Keynote adjourns Annual Meeting to Try and Get Enough Votes to Approve Extending Option Plan - 27 Feb 2009
Its stock plan facing defeat, Keynote adjourns meeting to drum up more votes
http://www.siliconbeat.com/2009/02/27/its-stock-plan-facing-defeat-keynote-adjourns-meeting-to-drum-up-more-votes/
POSTED BY JACK DAVIS ON FEBRUARY 27TH, 2009 AT 7:27 PM | CATEGORIZED AS KEYNOTE SYSTEMS | TAGGED AS GOVERNANCE, KEYNOTE SYSTEMS, SHAREHOLDER PROPOSALS, STOCK OPTIONS
Keynote Systems counted the votes on its proposal seeking shareholder approval to extend its 1999 stock incentive plan at its annual meeting today, and decided it needed more time to, presumably, solicit additional support for the measure, according to a regulatory filing.
“As of February 27, approximately 12 million of the approximately 14.1 million outstanding shares have been voted, with approximately 48.3% of votes cast in favor of extending the Plan and approximately 51.7% against.”
The apparent rejection of the measure came despite a special appeal by the company’s chairman and chief executive, Umang Gupta, and Jennifer Bolt, chair of the board’s compensation committee.
In a letter sent to shareholders after it became clear that the shareholder advisory firm RiskMetrics would recommend a “no” vote on the measure — largely because Keynote has “a relatively large number of outstanding stock options” – the company encouraged stockholders to “look a bit deeper at Keynote’s truly unique situation.”
The letter pointed out that Keynote has never sought to increase the number of shares it could issue under the plan and had even removed an “evergreen” clause that had allowed automatic increases. It also pointed out that while the company has has options to purchase 5.8 million shares currently outstanding, “over 90% of these shares are out of the money.”
The company decided to adjourn the meeting for a week, “to provide Keynote with additional time to solicit proxies from its stockholders.” We assume they aren’t particularly interested in more no votes. In fact, the company pointed out that stockholders “may also change their vote” on the proposal “by executing a new proxy” in the meantime.
The company is asking shareholders to extend by two years the 1999 Equity Incentive Plan, which is set to expire in June. The plan has 562,590 shares remaining in it.
The board of directors, all of whom were re-elected, urged shareholders to vote for the plan, saying it believes is necessary to assist in the retention of current employees and hiring of new employees, and to continue to provide our employees with an incentive to contribute to our future success by providing an opportunity to acquire shares of our common stock.”
A separate proposal to extend the company’s employee stock purchase plan by another 10 years was approved.
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This is the conclusion of the story regarding Keynotes adjourning their Annual Meeting for a week to obtain additional votes to extend their stock option plan. It looks like the CEO had to give up a 400,000 share grant to make the terms palatable to the shareholders...
Docu-Drama: Keynote Systems finally wins approval for stock incentive plan extension
By Jack Davis
Mercury News
Posted: 03/05/2009 03:27:15 PM PST
In a move that might make a Cook County politician smile, the board of Keynote Systems adjourned its shareholder meeting last month to give itself more time to drum up votes for its proposal to extend its 1999 stock incentive plan for two years.
The proposal garnered the support of only 48.3 percent of the 12 million shares voted at the company's annual meeting Feb. 27. The apparent rejection came despite a special written appeal by the chair of the company's board and its chief executive that was sent to shareholders after it became clear that the advisory firm RiskMetrics would recommend a "no" vote, largely because Keynote has "a relatively large number of outstanding stock options."
The letter pointed out that while the company has options to purchase 5.8 million shares currently outstanding, "over 90% of these shares are out of the money," meaning their exercise price is currently below the price where Keynote shares are currently trading. They closed Friday at $7.46.
The board of directors, all of whom were re-elected at the meeting, urged shareholders to vote "yes," saying passage was necessary to help retain current employees and hire new ones, and to give employees "an incentive to contribute to our future success by providing an opportunity to acquire shares of our common stock."
A separate proposal to extend the company's employee stock purchase plan was approved.
Keynote's management adjourned the meeting for a week to give it time to solicit votes from stockholders who owned an additional 2.1 million shares that were not voted at the meeting.
The San Mateo company's chief executive, upped the ante Tuesday offering to cancel an option on 400,000 granted to him in November 2007 if the proposal passes. The option has an exercise price of $14.99, a price Keynote shares have not seen since, well, November 2007.
Shareholders were to reconvene Thursday morning with voting to conclude Friday at a meeting of Keynote's board. The measure passed, according to a news release issued Friday afternoon that did not include the final margin.
more...http://www.mercurynews.com/business/ci_11845701?nclick_check=1