Open Text Corporation (OTEX) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders at OpenText Corporation. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Mr. Tom Jenkins, Chair of the Board. Tom Jenkins, the floor is yours.

Good morning, everyone, and welcome to the Annual Meeting of OpenText shareholders. I'm Tom Jenkins, Chair of OpenText. We have members of our Board of Directors, management and external auditors in attendance today and we look forward to meeting with you and answering questions about your company. The meeting is being conducted virtually, enabling greater participation by our shareholders by allowing shareholders that might otherwise be unable to travel to a physical meeting to attend online. Holding our meeting virtually means that I may pause from time to time to allow coordination from the speakers who are in different locations. I'll also pause at certain points during the meeting to provide an opportunity for you to vote or ask questions online. As in past years, we expect that the vast majority of all votes will have been cast in advance of the meeting by proxy. That said, registered shareholders and duly appointed proxy holders will be allowed to vote online at the meeting in accordance with the instructions to be provided. Given the virtual format of the meeting and in order for us to expeditiously undertake discussion on any matter proposed for a vote, we would encourage shareholders who have specific questions on a formal item of business to submit such questions now, clearly identifying the applicable item of formal business as well as your name and contact information. [Operator Instructions]. During the course of this meeting, at the appropriate time, such questions will be addressed prior to voting on the applicable motions. We will be following the agenda for the meeting displayed on your screens. First, we'll call the meeting to order and go through procedural matters. We have 5 matters of business to conduct today: the first being the presentation of the financial statement; the second, the election of directors; the third, the reappointment of the company's independent auditors; fourth, the nonbinding Say-on-Pay advisory resolution on the company's approach to executive compensation; and fifth, the approval of the continuance amendment and restatement of the shareholder rights plan. Following the formal meeting, we will have a Q&A session. If you have any questions on the business of this company, not specifically related to an item of business to be discussed in today's meeting, please feel free to submit those questions at any time, and they'll be considered at the conclusion of the meeting. Questions that are similar in nature or repetitive will be grouped together and addressed in a single response. When asking a question, please indicate your name and contact information. If we're unable to answer your question during the meeting, a member of our team will follow up with you after the meeting. I now call the meeting to order. This meeting has been convened pursuant to resolutions of the Board of Directors in accordance with the company's bylaws. I will act as Chair of the meeting. Michael Acedo, EVP, Chief Legal Offer and Corporate Secretary, will act as Secretary of the meeting. I appoint Computershare Investor Services through its representatives as scrutineer to compute the votes to the ballots taken at this meeting and report the results to me, which I will disclose after the close of polls. Before commencing with the procedural matters, I would like to call upon the Secretary to make the statement concerning today's remarks.

Thank you, Mr. Chairman. Please note that in the course of today's meeting, officers or directors of OpenText may, in their remarks or in response to questions during the question period, make statements which are forward-looking under the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities legislation. Certain material factors and assumptions are applied in making these statements, and there are a number of other factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of OpenText. Additional information concerning these factors and assumptions is contained in OpenText's filings with the United States Securities and Exchange Commission and the Canadian securities regulators, including OpenText's annual report on Form 10-K.

The Secretary has confirmed that the notice of this meeting was duly given in compliance with the applicable requirements. A copy of the notice of the meeting is available on our website and under our profile on SEDAR. I will dispense with the reading of the notice of this meeting. There has been filed with me proof of service of such mailing provided by the company's transfer agent. We have such proof of service be annexed in the minutes of this meeting as the schedule. I've been advised that there are persons present together holding or representing shares having not less than 33 1/3 of the outstanding votes entitled to be cast at this meeting. Therefore, a quorum of shareholders of the company is present, and the meeting is properly called and duly constituted for the transaction of business. I received the preliminary scrutineers' report, and I direct that their formal report following today's voting be annexed to the meeting -- minutes of this meeting as a schedule. To facilitate the meeting, I've requested that certain persons make and second, the formal motions, and I will call on these persons at the appropriate time. The voting of today's meeting will be conducted by online ballot. If you are a registered shareholder or a duly appointed proxy holder, that has already voted by proxy, there will be no need for you to vote online since your vote will be recorded in accordance with your proxy instructions. However, if you wish to change your previously submitted vote, you can simply vote when prompted. The polls will be open for all items of business to be voted on at this time. This will allow you to vote on each item immediately or if you prefer, you may wait until the conclusion of the discussion of each item prior to casting your vote. Once the polls have been opened, the items of business to be voted on and your available voting options will be visible on the voting panel, accessible at the top of your screen. To submit a vote please click on the voting choice displayed on your screen. You will see a vote received message confirming your vote has been taken. Once discussion has concluded on all items of business, you will have a moment to enter your votes. I will then declare voting closed on all matters of business. The summary of votes -- results of the vote will be announced prior to the close of the meeting. I now declare the polls open on all items of business. The first item of business is the presentation of the company's audited consolidated financial statements and the auditor's report thereon. The 2022 annual report to shareholders, including the company's 2022 audited consolidated financial statements and the auditor's report, were delivered to shareholders in advance of this meeting. Additional copies are available on our website and under our profile on SEDAR. If any shareholder or proxy holder has questions relating to the 2022 audited consolidated financial statements. These questions can be submitted at any time. It will be addressed after the formal business of the meeting concludes. The next item of business is the election of directors. The number of directors to be elected at this meeting is 11. The proxy circular for the meeting contains the names and backgrounds of the individuals who will be nominated by the company for election as directors. I'll now ask Mary Ann Valad to read the names of the nominees.

