In a move to add more grist to the mill, an attorney representing Yahoo shareholders dished up more material to support a call for a speedy hearing date on the company's controversial employee severance plans, according to a letter sent Wednesday morning to the judge overseeing the shareholders lawsuit.
Plaintiffs in the shareholders lawsuit are asking the judge to set a trial date to invalidate the severance plans, prior to Yahoo's annual shareholders meeting on August 1.
That's because, as previously reported, billionaire investor Carl Icahn's proxy fight could be in jeopardy if the severance plans remain in place. If Icahn is successful in getting his dissident directors slate elected to a majority of the board seats, it would set off the first phase of Yahoo's severance plans. The second phase would kick in if full-time employees are either terminated or resign because their jobs, or responsibilities, had been greatly altered. Yahoo's outside compensation consultants note the plans could cost upwards of $2.1 billion if all of the company's full-time employees made use of the severance plans.
In the letter to Delaware Chancery Court Chancellor William B. Chandler III, the plaintiffs' attorney, Joel Friedlander of Bouchard Margules & Friedlander, states:
Yesterday, Yahoo!, Inc. ("Yahoo") filed proxy materials confirming that a successful proxy contest by Carl Icahn would satisfy the first trigger of the Severance Plan, thereby allowing any employee to obtain full severance benefits if the employee is subsequently terminated or if the employee resigns based on a "substantial adverse alteration in the employee's duties or responsibilities." Yahoo further confirmed that the Severance Plan cannot be terminated during the pendency of the proxy contest and cannot be terminated by nominees elected by Mr. Icahn following a proxy contest.
If Yahoo's goal in filing these supplemental proxy materials was to somehow negate the grounds for a prompt trial, they have accomplished the reverse.
The letter to Chandler goes on to cite a post in Silicon Alley Insider, which attributes the severance plans as yet another reason why the blog's author, Henry Blodget, would not vote for Icahn's proxy slate.
Friedlander, in the letter, then asks Chandler to set a trial date to consider the employee severance plans as "promptly as the court's schedule permits."