North Star Partners Urges Checkpoint Systems Shareholders To Withhold Votes For The Company Nominated Directors At The Upcoming Annual Meeting
WEST PORT, Conn., May 11, 2015 /PRNewswire/ -- NS Advisors, LLC ("North Star", "North Star Partners", "we" or "us") currently owns 843,095 shares of Checkpoint Systems, Inc., making it a top ten shareholder of the company. North Star has been in dialogue with Checkpoint's board over the last several months, seeking shareholder representation on the board and asking that the board be de-staggered. Due to the board's refusal to implement these shareholder friendly initiatives, North Star is releasing the following letter asking fellow shareholders to withhold voting for the company directors until such changes are made.
May 8, 2015
Mr. William S. Antle, III
Chairman of the Board
Checkpoint Systems, Inc.
101 Wolf Drive
Thorofare, NJ 08086
Dear Mr. Antle:
We are writing to express our disappointment that you refuse to implement the shareholder friendly initiatives we outlined in our letter of April 7, 2015. This reaffirms that you and the Board continue to place your own interests ahead of the shareholders that you have a fiduciary responsibility to represent. To reiterate our concerns, we believe the extraordinarily poor operating results and stock price performance this board has delivered over the last ten years demands a change in board composition and company policies that will put the company on a path to recovery. The facts are indisputable. Your continued intransigence to change is impossible to understand in the context of modern corporate governance norms.
Prior to the issue of this year's proxy statement, we specifically asked the Board to add two shareholder nominated directors to the board (and to include them in the 2015 proxy) and initiate the process of declassifying the board of directors. Upon issuance of the proxy statement last week, we learned that you have not only ignored these two reasonable requests, but the Board has deliberately also failed to nominate a director to replace Sally Pearson who declined to stand for re-election – thereby creating a vacancy on the Board. It appears the Board's intention is to fill the spot with a nominee of its own selection after the annual meeting, thereby denying shareholders the opportunity to vote for or against the person who will fill this spot. We find it outrageous that you and the other board members – two of whom are currently standing for re-election -- would deny shareholders the fundamental right to vote on those who are supposed to represent them. Given this vacancy, we believe the board should immediately postpone the currently scheduled annual meeting until a future date when the company can present a full slate, including two shareholder nominated directors. Only by including nominees suggested by the shareholders in the process will the board be able to retain any sense of legitimacy.
Shockingly we also learned on last evenings' earnings call that the company is pursuing acquisition opportunities that could severely leverage the balance sheet (debt up to 3 times ebitda according to the CEO). As we pointed out in our April 7, 2015 letter, over the past 10 years the company has spent over $660 million of the shareholders money on acquisitions, R&D and cap-ex, yet the company's market-cap has declined by $255 million. Given the board's poor capital allocation record, it is paramount that no acquisitions be made until investors have adequate representation on the board.
Because of the Board's consistent disregard for shareholder rights, we will withhold our votes for this year's nominees to the Board should you proceed with the meeting as scheduled. We call on our fellow shareholders to demand the meeting be postponed and to withhold their votes should the company continue to ignore shareholder democracy. The issues are critical and shareholders need to act now before it is too late. An arrogant and entrenched board is a recipe for poor operating results, and regrettably, Checkpoint is a case study in that unfortunate outcome. While the Board continues to collect its fees, the shareholders continue to suffer. Directors who do not hold themselves or their fellow board members accountable for continued dismal financial performance do not deserve to continue to represent the shareholders. The suffering will not end until the Board is changed. We urge all shareholders to join us in demanding change that will restore shareholder rights and put us on a path to creating shareholder value.
Sincerely,
Andrew R. Jones, CFA
We urge shareholders to "Withhold" their votes from George Babich, Jr. and Julie S. England on the Company's proxy card. This is not a solicitation of authority to vote your proxy. Do NOT send North Star Partners your proxy card as it will not be accepted.
Contact: Andrew Jones, 203-227-9898
SOURCE North Star Partners
Share this article