directors, to be a director of Jamieson until the close of the next Annual Meeting of Shareholders or until their successors are appointed. I am advised that each of the nominees is present -- is either present in person or has consented in writing to act as a director of Jamieson. It is now in order for someone to move and someone to second a resolution electing those nominated as directors of Jamieson.

Mr. Chairman, my name is [ Arusha Keel ] and I am a shareholder. I move that the persons who have been nominated for election as directors be elected as directors of Jamieson for the ensuing year or until their successors are elected or appointed.

My name is Stephen Pirak, and I am a shareholder. I second the motion.

You've heard the motion duly made and seconded. As you know, Jamieson allows for the election of directors on an individual basis. According to our majority voting policy, any nominee who received a greater number of votes withheld than votes for cast with respect to his or her election by the shareholders is an uncontested election of -- in an uncontested election of directors, will tender his or her resignation promptly to the Governance Compensation and Nominating Committee, which will recommend to the Board whether or not to accept such resignation. I should advise the meeting that by virtue of votes already received by proxy, it is clear that all directors will receive more than enough votes to be elected today. I would like to advise the meeting that Jamieson did not receive any further nominations in accordance with its bylaws. I declare the nominations closed. I declare this motion to be carried and Heather Allen; Lou Aronne; Tania Clarke; Michael Pilato; Tim Penner; Catherine Potechin; Mei Ye, to have been elected as directors of Jamieson for the ensuing year or until their successors are elected or appointed. The next item of business is to consider, and if deemed advisable, to approve, with or without variation, an ordinary resolution approving, ratifying and confirming the adoption of Jamieson's fourth amended and restated long-term incentive plan and the unallocated options, rights or other entitlements thereunder. Please note that the company's third amended and restated long-term incentive plan was filed on SEDAR and appended to the Management Information Circular dated March 23, 2023. Having considered a recommendation made by institutional shareholder services, following the date of the Management Information Circular, the Board of Directors of Jamieson approved an amendment to the third amended and restated long-term incentive plan. The amendment decreases the maximum number of shares that may be subject to awards under Jamieson's fourth amended and restated long-term incentive plan and legacy option plan from 8.9% to 8.7% of the issued shares outstanding from time to time. The fourth amended and restated long-term incentive plan has been conditionally approved by the Toronto Stock Exchange. Pursuant to the policies of the Toronto Stock Exchange, the unallocated options, rights or other entitlements under a security-based compensation arrangement, such as the fourth amended and restated long-term incentive plan, must be approved every 3 years. The full text of the amended and restated LTIP resolution is set out in Schedule A to the Management Information Circular. May I have a motion, please?

Mr. Chairman, my name is Julia Filice, and I'm a shareholder. I move that the amended and restated LTIP resolution set out in the Schedule A to Jamieson's Management Information Circular dated March 23, 2023, with respect to the fourth amended and restated long-term incentive plan be approved.

My name is [ Arusha Keel ] and I am a shareholder. I second the motion.

You have heard the motion duly made and seconded. Unless there are any questions, I will move to the next item of business. The next item of business is to consider, with or without variation, an ordinary resolution approving, ratifying and confirming the unallocated options, rights or other entitlements under Jamieson's employee share purchase plan. Pursuant to the policies of the Toronto Stock Exchange, the unallocated options, rights or other entitlements under a security-based compensation arrangement, such as the employee share purchase plan, must be approved every 3 years. The full text of the amended and restated employee share purchase plan resolution is set out in Schedule B of the Management Information Circular. May I have a motion, please?

Mr. Chairman, my name is Stephen Pirak and I'm a shareholder. I move that the amended and restated employee share purchase plan resolution set out in Schedule B to Jamieson's Management Information Circular dated March 23, 2023, be approved.

My name is Julia Filice and I am a shareholder. I second the motion.

You have heard the motion duly made and seconded. Unless there are any questions, I will move to the next item of business. The next item of business is to consider an advisory resolution approving Jamieson's approach to executive compensation as disclosed in the Management Information Circular under the heading Compensation of Executive Officers. Each year, the Board of Directors offers shareholders the opportunity to cast at each Annual General Shareholder meeting an advisory vote on Jamieson's approach to executive compensation. As this is an advisory vote, the Board will not be bound by the results of the vote. However, the Board will take the results of the vote into account, together with feedback received from shareholders when considering its approach to executive compensation in the future. May I have a motion, please?

Mr. Chairman, my name is [ Arusha Keel ] and I'm a shareholder. I move that the advisory say-on-pay resolution set out in Schedule C to Jamieson's Management Information circulated (sic) [ Circular dated ] March 23, 2023 be approved.

My name is Stephen Pirak and I'm a shareholder. I second the motion.

Unless there are any questions, I will move on to the voting process. As I mentioned earlier, voting today will be conducted both in person and online. Voting on all resolutions will be by way of ballot: physical for those attending in person; and electronic for those attending virtually. The balloting is open to registered holders and appointed proxyholders. For those attending in person who wish to cast their votes, please complete a ballot and submit it to the scrutineer. Copies of the ballot can be obtained from the scrutineer. For those attending online, please register your votes by accessing the voting page and selecting the for or withhold buttons next to the name of each proposed director and next to the resolution with respect to the reappointment of Ernst & Young LLP as Jamieson's auditors. Please select the for or against buttons with respect to the approval of the amended and restated LTIP resolution; next to the resolution with respect to the approval of the amended employee share purchase plan resolution; and next to the resolution with respect to the advisory vote on Jamieson's approach to executive compensation. If you have not already submitted your ballot in person or voted online, as applicable, please complete your ballot now. We will give you 1 more minute. Ruth Winker, Senior Director of Corporate Affairs; of Jamieson will confirm for us when the polls have closed. [Voting]

The polls are now closed.