• On behalf of all shareholders, Maple Rock is seeking real independence at the board by replacing two ESW Capital-affiliated directors who have been characterized as “independent”
  • Nominees Ryan J. Morris and Andrew Day are wholly independent with extensive experience in the capital markets, telecommunications and software industries and bring a commitment to serve the interests of ALL Optiva shareholders
  • Current directors Christy Jones and Farhan Thawar are not aligned with shareholders, refuse to communicate, are roadblocks to value creation, and have supported unprecedented and poor management actions

TORONTO–(BUSINESS WIRE)–Maple Rock Capital Partners Inc., owning approximately 22.1% of the subordinate voting shares of Optiva Inc. (TSX:OPT) (“Optiva” or the “Company”), announces it, as investment manager of Maple Rock Master Fund LP, has requisitioned (the “Requisition”) Optiva’s Board of Directors (the “Board”) to call a special meeting of shareholders (“Meeting”) for the purpose of, among other things, replacing two non-preferred ESW Capital, LLC (or “ESW”)-affiliated directors with two wholly independent directors.

Maple Rock has been Optiva’s second largest shareholder since September 2017 and continues to believe in Optiva’s long-term value creation prospects. However, Maple Rock is concerned the Company will be unable to reach its full potential with an ESW-controlled Board and ESW-affiliated CEO who are intent on running the Company as though it were a private entity to the benefit of ESW and without appropriate checks and balances. Maple Rock is disappointed, but not surprised, that following its open letter to the Board of January 21, 2020, expressing concerns about the Company and indicating a continued willingness to engage, the Board has not reached out to Maple Rock. The fact the Board has continued to ignore its second-largest shareholder in an era where director-shareholder engagement is the norm, is not only an affront to the basic standards of good governance, but further indication of the Board’s willingness to run Optiva as though it is a private company and their entrenchment.

Maple Rock’s decision to requisition a meeting was not its first choice nor one it relishes taking. It is, however, needed to establish the basic tenets of good governance at Optiva.

Over the past several months, Maple Rock has sought to work constructively with Optiva to implement a small number of modest, straightforward, commonsense recommendations that would strengthen the Company’s governance practices and build value for shareholders. In fact, Maple Rock is so confident about the prospects for the Company that it has twice offered additional capital, contingent upon minority nomination rights and basic governance improvements. The first offer was in the form of a CDN$15 million loan and then in the form of a CDN$50 million equity investment at a price per subordinate voting share of C$60.

Rather than accept the additional capital and basic governance improvements that came with it, the ESW-controlled Board rejected the offers and instead announced a USD$100 million financing. Having rejected Maple Rock’s previous offers, it is clear this financing is not driven by the need for additional capital, but rather is an entrenchment tactic to dilute shareholders. It’s especially odd that a company would announce its intention to raise a significant amount of money with no indications on the sources of capital or its per share value. The lack of clarity around the announcement rattled the market with Optiva losing over 21% of its market value as of the close on January 24, 2020.

It is now apparent that, with this recent action, the only way to ensure good governance at the Company is to requisition a meeting of shareholders.

Maple Rock is requesting shareholders remove ESW-related directors Christy Jones and Farhan Thawar and replace them with Ryan J. Morris and Andrew Day (the “Nominees”)—two highly-qualified independent and experienced nominees.

Given the current accountability imbalance at the Board level and potential for the ESW-controlled Board to take certain actions counter to the interests of other shareholders in an effort to further entrench and benefit themselves, Maple Rock requests the special meeting be held promptly, by no later than March 16, 2020.

Maple Rock is also reminding the Board, particularly the two deemed independent non-preferred directors in question, of their fiduciary duty to all shareholders, beyond ESW. If the ESW-controlled Board is considering a behind-closed-doors process to replace Ms. Jones and Mr. Thawar with two other ESW-selected directors in an attempt to create the appearance of change and independence, Maple Rock warns this will not result in real change. The new independent directors should be selected by all shareholders.

Governance Imbalance in Favour of ESW

Optiva’s Board is presently made up of seven directors, four of whom are entitled to be selected by ESW as the sole preferred shareholder, while the other three non-preferred directors are intended to be voted on by subordinate voting shares, of which ESW owns approximately 27.8%. Since ESW gained its controlling position on the Board via a private placement on January 26, 2017, Optiva has lost over 40% of its market value and underperformed its industry peers and the S&P/TSX Composite Index.

The problem is that the check and balance required on this structure, namely three truly independent directors, is not in place. Currently, two of the three non-preferred directors—namely Ms. Jones and Mr. Thawar (technically deemed to be ‘independent directors’)—are closely associated with ESW. ESW nominated both as independent directors who are tasked with overseeing related-party matters and ensuring minority shareholders are treated fairly, yet both have deep ties to ESW. Ms. Jones and Mr. Thawar have numerous historical relationships with ESW.