My name is Mary Ann Valad, and I nominate the following individuals for election as directors of the company: Thomas Jenkins, Mark Barrenechea, Randy Fowlie, David Fraser, Gail Hamilton, Robert Hau, Ann Powell, Stephen Sadler, Michael Slaunwhite, Katharine Stevenson and Deborah Weinstein.

Thank you. 11 directors are duly nominated. In accordance with the company's bylaws, I declare the nominations closed. May I have a motion to elect the nominees as directors of the company.

My name is Greg Secord, and I move that each of the individuals nominated for election at this meeting be elected a director to hold office until the close of the next Annual Meeting of Shareholders or until their successors are duly elected or appointed in accordance with the articles and bylaws of the company.

May I have the motion seconded?

My name is Gabrielle Sukman, and I second the motion.

At this time, I would ask the Secretary to please advise of any questions received on this item of business.

Mr. Chairman, I will pause for a moment to allow for questions to be submitted. Mr. Chairman, I confirm that we have not received any further questions specifically on this item of business.

Thank you. As previously noted, we will conduct a vote on this motion by way of online ballot. Registered shareholders or their duly appointed proxy holders can vote throughout this meeting by online ballot by selecting the applicable voting options on the voting panel displayed on their screens. If you have previously submitted a completed proxy, you will have voted in respect of the 11 nominated candidates and it's not necessary to vote again on this ballot. You may vote for up to 11 nominees. Only those individuals that have been nominated are eligible for election. At least 25% of the directors elected must be resident Canadians. In accordance with the Canadian Business Corporations Act and the company's majority voting policy for director elections, each nominee must be elected by receiving a greater number of votes for their election than votes against at this meeting. The next item of business is the appointment of independent auditors of the company. May I have a motion that KPMG LLP, Chartered Accounts be reappointed as independent auditors.

My name is Mary Ann Valad and I move that KPMG LLP, Chartered Accountants be appointed the independent auditors of the company to hold office until the close of business at the next Annual Meeting of the Shareholders.

May I have the motion seconded?

My name is Greg Secord, and I second the motion.

Thank you. In order to be carried, this motion must be passed by a majority of the votes cast at this meeting. At this time, I would ask the Secretary to please advise of any questions received on this item of business.

Mr. Chairman, I will pause again for a moment to allow for questions to be submitted. Mr. Chairman, I confirm that we have not received any questions specifically on this item of business.

Thank you. As previously noted, we will conduct a vote on this motion by way of online ballot. Registered shareholders or their duly appointed proxy holders can vote throughout this meeting by online ballot by selecting the applicable voting option on the voting panel displayed on their screens. If you have previously submitted a completed proxy, you will have voted in respect of the appointment of the auditor, it's not necessary to vote again on this ballot. The next item of business is the nonbinding Say-on-Pay advisory resolution on the company's approach to executive compensation. The proxy circular for this meeting contains the description of the Say-on-Pay advisory vote, along with the full text of the Say-on-Pay advisory resolution. The vote is advisory only and nonbinding on the company and the Board of Directors. In order to be approved, the Say-on-Pay advisory resolution must be passed by a majority of the votes cast at this meeting. May I have a motion that the Say-on-Pay advisory resolution in the form set out on Page 25 of the proxy circular be passed as a resolution of the company.

My name is Greg Secord, and I move that the Say-on-Pay advisory resolution on the company's approach to executive compensation be approved.

May I have the motion seconded.

My name is Mary Ann Valad, and I second the motion.

At this time, I would ask the Secretary to please advise if there are any questions received on this item of business.

Mr. Chairman, I will pause for a moment to allow for questions to be submitted. Mr. Chairman, I confirm that we have not received any further questions specifically on this item of business.

