Potlatch drops ‘time-phased voting’

Potlatch Corp. shareholders voted to ditch “time-phased voting” at the company’s annual meeting Monday.

With 73 percent of votes cast in favor, the shareholders adopted a “one share, one vote” resolution sponsored by the company’s board of directors.

Time-phased voting rewards long-standing shareholders by giving them more votes per share. In Potlatch’s case, shareholders who owned their stock for four or more years got four votes for each share. Newcomers received just one vote per share.

The company adopted time-phased voting in 1985, after rebuffing a hostile takeover. Various firms embraced the structure in the 1980s in an effort to ward off hostile takeovers. The New York Stock Exchange later banned time-phase voting, though companies that already had it in place were allowed to continue it.

Potlatch’s corporate investors lobbied for the change. They said it diluted their influence, and put a downward pressure on the forest-product company’s stock.

“It’s anti-democratic,” David Winters, chairman of Franklin Mutual Advisers LLC, said during a January interview. “It serves to entrench the management.”

Potlatch’s board of directors will look at other ways to protect long-term shareholders in the event of a takeover, said Mike Sullivan, Potlatch’s spokesman. A shareholder rights’ plan is one possibility. Shareholders rights’ plans can be set up several ways, including allowing longtime shareholders to purchase shares of discounted stock in the event of a hostile takeover.

Second Vioxx trial postponed

Lawyers for Merck & Co. and plaintiffs have agreed to postpone what is slated to be the second wrongful death trial over Vioxx, the company’s withdrawn pain reliever.

The parties agreed to move the trial’s start to July, plaintiff attorney Mark Lanier said Tuesday. The trial had been scheduled to begin May 31 in Angelton, Texas. State District Judge Ben Hardin, who is scheduled to preside over the case, would have to approve any agreement.

Last week, Merck and plaintiff lawyers filed a motion to delay what is slated to be the first trial, scheduled for May 23 in Ashland, Ala. That delay was requested by U.S. District Judge Eldon E. Fallon of New Orleans who is coordinating all the federal Vioxx cases.

But Clay County Circuit Judge John Rochester, who is handling the Alabama case, said at a hearing on Tuesday that he wanted to talk to Fallon and other state judges before delaying the case. Rochester said there was little point in delaying the case if other trials are held as scheduled. The Texas case is the only other trial with a definitive start date.

Ex-Tyco chief ends testimony

Former Tyco International Ltd. CEO L. Dennis Kozlowski finished four days of testimony at his grand larceny trial, insisting Tuesday that he left it to lawyers and accountants to decide what to tell shareholders about his compensation.

Testifying only briefly in state Supreme Court in Manhattan in response to followup questions from his lawyer, Kozlowski acknowledged that as CEO he signed the company’s most important documents relating to what was publicly reported about his finances.

He said he trusted the decisions of the lawyers and accountants and did not direct them on whether to include information on public documents such as tens of millions of dollars in loans that were forgiven as part of his annual bonus packages. Kozlowski also testified that he did not notice that $25 million in bonus payments used to pay off a company loan was not included on his tax forms from the company for 1999.