Casino developer Wynn Resorts Ltd has proposed removing Elaine Wynn (pictured), ex-wife of the company’s chairman Steve Wynn, as a so-called Class I director, thus reducing the number of such directors from three to two.
Under corporate law in the United States, companies commonly use boards made up of directors of different classes, with different lengths of appointment – also known as a ‘staggered board’ – primarily as a defence against a hostile takeover.
Stockholder agreements first signed in 2002 and amended in 2006 and 2010 require Elaine Wynn to vote her 9.5 million shares in Wynn Resorts with her ex-husband, despite their 2010 divorce.
In 2012 – the same year Wynn Resorts forcibly ordered the redemption at a discount of the company shares held by its then biggest single shareholder, Japanese gaming entrepreneur Kazuo Okada – Elaine Wynn filed a lawsuit seeking to free her of the obligation to vote her stock with Mr Wynn.
“If Elaine Wynn prevails…Stephen A. Wynn would not beneficially own or control Elaine Wynn’s shares, which could increase the likelihood that a change in control may occur under the Wynn Las Vegas debt documents,” said Friday’s filing, referring to several high-yield bonds covering a portion of the casino operator’s long-term debt.
“The board decided not to re-nominate Elaine P. Wynn to serve as a director, based on the recommendation of the Nominating and Corporate Governance Committee,” said the filing.
But the document said Ms Wynn intended to nominate herself for election by shareholders even if the board does not support her.
The proxy statement said: “Pursuant to a letter dated February 13, 2015, Ms Wynn notified the company that in the event she is not nominated to serve another three-year term as a director of the company, she intends to nominate herself for election as a Class I director to the company’s board at the annual meeting.”
The meeting is due to take place on April 24. The other two current Class I directors are John J. Hagenbuch, who has served as a director since December 2012, and J. Edward Virtue, who has been a director since November 2012.
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