Wynn Resorts Ltd has issued further statements in its campaign to relieve Elaine Wynn (pictured) from her duties as a board member. She has been on the board since the firm was founded in 2002.
The company said in another proxy filing to Nasdaq on Monday that if Elaine Wynn won a previously lodged legal bid to vote her approximately 9.5 million shares independently of her ex-husband – company chairman Steve Wynn – it could trigger a “change of control” provision under the terms of the company’s outstanding debt securities, thereby potentially requiring the company to offer to repurchase a significant amount of the securities.
Wynn Resorts had long-term debt of US$7.3 billion as of December 31, according to Bloomberg data.
According to a filing also on Monday made by Elaine Wynn, her stake represents a 9.4 percent interest in the company. A Wynn Resorts filing on January 15 said Mr Wynn had just over 10 million shares in the firm, representing an approximately 9.9 percent interest. Voted together, the 19.5 million shares of the ex-couple form a bigger block than the next largest shareholder, global investment firm T. Rowe Price, which owns just over 17 million shares, or 16.8 percent of the company.
Stockholder agreements first signed in 2002 and amended in 2006 and 2010 require Elaine Wynn to vote her shares with her ex-husband, despite their 2010 divorce.
But 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.
The latest proxy filing from Wynn Resorts say that Elaine Wynn was kept on the board – despite her lawsuit – after she assured the board that she was not putting her personal interests ahead of that of the company. But since the autumn of 2014 the directors have had a series of meetings with Elaine Wynn to press the issue, according to the filing.
“Ms Wynn did not assuage the corporate governance committee’s concerns about her effectiveness in the board room,” it stated.
The filing added: “Ms Wynn is not meaningfully contributing to the board’s discussion and work, which is increasingly conducted at the board committee level, in which Ms Wynn is unable to participate due to Ms Wynn’s lack of independence under Nasdaq listing standards and resulting inability to serve on any existing board committees.”
But the philanthropist hit back in her own filing, appealing to shareholders to re-elect her has a director.
“I do not simply toe the party line and instead hold our management team, including our chairman and CEO, accountable to our stockholders,” she stated.
“The board’s action to exclude a strong and knowledgeable voice may make for a more homogeneous and compliant board, but I believe that is not at all in the best interests of our stockholders,” added Elaine Wynn.
A vote on whether to re-elect Ms Wynn will be held at the 2015 annual meeting of stockholders, scheduled for April 24. Wynn Resorts has nominated two existing directors – John Hagenbuch and J. Edward Virtue – to continue on the board for three-year terms.
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Professor emeritus at Whittier Law School in California, in the United States, and a visiting professor at University of Macau