FrontFour Calls for Changes at MDCA

Purpose of Transaction.

The Reporting Persons purchased the securities of the Issuer reported herein based on their belief that such securities, when purchased, were undervalued and represented an attractive investment opportunity.

Over the past several months, FrontFour Capital (together with its affiliates, “FrontFour”) has engaged in communications with the Issuer’s management team and Board of Directors (the “Board”) regarding means to create shareholder value, including through changes to the composition of the Board. FrontFour first initiated private conversations with the Board in August 2018 in an attempt to constructively outline a strategy that would result in the replacement of Scott L. Kauffman as CEO with a candidate better suited to leverage the strength of the Issuer’s agencies and grow the Issuer’s market share in key industries. Shortly thereafter, the Board hastily announced Mr. Kauffman’s intention to resign as CEO by December 31, 2018 without having commenced a search for his replacement, and then announced the launch of a strategic review process a week later.

FrontFour has stressed the importance of shareholder representation on the Board to better align the perspective of the Board with that of the Issuer’s shareholders, particularly at this critical juncture, but the Board has rejected FrontFour’s requests. FrontFour continues to believe that significant changes to the composition of the Board are required in order to ensure that the best interests of shareholders are represented in the boardroom and therefore is evaluating all available options, including seeking changes to the composition of the Board at a special meeting of shareholders requisitioned for such purpose. FrontFour may continue to enter into discussions with management and the Board and reserves all rights to take any and all action with respect to its investment in the Issuer.

The Reporting Persons intend to review their investment in the Issuer on a continuing basis and may from time to time in the future express their views to and/or meet with management, the Board, other shareholders or third parties, and/or formulate plans or proposals regarding the Issuer, its assets or its securities. The Reporting Persons may exchange information with any such persons pursuant to appropriate confidentiality or similar agreements.

Link to Filing: https://www.sec.gov/Archives/edgar/data/876883/000092189518003170/0000921895-18-003170-index.htm


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