Board Determines that Additional
Disclosures Do Not Exonerate Intentional Misrepresentations by Two
of Legion's Candidates
Board Exercises Its Discretion to Allow
Legion's Other Two Candidates to Be Nominated by Legion Despite
Legion's Deficient and Invalid Nomination Notice
TAMPA,
Fla., March 22, 2023 /PRNewswire/ - Primo Water
Corporation (NYSE: PRMW) (TSX: PRMW) (the "Company" or "Primo"), a
leading provider of sustainable drinking water solutions in
North America and Europe, today announced that the Primo Board
of Directors (the "Board") has exercised its discretion under
Primo's Bylaws to waive some of the deficiencies in the invalid
nomination notice (the "Notice") submitted by Legion Partners
Holdings, LLC (together with its affiliates, "Legion") with respect
to the election of directors at the Company's 2023 Annual and
Special Meeting of Shareowners (the "Annual Meeting"). As a result,
two of Legion's four candidates can be submitted for nomination to
the Board at the Annual Meeting. The Board met and determined to
exercise its discretion on March 21,
prior to the initiation of a lawsuit by Legion.
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The Board is not waiving the deficiencies in Legion's Notice
relating to its two other candidates. Those deficiencies, as
previously described, involve troubling misrepresentations and
omissions of material facts by the candidates themselves that
simply cannot be ignored.
The Board made the following statement:
Primo shareowners have the right to nominate
candidates for election to the Company's Board of Directors so long
as they fully comply with the clear and simple requirements set
forth in the Company's Bylaws. Primo's disclosure requirements are
common and safeguard orderly director elections by requiring, in
part, that the Company and shareowners are provided with accurate
and truthful information about director candidates. These
disclosure standards are the same for both the Company's nominees
and for shareowner nominees.
Legion failed to comply with these simple
requirements by neglecting to disclose dozens of data points and,
importantly, that one of its nominees, Henrik Jelert, was arrested
and tried for bribery multiple times, while another of its nominees
is involved in a pending lawsuit alleging that she has committed
fraud and securities laws violations. These two nominees
represented that they had disclosed all the information requested
by the Company, when in fact they had not. Each candidate also
agreed that the Company would not have to accept his or her name in
nomination if he or she omitted material information or made false
representations.
The Board, as fiduciaries on behalf of all
shareowners, announced last week that it would enforce the
requirements in the Company's Bylaws and the contractual
commitments made by these candidates. It determined that the Notice
was invalid.
On March 19, 2023,
nearly a week after the deadline for shareowners to submit a valid
nomination notice, Legion attempted to correct its egregious errors
and omissions by submitting 43 pages of additional information as a
self-styled "supplement" to its Notice. The Company's Bylaws do not
contain any provision allowing for late corrective supplements to
"cure" a deficient Notice.
Nevertheless, the Board met on March 21 and, after careful review of these
additional disclosures, determined to exercise its discretion and
provide a waiver of certain deficiencies in the Notice with respect
to two of Legion's nominees, Timothy
Hasara and Derek Lewis, who
we believe have not made material misrepresentations to Primo.
Notably, nothing in the "supplement" exonerates
Legion's other two candidates who made these misrepresentations
directly to Primo. The Board has determined that those
misrepresentations are material and should not be excused.
Accordingly, the Company will not recognize Legion's nominations of
Henrik Jelert and Lori Marcus at the
Annual Meeting.
As previously noticed, the Annual Meeting will be held on
May 3, 2023. There is no need for
shareowners to take any action at this time.
ABOUT PRIMO WATER CORPORATION
Primo is a leading pure-play water solutions provider in
North America and Europe and generates approximately
$2.2 billion in annual revenue. Primo
operates largely under a recurring revenue model in the large
format water category (defined as 3 gallons or greater). This
business strategy is commonly referred to as "razor-razorblade"
because the initial sale of a product creates a base of users who
frequently purchase complementary consumable products. The razor in
Primo's revenue model is its industry leading line-up of innovative
water dispensers, which are sold through approximately 10,000
retail locations and online at various price points. The dispensers
help increase household and business penetration which drives
recurring purchases of Primo's razorblade offering or water
solutions. Primo's razorblade offering is comprised of Water
Direct, Water Exchange, and Water Refill. Through its Water Direct
business, Primo delivers sustainable hydration solutions across its
21-country footprint direct to customers, whether at home or to
businesses. Through its Water Exchange business, customers visit
retail locations and purchase a pre-filled bottle of water. Once
consumed, empty bottles are exchanged at our recycling center
displays, which provide a ticket that offers a discount toward the
purchase of a new bottle. Water Exchange is available in
approximately 17,500 retail locations. Through its Water Refill
business, customers refill empty bottles at approximately 23,500
self-service refill drinking water machines. Primo also offers
water filtration units across its 21-country footprint.
