- With 24.66% of common shares already voted to WITHHOLD on four
directors, the entrenched Board refuses to engage with its largest
shareholders and co-founders
- Unwillingness to have a constructive conversation not only
unnecessarily delays inevitable change but comes at the expense of
shareholders’ time, money and resources
Despite strong support for change to the board of directors (the
“Board”) of Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX:
CWBHF) (“Charlotte’s Web” or the “Company”) ahead of the annual
general meeting of shareholders scheduled to be held on June 15,
2023 (the “Meeting”), the Board has refused to engage with Jesse
and Joel Stanley (the “Concerned Shareholders”), co-founders of
Charlotte’s Web, instead telling them to talk to the Company’s
lawyers.
“One of the number one responsibilities of a director is to
engage with their shareholders, understand their views, and, while
those views may differ, engage in a constructive dialogue for the
betterment of all shareholders. On all accounts this Board has
failed,” said Jesse Stanley, co-founder of the Company. “We would
like to thank the shareholders who have reached out to us since we
made our desire for change public. We share both their surprise and
disappointment that, rather than facilitate a smooth and
cost-efficient transition, the Board has been silent. Shareholders
are justifiably concerned about what costly entrenchment tactics
the Board may employ in an attempt to delay inevitable change
supported by the founders and largest shareholder group.”
On June 12, 2023, following a weekend of silence from the
Company, the Concerned Shareholders were forced to announce in a
press release that they have submitted instructions to “WITHHOLD”
votes for four of six of the Company’s director nominees – namely,
John Held, Jacques Tortoroli, Thomas Lardieri and Alicia Morga (the
“Subject Directors”). Certain supporting shareholders (the
“Supporting Shareholders”) have also submitted instructions to
“WITHHOLD” votes for the Subject Directors ahead of the
Meeting.
The Concerned Shareholders and the Supporting Shareholders
collectively represent 24.66% of the common shares of the Company
(“Common Shares”) entitled to vote at the Meeting. This represents
a significant majority of those shareholders expected to be
represented at the Meeting given the historical voter turnout for
the election of directors and indicates that change is
imminent.
The Concerned Shareholders have proposed to the Company that
Subject Directors not stand for election, and the Board waive the
Company’s advance notice requirements, which would allow the
Concerned Shareholders to nominate Joel Stanley, Jesse Stanley,
Lynn Kehler and Angela McElwee for election as directors of the
Company at the Meeting.
“We believe that with the right leadership moving forward,
Charlotte’s Web’s best days are yet to come. The Board needs to
return to a founder’s mentality, end wasteful spending and assemble
a team that knows what it takes to grow the Company,” said Joel
Stanley, co-founder of the Company. “We support the election of
Susan Vogt and Jonathan Atwood and we believe their experience will
remain a valuable asset to the newly constituted Board. We are
hopeful that Susan and Jonathan are as committed to putting the
interests of shareholders first as we are and that they will act as
a voice of reason to any Board members that may be more focused on
keeping their jobs than creating shareholder value. We remain ready
and open to engage and hope they can encourage their director
colleagues to do the same.”
The Concerned Shareholders are also calling for an independent
chair to preside over the Meeting as concerns regarding the
entrenched nature of the current Board grows. An independent chair,
untethered from board members looking out for their own interests,
can impartially oversee the annual meeting and facilitate fair
proceedings. In particular, an independent chair may determine that
waiving the advance notice requirements and avoiding the cost and
expense of another shareholders meeting is in the best interests of
the Company.
IT’S NOT TOO LATE -- YOU CAN STILL CHANGE YOUR VOTE!
THE CONCERNED SHAREHOLDERS ENCOURAGE FELLOW
SHAREHOLDERS TO “WITHHOLD” VOTES FOR JOHN HELD, JACQUES TORTOROLI,
THOMAS LARDIERI AND ALICIA MORGA. DOING SO WILL HELP BRING ABOUT
THE POSITIVE CHANGE THAT CHARLOTTE’S WEB NEEDS.
If you are a beneficial shareholder (hold shares through a
financial intermediary) or a registered shareholder (hold shares in
certificate form) you may immediately change your vote online by
using a 16-digit control number at www.proxyvote.com or by calling
1-800-690-6903.
