Shareholders of Westwood One will now vote August 3rd on whether to approve lots more shares and then a reverse stock split. The first attempt at the special meeting was adjourned without action in June.
Problems with the original proxy have been corrected, so the company will now be able to have shareholders vote on five amendments to the company charter. The most important are the first two. Number One will increase the number of authorized shares from 300 million to five billion, which will accommodate the common shares that the Gores Group could convert other securities to under the recapitalization plan which saved the company from th brink of bankruptcy in April.
Number Two will authorize a reverse split of one new share for each 200 currently held. That will boost the stock price, currently just pennies, to make it more attractive to Wall Street investors. Westwood One has already filed to offer $50 million of stock to the public, some from the company and some from the Gores Group, after the reverse split takes place.
To comply with Delaware law, the original proxy has been revised to have voting by the classes of stock. Also, the new record date for share ownership to be eligible to vote is July 16th. All shareholders must submit new proxies for their votes to be counted.
The approval of Proposal 1 will require the affirmative vote of the stockholders representing:
(i) a majority of the Company’s outstanding common stock voting separately as a class (and not including any Preferred Stock otherwise entitled to vote with the common stock), and
(ii) not less than seventy-five percent (75%) in voting power of the Company’s outstanding voting securities, including the common stock and Preferred Stock voting on an as-converted basis, voting together as a single class.
The approval of Proposals 2 – 5 will require the affirmative vote of the stockholders representing not less than seventy-five percent (75%) in voting power of the Company’s outstanding voting securities, including the common stock and Preferred Stock voting on an as-converted basis, voting together as a single class.