True independence is incredibly important, especially given the three independent directors have a critical role in overseeing transactions that involve and potentially benefit ESW, and in ensuring shareholders have the ability to consider accretive change of control opportunities that may not be of interest to ESW. Notably, Optiva’s subscription agreement contains a drag-along right that, among other provisions, requires ESW to support any proposed transaction that is at least 120% of the exercise price of the warrants then in effect and is supported by the majority of independent non-preferred directors.

Just because a director is deemed to be independent, it does not mean they are sufficiently objective to represent the interests of all shareholders. Directors who have personal and/or previous professional relationships with parties who have interests that may be at odds with the interests of other shareholders may be less likely to engage in a proactive, thorough, and dispassionate review and debate of matters brought before them.

Maple Rock believes shareholders should have the benefit of full disclosure regarding Board members’ conflicting relationships and actions that raise questions about possible breach of certain directors’ fiduciary duties.

Optiva’s Board Skirting Governance Best Practices

Governance best practices dictate that compensation committees be composed solely of independent directors. Optiva’s compensation committee consists of three Board members—Ms. Jones, and non-independent directors Scott Brighton and Andrew Price—all of whom have close ties to ESW.

Given the makeup of this committee, Maple Rock is concerned about its effectiveness in providing oversight and ensuring the appropriateness and competitiveness of executive pay. For example, the compensation package for CEO Danielle Royston appears to be significantly off-market relative to her male peers, is devoid of any peer group benchmarking, and lacks any performance-based incentives to deliver returns for Optiva shareholders. It also raises serious questions about the degree of influence the ESW-controlled compensation committee has on the Company’s management.

The Company’s decisions on CEO compensation, coupled with its recently-released analyst presentation, raise questions about ESW’s objectives. We wonder why the Board would object to retaining a globally-recognized compensation consulting agency to review the CEO’s compensation in order to incentivize shareholder returns and address off-market levels relative to male peers; and why it would choose to rely on non-standard financial definitions and accounting practices in a presentation which confusingly attempts to make the company look weaker than it is.

We also wonder why Optiva, a publicly-traded company on the TSX, would go an entire year without a full-time CFO, and to what degree the Company, without such a CFO, is able to make accurate forecasts with regard to financial matters, including its fundraising needs.

Independent, Accountable and Highly-Qualified Director Nominees

Maple Rock’s Nominees are wholly independent, accountable and have significant experience in the capital markets, telecommunications and software industries. In contrast, current “independent” directors Ms. Jones and Mr. Thawar are closely associated with ESW.

The Nominees include:

Ryan Morris

  • Entrepreneur and investor who served as Chairman of three publicly-traded companies
  • Founder and President of investment firm Meson Capital Partners, LLC
  • Co-Founder and CEO of software company VideoNote, LLC

Andrew Day

  • Over 25 years of management experience in telecommunications, technology innovation, sales and marketing leadership
  • Currently Executive Vice President and Chief Operating Officer of Internap Corp.
  • Former Senior Vice President, Head of Consumer Sales / Channels at Rogers Communications, and CEO of Primus Telecommunications Group Inc.


Kingsdale Advisors (“Kingsdale”) is acting as strategic shareholder and communications advisor and Norton Rose Fulbright Canada LLP is acting as legal advisor to Maple Rock.

Information Concerning the Concerned Shareholder Nominees

As set out in the Requisition, Maple Rock, as investment manager of Maple Rock Master Fund LP, (together, the “Concerned Shareholder”) has nominated Ryan Morris and Andrew Day (the “Concerned Shareholder Nominees”) to serve as new independent directors of Optiva Inc. (“Optiva”) until the next annual meeting of shareholders, or until their successors are elected or appointed in accordance with applicable law. The table below sets out, in respect of each Concerned Shareholder Nominee, his name, province or state and country of residence, his principal occupation, business or employment within the five preceding years, and the number of subordinate voting shares (the “Shares”) of Optiva beneficially owned, or controlled or directed, directly or indirectly, by such Concerned Shareholder Nominee.

Name, Province

or State and

Country of


Present Principal Occupation, Business or Employment and

Principal Occupation, Business or Employment During the

Preceding Five Years

Number of Shares

Beneficially Owned or

Controlled or Directed

(Directly or Indirectly)

Ryan Morris


United States


President of Meson Capital Partners LLC from 2009 to present;

Executive Chairman of Software Motor Company from 2017 to



Andrew Day

Ontario, Canada

Chief Operating Officer and Executive Vice President of Internap

Corporation from 2019 to present; Senior Vice President and

General Manager of Internap Corporation from 2016 to 2019;

Senior Vice President – Head of Consumer Sales / Channels of

Rogers Communications Inc. from 2013 to 2015.


