Emmis Shareholder Vote Approves Controversial Move To Reissue Preferred Stock
April 3, 2012 at 3:50 AM (PT)
As expected, EMMIS COMMUNICATIONS shareholders on MONDAY voted to approve the company's institution of an employee retention plan and trust and reissuance of 400,000 shares of Preferred Stock to be voted on behalf of the company.
The approval, a step towards stripping Preferred Stock of its rights and most of its value, was a formality since EMMIS' JEFF SMULYAN owns a majority of shares in the company. Reissuance of the stock allows EMMIS to effectively vote a 2/3 majority of Preferred Shares and thus convert Preferred Shares to common stock, and to avoid paying $26.7 million in dividends to Preferred shareholders that have been in arrears since OCTOBER 2008, when the company began to exercise its right to suspend the payments.
Another meeting will be held to vote on plans to strip remaining rights from Preferred Stock, including electing two directors to the board, and a vote on the company's proposed reverse stock split is also forthcoming. In MONDAY's vote, Preferred shareholders elected MICHELLE BERGMAN to the board of directors.