Primo's water solutions expand consumer access to purified,
spring, and mineral water to promote a healthier, more sustainable
lifestyle while simultaneously reducing plastic waste and
pollution. Primo is committed to its water stewardship standards
and is proud to partner with the International Bottled Water
Association (IBWA) in North
America as well as with Watercoolers Europe (WE), which
ensure strict adherence to safety, quality, sanitation and
regulatory standards for the benefit of consumer protection.
Primo is headquartered in Tampa,
Florida (USA). For more information, visit
www.primowatercorp.com.
Safe Harbor Statements
This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act
of 1934 and applicable Canadian securities laws conveying
management's expectations as to the future based on plans,
estimates and projections at the time the Company makes the
statements. Forward-looking statements involve inherent risks and
uncertainties and the Company cautions you that a number of
important factors could cause actual results to differ materially
from those contained in any such forward-looking statements. The
forward-looking statements in this press release include but are
not limited to statements regarding the effectiveness of the
Company's strategy and the ability of the Company's leadership to
execute on such strategy. The forward-looking statements are based
on assumptions regarding management's current plans and estimates.
Factors that could cause actual results to differ materially from
those described in this press release include, among others: risks
relating to any unforeseen changes to or effects on liabilities,
future capital expenditures, revenues, expenses, earnings,
synergies, indebtedness, financial condition, losses and future
prospects; the effect of economic, competitive, legal, governmental
and technological factors on Primo's business; and the impact of
national, regional and global events on our business, including the
COVID-19 outbreak. The foregoing list of factors is not exhaustive.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Readers are urged to carefully review and consider the various
disclosures, including but not limited to risk factors contained in
the Company's Annual Report in the Form 10-K and its quarterly
reports on Form 10-Q, as well as other periodic reports filed with
the securities commissions. The Company does not, except as
expressly required by applicable law, undertake to update or revise
any of these statements in light of new information or future
events.
Important Additional Information
The Company, its
directors and certain of its executive officers are participants in
the solicitation of proxies from the Company's shareowners in
connection with the Annual Meeting. The Company intends to file a
definitive proxy statement and a BLUE proxy card with the
U.S. Securities and Exchange Commission (the "SEC") and Canadian
securities regulators in connection with any such solicitation of
proxies from the Company's shareowners. SHAREOWNERS OF THE
COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT,
ACCOMPANYING BLUE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS
THEY WILL CONTAIN IMPORTANT INFORMATION. The Company's
definitive proxy statement for the 2022 Annual and Special Meeting
of Shareowners contains information regarding the direct and
indirect interests, by security holdings or otherwise, of the
Company's directors and executive officers in the Company's
securities. Information regarding subsequent changes to their
holdings of the Company's securities can be found in the SEC
filings on Forms 3, 4 and 5, which are available on the Company's
website at https://primowatercorp.com/investors/ or through the
SEC's website at www.sec.gov, and are disclosed on The System for
Electronic Disclosure by Insiders (SEDI) in Canada. Information can also be found in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2022. Updated
information regarding the identity of potential participants, and
their direct or indirect interests, by security holdings or
otherwise, will be set forth in the definitive proxy statement and
other materials to be filed with the SEC in connection with the
Annual Meeting. Shareowners will be able to obtain the definitive
proxy statement, any amendments or supplements to the proxy
statement and other documents filed by the Company with the SEC and
Canadian securities regulators at no charge at the SEC's website at
www.sec.gov and on the System for Electronic Document Analysis
and Retrieval (SEDAR) at www.sedar.com. Copies will also be
available at no charge on the Company's website at
https://primowatercorp.com/investors/.
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SOURCE Primo Water Corporation