Other Boards of Reporting Issuers

As at the date of this Requisition, neither of the Concerned Shareholder Nominees serve as directors of any reporting issuers (or the equivalent) in Canada or otherwise.

Other Information Concerning the Concerned Shareholder Nominees

To the knowledge of the Concerned Shareholder, no Concerned Shareholder Nominee is, at the date hereof, or has been, within ten (10) years before the date hereof: (a) a director, chief executive officer or chief financial officer of any company that (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation that was in effect for a period of more than thirty (30) consecutive days (each, an “order”), in each case that was issued while the Concerned Shareholder Nominee was acting in the capacity as director, chief executive officer or chief financial officer, or (ii) was subject to an order that was issued after the Concerned Shareholder Nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; (b) a director or executive officer of any company that, while such Concerned Shareholder Nominee was acting in that capacity, or within one (1) year of such Concerned Shareholder Nominee ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (c) someone who became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such Concerned Shareholder Nominee.

To the knowledge of the Concerned Shareholder, as at the date hereof, no Concerned Shareholder Nominee has been subject to: (a) any penalties or sanctions imposed by a court relating to securities legislation, or by a securities regulatory authority, or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a Concerned Shareholder Nominee.

To the knowledge of the Concerned Shareholder, none of the Concerned Shareholder or directors or officers of the Concerned Shareholder, or any associates or affiliates of the foregoing, or any of the Concerned Shareholder Nominees or their respective associates or affiliates, has: (a) any material interest, direct or indirect, in any transaction since the commencement of the Corporation’s most recently completed financial year or in any proposed transaction which has materially affected or will materially affect the Corporation or any of its subsidiaries; or (b) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter proposed to be acted on at the Meeting, other than the election of directors.

Additional Information

The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Although the Concerned Shareholder has requisitioned a meeting of shareholders, there is currently no record or meeting date and shareholders are not being asked at this time to execute a proxy in favour of the Concerned Shareholder Nominees or any other resolutions set forth in the Requisition. In connection with the Meeting, the Concerned Shareholder may file a dissident information circular (the “Information Circular”) in due course in compliance with applicable securities laws.

Notwithstanding the foregoing, the Concerned Shareholder is voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations in accordance with securities laws applicable to public broadcast solicitations.

This news release and any solicitation made by the Concerned Shareholder in advance of the Meeting is, or will be, as applicable, made by the Concerned Shareholder, and not by or on behalf of the management of Optiva. All costs incurred for any solicitation will be borne by the Concerned Shareholder, provided that, subject to applicable law, the Concerned Shareholder may seek reimbursement from Optiva of the Concerned Shareholder’s out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful reconstitution of the Board.

The Concerned Shareholder is not soliciting proxies in connection with the Meeting at this time, and shareholders are not being asked at this time to execute proxies in favour of the Concerned Shareholder Nominees (in respect of the Meeting) or any other resolution set forth in the Requisition. Proxies may be solicited by the Concerned Shareholder pursuant to an Information Circular sent to Shareholders after which solicitations may be made by or on behalf of the Concerned Shareholder, 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 Shareholder, who will not be specifically remunerated therefor. The Concerned Shareholder may also solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including through press releases, speeches or publications, and by any other manner permitted under applicable Canadian laws. The Concerned Shareholder may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of the Concerned Shareholder.

The Concerned Shareholder may retain Kingsdale to assist the Concerned Shareholder in soliciting shareholders should the Concerned Shareholder commence a formal solicitation of proxies. If Kingsdale is retained in such capacity, its responsibilities may include advising the Concerned Shareholder on governance best practices, where applicable, liaising with proxy advisory firms, developing and implementing shareholder communication and engagement strategies, and advising with respect to meeting and proxy protocol for a fee to be agreed upon at the time of such engagement.

The Concerned Shareholder is not requesting that Optiva shareholders submit a proxy at this time. Once the Concerned Shareholder has commenced a formal solicitation of proxies in connection with the Meeting, proxies may be revoked by instrument in writing by the shareholder giving the proxy or by its duly authorized officer or attorney, or in any other manner permitted by law or the articles of incorporation or by-laws of Optiva.

Optiva’s principal office address is 2233 Argentia Rd, East Tower, Suite 302, Mississauga, Ontario L5N 2X7. A copy of this news release may be obtained on Optiva’s SEDAR profile at www.sedar.com.


Kingsdale Advisors

Ian Robertson

Executive Vice President Communication Strategy

Office: 416-867-2333

Cell: 647-621-2646

[email protected]