One major reason and a few lesser ones brought me to vote no:
1. The proxy statement confirms my understanding that by escaping to Bermuda, Xoma officers and directors lower their risk of liability TO SHAREHOLDERS for "any breach of fiduciary duty" to near zero. As a personal rule, I don't entrust my money to strangers and then give them carte blanche to steal it from me.
2. I also remain unconvinced that the tax advantages to the corporation over the long run, although there may be some, are worth the risks and disadvantages of Bermuda corporate citizenship. To be more certain, of course, one would have to have a better idea of what Xoma projects from domestic and international sales, not to mention a crystal ball disclosing Bermuda's political, social, and economic future. However, much more convincing are the immediate tax advantages to officers and directors of a Bermuda corporation who choose to become international tax dodgers by relocating their own legal residency when the company itself becomes a foreign citizen. I've known a few companies -- actually, they were about Xoma's size -- whose directors took the companies overseas to chase tax advantages. In the end, it profited no one but the officers and directors themselves. Another personal rule of mine is: I don't give money to people who spend a lot of time, energy, and money devising sharp practices to save their own money while spending mine.
3. I resent the deception of the earlier "poll" which George now agrees must have been preparatory to the relocation plan. If this is correct, Ellen, or rather the Company through Ellen, lied to us not once or twice but three times. I don't blame Ellen; bless her heart, that's her job. She's in PR. That's what they do.
4. I also confess to finding a strain of something that feels suspiciously like patriotism, or maybe just constancy, in my soul. After -- what? three decades? -- taking advantage of U.S. laws while losing money, Xoma wants us to think its ship is about to come in. So what does it propose doing? Like a louse, it plans to leave the house, the kids, and the dog and take up with some chippie.
5. Finally, I note that the only significant insider buying of Xoma in the past year was by Castello and the company's head lawyer. The latter, in particular, we can now see occurred about the time this plan must have been hatched. He had to be in on the Delaware-Arizona-Bermuda shell game, the contacts with Bermuda tax counsel, and the reasons for it. The good news is if there was any doubt the lawyer expected Neuprex approval that doubt is pretty much dispelled. The bad news is it resembles an insider trading violation. NOT that I am making such an accusation, only that in my humble opinion the appearance is rather suggestive.
I will admit U.S. laws are overly generous to corporate tax fugitives. That's the fault of a Congress that has been bought lock, stock, and barrel by -- guess who? -- corporate tax fugitives. So I suppose the fault, dear Brutus, is in ourselves. The real remedy no doubt lies in campaign finance reform. In the meantime all I can do is vote my conscience and what I perceive to be my self-interest. I ask myself, would I have invested in Xoma in the beginning if it had been a Bermuda corporation whose officers and directors want to be shielded from liability for breach of U.S. fiduciary duty-to-shareholder laws? The answer is no. I think a fair number of other existing and potential investment funds and individual investors likewise prefer the greater safety of the U.S. system. Although the proxy makes a rather weak attempt at suggesting relocation might expand the available pool of investors, it is deceptively silent about the potential risk that the pool of willing investors actually will shrink.
I don't see a lot of people pounding the table for Xoma now. What do you suppose will happen when it lowers the bar of acceptable standards of behavior for its officers and directors?
As RobertK or George likes to say, almost as if employed by Xoma, all of this is sheer speculation, all disclaimers apply, this is only for entertainment value, pay no attention to my lunatic ravings, yadda- yadda-yadda-yadda. |
