Plans by Integral Systems, the satellite ground systems provider, to change its corporate governance are facing heavy resistance from US-based money manager Vintage Partners, its largest shareholder with around 10%, which is calling for a binding…
Plans by Integral Systems, the satellite ground systems provider, to change its corporate governance are facing heavy resistance from US-based money manager Vintage Partners, its largest shareholder with around 10%, which is calling for a binding stockholder vote before they take effect.
In an SEC filing on August 13, Integral Systems announced changes meaning shareholders could only dismiss directors with a two-thirds majority vote, instead of the existing simple majority requirement.
Convening a special meeting will also be made more difficult under the company’s plan, requiring a simple majority vote, rather than a previous 25%.
Andrew Miller, Integral’s vice president of external communications, said his board “took these actions to provide the opportunity and procedural support to ensure that we optimize shareholder value”.
On August 18, Brian Kahn, manager of Vintage Partners’ general partner, issued a letter to Integral’s board, expressing his company’s “surprise and dismay” over the changes.
“We believe these revisions serve to disenfranchise the company’s stockholders, seek to entrench the current board and management, and are contrary to principles of good corporate governance,” wrote Kahn. The letter also warned Vintage was “prepared to take immediate action, if necessary, to preserve stockholder value”.
Vintage did not reply to SatelliteFinance’s requests to clarify exactly what action it could consider. Integral posted a higher net loss of US$3.8m for the three months ended June 25, 2010, compared with a net loss of US$1.5m for the corresponding period in 2009.
Its Q3’10 revenue was US$44.4m, compared to US$39.8m for the same period last year.