Thank you. As previously noted, we'll conduct a vote on this motion by way of online ballot. Registered shareholders or their duly appointed proxy holders can vote throughout this meeting by online ballot by selecting the applicable voting options on the voting panel displayed on their screens. If you have previously submitted a completed proxy, you will have voted in respect of this motion, and it's not necessary to vote again on this ballot. The next item of business is the approval of the continuance amendment and restatement of the company's shareholder rights plan. The terms and conditions of the shareholders' rights plan including the proposed amendments that are described in the proxy circular. The shareholder rights plan requires reapproval every 3 years and was previously approved by the shareholders at the company's Annual and Special Meeting of Shareholders on September 4, 2019. The Board of Directors of the company believes that the continuation, amendment and restatement of the company's shareholder rights plan is in the best interest of the company. In order for the continuation, amendment and restatement of the company's shareholder rights plan to be approved, a resolution must be passed by a simple majority of votes cast by all shareholders at the meeting and a simple majority of votes cast by the independent shareholders at the meeting as defined in the current shareholder rights plan. An independent shareholder is generally any shareholder other than an acquiring person as defined in the shareholder rights plan and its associates and affiliates. The company is not aware of any shareholder that would be considered an independent shareholder and therefore, all shareholders are eligible to vote their common shares on this resolution. May I have a motion for the resolution approving the continuation, amendment, restatement of the shareholder rates plan in the form attached as Schedule B to the proxy circular to be passed as a resolution of the company.

I move that the resolution approving the continuation, amendment and restatement of the shareholder rights plan be approved.

May I have the motion seconded?

I second the motion.

At this time, I would ask the Secretary to please advise of any questions received on this item of business.

Mr. Chairman, I will pause again for a moment to allow for questions to be submitted. Mr. Chairman, I confirm that we have not received any further questions specifically on this item of business.

Thank you. As previously noted, we will conduct the vote on this motion by way of online ballot. Registered shareholders or their duly appointed proxy holders can vote throughout this meeting by online ballot by selecting the applicable voting option on the voting panel displayed on their screens. If you have previously submitted a completed proxy, you will have voted in respect of the continuation amendment and restatement of the shareholder rights plan, and it's not necessary to vote again on this ballot. We will now proceed with the process for completing the voting on the items of the business of the meeting. For those of you that have not voted on all the items of business yet, please do so now. If you have previously submitted a completed proxy, you will have voted in respect to the formal business of the meeting, and it's not necessary to vote again via online ballot. We'll now take a short break to allow shareholders to complete the voting on all items of business and to allow the results to be tabulated by the scrutineer. [Voting]

Mr. Chairman, the voting is now complete, and the polls are closed.

Operator just standby please. Tom, If you can continue on the other -- I'm sorry, Michael, please go right ahead.

I would note for the -- to the transfer agent and the shareholders. Our Chair is having a technical difficulty. And so our Vice Chair and CEO will pick up the meeting and conclude the remarks now that the polls are closed. Thank you. Mr. Barrenechea?

Yes, thank you. Tom, we have a second mechanism here. Can we hear you through Teams, Tom. Tom, over to Tom our Chair. Yes. Unfortunately, we can't hear our Chair at this moment. So as Michael Acedo noted, I will conclude today's meeting. So on behalf of our Chair, that concludes voting at today's meeting, the scrutineer has now reported on all matters put to a ballot at this meeting. I declare that each of the 11 directors nominated is hereby elected to serve as the Director of the company to hold office until the next Annual Meeting of Shareholders of the company or until his or her successor is duly elected or appointed in accordance with the articles and bylaws of the company. I declare the motion on the reappointment of the company's auditors to have passed. I declare the motion on the Say-on-Pay advisory resolution on the company's approach to executive compensation has not been passed. Accordingly, the Board will take the results of the vote into account as it is deemed -- as it deems appropriate when considering future compensation policies, procedures and decisions. I declare the motion on the continuance, amendment and restatement of the company's shareholder rights plan to have passed. A report disclosing the voting results in respect to each applicable item of business will be filed on SEDAR promptly following the meeting and a report of the election of each director will be disclosed in a press release to be issued following the meeting. That concludes the formal business brought before the meeting, and I, therefore, declare the meeting to be terminated. Have we been able to solve the technology issue with the Chair, if there are any final words? Very good. Now that the formal part of the meeting has been concluded, we'd be pleased to answer any of the questions that you may have. [Operator Instructions]. We will now give attendees a moment to type in their questions. For each question we answer, we'll summarize the question and read out loud the name of the person who asked the question. And if applicable, the company -- such person represents. We'd like to remind you that the questions which were already answered or that are redundant or repetitive will not be answered. I'd ask the Secretary to please advise if there are any questions.

Thank you, Mr. Chair, and Vice Chair. I confirm that we have north received any further questions.

That is all for today. I'd like to thank you on behalf of our Chair and myself, Vice Chair for participating in the business of the meeting and for your interest in the company.

This concludes the meeting. You may now disconnect.