IOMEGA SHAREHOLDERS PROTEST THE UPCOMING REVERSE SPLIT PROXY PROPOSAL FROM THE COMPANY - POTENTIAL OF DIMINISHED RIGHTS AT QUESTION
AUSTIN, TX -- (PRnetwire) -- August 29, 2001 -- Shareholoders Group Urgent Notice regarding Iomega Corporation Common Stock held on or before August 16, 2001 (record date). This concerns the Reverse Split Proxy being solicited by and recommended through the Board of Directors of Iomega Corporation (NYSE: IOM)
IMMEDIATE ACTION BY SHAREHOLDERS IS SOUGHT TO PROTECT THEIR INTERESTS.
On September 28, 2001 at 9:00 am MST, the Iomega Board of Directors has scheduled a vote for a 1 for 5 reverse stock split. Management has given its reasons for this recommendation in a recent August 2001, SEC filing (form 14 (a)).
Hundreds of IOM shareholders representing millions of shares have come together to dispute the reasoning behind the reverse split recommendation put forth by the Iomega Board of Directors. Of particular concern to these shareholders is the fact that Iomega DOES NOT INTEND to reduce the total shares it is authorized to issue as a result of this reverse split. If this proxy gains approval, shares would NOT BE PERMENENTLY REMOVED from use by the company. All shares surrendered by the current shareholders in this reverse split would become available for later issuance by the company.
By using the word "may" Iomega understates this aspect of their proposal in the SEC filing when it says - "The number of authorized shares of Iomega's common stock, which currently is 400,000,000, will not be reduced as a result of the reverse stock split. Consequently, the number of authorized but unissued shares of common stock will increase as a result of the reverse stock split. The issuance of such authorized but unissued shares [MAY] have the effect of diluting the earnings per share and book value per share, as well as the stock ownership and voting rights, of outstanding common stock."
Thus, the proposal could dramatically dilute the ownership interest of current shareholders if Iomega were to issue, at a future date, any or all of these shares in the open market, or if it were to otherwise distribute shares to Iomega employees or company directors, directly or through stock options.
First, institutional owners of Iomega common stock should be aware that they could vote in an unintentional manner. Managers of mutual funds or administrator's of pension plans holding Iomega stock should pay particular attention to the potential risk associated with returning unspecified proxies to Iomega. According to the Iomega SEC filing, any proxies returned on behalf of their clients or their fund WITHOUT INSTRUCTION (blank) will AUTOMATICALLY default as VOTES IN FAVOR of the reverse split. All brokers, mutual fund managers, pension plan administrators and trustees who hold or manage shares of Iomega are encouraged to be extremely circumspect when considering how to vote on this particular proxy from Iomega.
Second, individual owners of Iomega common stock should be aware that authorizations previously given to brokers to vote shares held "in street name" could result in proxies returned and counted contrary to the current wishes of the individual owner. An individual shareholder may need to contact his or her broker to insure that proxies are voted in keeping with the owner's current wishes.
Again, the dissident shareholders encourage all IOM shareholders, large and small, to vote this proxy matter only after adequate time has been taken to understand the meaning of the recommendation fully. Agents or authorized representatives who manage Iomega shareholder interests are encouraged to contact their clients directly to solicit particular instruction on this matter. The Iomega Shareholders Group encourages every person to thoroughly consider both the short and long term affects of what the Iomega Board of Directors is recommending and the potential this recommendation, should it pass, will have to POTENTIALLY DIMINISH all common stock ownership rights in Iomega. In this particular instance, the group believes that the Board of Directors of Iomega has recommended a matter to the shareholders, which is NOT in the shareholders long-term best interest.
Concerned Iomega shareholders may send email to iomshareholders@prodigy.net to discuss the reverse split and other Iomega issues. Iomega shareholders have set up a private and secure internet message board for group communication. Shareholders can find out more about membership to this board through inquiry to the above email address.
Note: Iomega shareholders are eligible to vote on the reverse split proposal if they owned the stock as of the close of business August 16, 2001, even if they have since sold those shares. A shareholder may need to contact their broker to find out how to vote sold shares. All Iomega shareholders have certain rights including a right to change a voted proxy. Shareholders considering a change in vote should contact their broker to discuss these rights.
This release is for informational purposes only. Nothing in this release is intended or should be construed as specific instruction to any firm or any person on how to vote their proxy. How a firm or individual votes their shareholder interest and exercises their shareholder rights is strictly up to them as holders of common stock in the subject corporation.
CONTACT:
Iomega Shareholders Group
Group Secretary, Steve Wirth
1-512-682-6935 ext 2842
email: iomshareholders@prodigy.net
or iomgroup@onebox.com
Web site: http://pages.prodigy.net/paulw7/index.html
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