Been lurking here for over a year. Thanks to all of you who've contirbuted valuable information in the past.
I received the proxy ballot today. Dunno if this is standard verbage, but the justifications for changing the articles of incorporation to allow an additional 100M shares (300M authorized today) has the justification I've copied word for word below. Of interest are the statements of no current plans for the shares and the warnings regarding dilution and/or possible use to avoid unsolicited takeover. If this is non-standard verbage, what signals are present?
... As of January 31, 1998, there were approximately 220M shares of Common Stocks issued and oustanding; approx. 58M shares of Common Stock reserved for issuance under various stock plans of the COmpany and its subsidiaries; and approx. 22M shares of Common Stock remaining available for future issuance. No preferred SHares are issued or outstanding. The stockholders are now being asked to approve this proposed amendment.
The Board believes that the proposed increase is desirable so that, as the need may arise, the Company will have more flexibility to issue shrares of Common Stock in connection with future opportunities for expanding the business through investments and acquisitions, possible future stock dividends or stock splits, and for other general corporate purposes. THere are no preemtpive rights with respect to the COmpany;s Common Stock, and there currently is no specific use planned for any of the additional shares being proposed for authorization under this proposal.
Authorized but unissued shares of the Company's COmmon Stock may be issued at such times, for such purposes and for such consideration as the Board may determine to be appropriate without further authority from the Company's stockholders, except as otherwise required by applicable law or NYSE policies. The increase in authorized COmmon Stock will not have any immediate effect on the rightrs of existing stockholders. To the extent that the additional authorized shares are issued in the future, they will decrease the existing stockholders' percentage equity ownership; depending upon the price at which they are issued, they could be either dilutive or nondilutive to the existing stockholders.
The increase in the authorized bnumber of shares of Common Stock and the subsequent issuance of suchshares could have the effect of delaying or preventing a change in control of the COmpany without further action by the stockholders. Shares of authorized and unissued Common Stock could (within the limits imposed by applicable law) be issued in one or more transactions which would make a change in control of the COmpany more difficult, and therefore less likely. Any such issuance of additional stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of Common Stock, and such additional shares could be used to dilute the stock ownership or voting rights of a person seeking to obtain control of the COmpany. The COmpany previously adopted certain measures that may have the effect of helping to delay or resist and unsolicited takeover attempt.
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