{"id":470886,"date":"2010-03-25T10:29:38","date_gmt":"2010-03-25T14:29:38","guid":{"rendered":"http:\/\/www.footnoted.org\/?p=4645"},"modified":"2010-03-25T10:29:38","modified_gmt":"2010-03-25T14:29:38","slug":"round-1-%e2%80%9cduking-it-out-in-the-boardroom%e2%80%9d%e2%80%a6","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/470886","title":{"rendered":"Round 1: \u201cDuking it Out in the Boardroom\u201d\u2026"},"content":{"rendered":"

\"boxers<\/a>It\u2019s inevitable that a company\u2019s directors are going to disagree from time to time. But rarely do those spats play out as publicly as some that we\u2019ve seen recently. (In the interest of keeping this post at a reasonable length, we\u2019ll write about one company today and another one tomorrow.)<\/p>\n

BioMarin Pharmaceutical, Inc.<\/a> (BMRN) filed an 8-K<\/a> yesterday to disclose that director Joseph Klein III had resigned last Friday. Klein, who served as a director on BioMarin’s board for nearly five years, chaired the Audit Committee and served as a member of the Corporate Governance and Nominating committees.<\/p>\n

In Klein\u2019s resignation letter<\/a>, he states that he has \u201cfundamental disagreements with the Board on how the Board approaches its governance and oversight responsibilities.\u201d<\/p>\n

Klein asserts that earlier in March, Chairman of the Board Pierre Lapalme called to inform Klein that he was not being re-nominated to serve as a director. Both sides agree that Klein then called each of his fellow directors in an attempt to persuade them to reconsider their decision to not re-nominate him as a director.<\/p>\n

The company responds that the other board members \u201c\u2026take exception to Mr. Klein\u2019s characterizations of facts and his conclusions.\u201d They also claim that if Klein really had \u201cfundamental disagreements with the Board,\u201d he wouldn\u2019t have tried to convince his colleagues to change their minds and put his name back on the slate of directors to be elected. They declined to do so, stating that they had \u201clost confidence in Mr. Klein\u2019s ability to work constructively with the rest of the Board members and management of the Company.\u201d<\/p>\n

After that, every issue that Klein raises and the company rebuts takes on a \u201che said\u201d v. \u201cshe said\u201d tone.<\/p>\n

Klein claims his colleagues didn\u2019t like \u201cHow and When I ask questions as Chairman of the Audit Committee.\u201d (The company\u2019s response: None of the board members had a problem with the substance of the questions \u2013 just the appropriateness of asking them \u201cin the presence of certain junior personnel.\u201d)<\/p>\n

Next, Klein states that he disagrees with the board on \u201cHow to Conduct an Ongoing Investigation of a Serious Matter.\u201d (The company replied that what\u2019s underway is a preliminary investigation, and that it is being taken seriously and handled appropriately.)<\/p>\n

Third, Klein says there\u2019s a \u201cDisagreement over How to Modify the Company\u2019s Poison Pill.\u201d (Here the company says that discussions about a stockholder rights plan and what it should say doesn\u2019t rise to the level of a disagreement. Also, \u201cthe Board cannot reconcile how the changes to the Company\u2019s stockholder rights plan could be deemed to be a disagreement that ultimately caused Mr. Klein to resign since the Board made the decision in February 2009 and Mr. Klein continued to serve as a director for over a year following the adoption of the Company\u2019s existing stockholder rights plan.\u201d)<\/p>\n

Fourth, Klein claims there is a \u201cDisagreement with the CEO on How and When the CEO should present to our entire Board a serious, reasonable offer by a third party to acquire the company.\u201d (The company claims that it \u201chas never received any such offer while Mr. Bienaim\u00e9 has been Chief Executive Officer.\u201d It also denies that it has sought to sell the company, claiming that \u201c\u2026the Board believes that the best course of action to maximize long-term stockholder value is to execute on the Company\u2019s long-term business plan as an independent entity.\u201d)<\/p>\n

And finally, Klein asserts that he has a \u201cDisagreement with the CEO over his Desire to Combine the Chairman and CEO Roles.\u201d (Not true, the company replied. It says that the board committees that would recommend such a change \u201chave to date unanimously determined that the current Board governance structure separating the Chairman of the Board and Chief Executive Officer roles continues to be appropriate at this time.\u201d)<\/p>\n

The company gave Klein a copy of its response. It also said in the 8-K that if Klein sends a reply, it will file his letter with the SEC within two business days after it is received.<\/p>\n

Join us again tomorrow for another exciting round of “Duking it Out in the Boardroom!\u201d<\/p>\n

Image source:<\/em> Claudiogennari<\/a> via Flickr<\/p>\n

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<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s inevitable that a company\u2019s directors are going to disagree from time to time. But rarely do those spats play out as publicly as some that we\u2019ve seen recently. (In the interest of keeping this post at a reasonable length, we\u2019ll write about one company today and another one tomorrow.) BioMarin Pharmaceutical, Inc. (BMRN) filed […]<\/p>\n","protected":false},"author":4072,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-470886","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/470886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4072"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=470886"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/470886\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=470886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=470886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=470886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}