Your control number can be found with the proxy materials
mailed to you. If you do not have your materials, you can request
your control number by email at shareholder@broadridge.com or by
calling 1-800-353-0103.
Need more information or need help voting? Call Kingsdale
Advisors on 1-888-564-7333 or email
contactus@kingsdaleadvisors.com.
ADVISORS
Kingsdale Advisors (“Kingsdale”) is acting as strategic
shareholder and communications advisor and Fasken Martineau
DuMoulin LLP is acting as legal advisors to the Concerned
Shareholders.
INFORMATION IN SUPPORT OF PUBLIC BROADCAST
SOLICITATION
The following information is provided in accordance with
applicable law. The Concerned Shareholders are relying on the
exemption under sections 9.2(4) of National Instrument 51-102 –
Continuous Disclosure Obligations to make this public broadcast
solicitation.
This news release and any solicitation made by the Concerned
Shareholders in advance of the Meeting is, or will be, as
applicable, made by Concerned Shareholders and not by or on behalf
of the management of the Company.
The Concerned Shareholders may solicit proxies in reliance upon
the public broadcast exemption to the solicitation requirements
under applicable law, conveyed by way of public broadcast,
including through press releases, speeches or publications, and by
any other manner permitted under applicable law. Proxies may also
be solicited by the Concerned Shareholders pursuant to an
information circular sent to shareholders after which solicitations
may be made by or on behalf of the Concerned Shareholders by mail,
telephone, fax, email or other electronic means as well as by
newspaper or other media advertising, and in person by directors,
officers and employees of the Concerned Shareholders, who will not
be specifically remunerated therefor. The Concerned Shareholders
may engage the services of one or more agents and authorize other
persons to assist in soliciting proxies on behalf of the Concerned
Shareholders.
The Concerned Shareholders have retained Kingsdale as its
strategic advisor and to assist the Concerned Shareholders in the
solicitation of proxies. The Concerned Shareholders will pay
Kingsdale fees currently estimated at up to $100,000. Kingsdale’s
responsibilities will principally include advising the Concerned
Shareholders on developing and implementing shareholder
communication and engagement strategies, and advising with respect
to meeting and proxy protocol.
All costs incurred for any solicitation will be borne by the
Concerned Shareholders, provided that, subject to applicable law,
the Concerned Shareholders may seek reimbursement from the Company
of the Concerned Shareholders’ out-of-pocket expenses, including
proxy solicitation expenses and legal fees, incurred in connection
therewith.
A registered shareholder of the Company that gives a proxy may
revoke it: (a) by completing and signing a valid proxy bearing a
later date than the proxy being revoked and returning the newly
completed and signed proxy in accordance with the instructions
contained in the form of proxy; (b) by depositing an instrument in
writing executed by the shareholder or by the shareholder’s
attorney authorized in writing, as the case may be: (i) at the
registered office of the Company at any time up to and including
the last business day preceding the day of the Meeting at which the
proxy is to be used, or (ii) with the chairman of the Meeting on
the day of the Meeting; or (c) in any other manner permitted by
law. A non-registered holder of common shares of the Company will
be entitled to revoke a form of proxy or voting instruction form
given to an intermediary at any time by written notice to the
intermediary in accordance with the instructions given to the
non-registered holder by its intermediary.
To the knowledge of the Concerned Shareholders, the Company’s
mailing address is 700 Tech Court Louisville, CO 80027. A copy of
this news release may be obtained on the Company’s SEDAR profile at
www.sedar.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking information within
the meaning of applicable securities laws. In general,
forward-looking information refers to disclosure about future
conditions, courses of action, and events. All statements contained
in this press release that are not clearly historical in nature or
that necessarily depend on future events are forward‐looking, and
the use of any of the words “anticipates”, “believes”, “expects”,
“intends”, “plans”, “will”, “would”, and similar expressions are
intended to identify forward-looking statements. These statements
are based on current expectations of the Concerned Shareholders and
currently available information.
Forward-looking statements are not guarantees of future
performance, involve certain risks and uncertainties that are
difficult to predict, and are based upon assumptions as to future
events that may not prove to be accurate. The Concerned
Shareholders undertake no obligation to update publicly or revise
any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as required by
applicable securities legislation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230613571246/en/
Kingsdale Advisors: Aquin George Director, Special Situations
Phone: 647-265-4528 Email: ageorge@kingsdaleadvisors.com
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