San Jose Mercury News: Ballots go out in Yahoo fight
$12 million to fight Icahn
By Elise AckermanMercury News
Article Launched: 06/10/2008 01:33:21 AM PDT
The polls opened Monday for Yahoo shareholders as the company mailed out ballots for the upcoming board election that could determine whether Yahoo remains an independent company.
The ballots, known as "proxy cards," were accompanied by yet another pair of caustic letters penned by Yahoo's leaders and activist investor Carl Icahn, who is campaigning to replace Yahoo's board and sell the company to Microsoft.
Yahoo and Icahn have been sparring publicly since Icahn nominated an alternative slate for Yahoo's nine-member board of directors last month. On Monday, Yahoo said it planned to spend up to $12 million fighting Icahn.
Company materials invited shareholders to vote "24 hours a day, 7 days a week" via a Web site, www.cesvote.com, a toll-free number or by regular mail. Anyone holding Yahoo shares as of the close of business on June 3 is eligible to vote.
A preliminary tally will be announced at the annual meeting Aug. 1. Final results will be published along with Yahoo's financial results for the quarter ending Sept. 30, 2008. IVS Associates, a voting services company, has been hired to act as inspector of elections, the company said.
In a letter to shareholders, Chief Executive Jerry Yang and board Chairman Roy Bostock urged investors to ignore Icahn. "Mr. Icahn has no credible plan except to sell the company to Microsoft - despite the fact that Microsoft has publicly indicated that it has no current interest in such a transaction," Yang and Bostock wrote.
Microsoft withdrew a bid to buy Yahoo for $33 a share May 3 after Yahoo rebuffed the offer.
And in case investors missed the point, the proxy materials instructed them "NOT TO SIGN OR RETURN ANY PROXY CARD SENT TO YOU BY THE ICAHN ENTITIES.
"Even if you have previously signed a proxy card sent by the Icahn Entities, you have the right to change your vote by using the enclosed WHITE proxy card," the material continued.
Icahn quickly fired back, accusing Bostock of reaping rich financial benefits from Yahoo and reiterating his opposition to a severance plan, adopted by Yahoo's board Feb. 12, that provided employees up to two years of salary and accelerated vesting of their stock options if there was "a change in control of the company" and they were fired without "cause" or quit for a "good reason."
In the proxy materials, Yahoo disclosed that "a change of control" would include a situation in which one person or a group acquired more than 40 percent of the company's outstanding shares or if five or more of Icahn's nominees were elected.
Eric Jackson, president of Ironfire Capital, said he and a group of 150 people controlling about 3.2 million shares, are voting for Icahn. "It's a situation where the current board, in my view, hasn't done anything to warrant re-election," he said.
Yahoo is currently facing shareholder lawsuits in California and Delaware over the board's handling of Microsoft's bid.
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Contact Elise Ackerman at eackerman@mercurynews.com or (408) 271-3774.
