Xerox Tells Deason: Forget Nominating Any Board Members

In a terse letter to Xerox investor Darwin Deason included with Xerox’s Form 8-K filed with the U.S. Securities and Exchange Commission, the company addressed Deason’s demand to nominate members to Xerox’s board of director.

The March 1, 2018, which was signed by Robert J. Keegan, chairman of the board for Xerox, refusing to grant Deason a waiver to nominate directors to the Xerox Board of Directors.

The letter stated: “Xerox has concluded that you do not have any right to a waiver of Xerox’s advance notice bylaw provision, and therefore to nominate directors to serve as members of the Xerox Board of Directors outside of the nomination window.”

Deason, along with billionaire activist investor Carl Icahn, have sought to derail Xerox’s proposed merger with Fuji Xerox, with Fujifilm of Japan having a controlling 50.1 percent of shares, with current Xerox CEO Jeff Jacobson serving as president of the new company. Xerox shareholders will vote on the proposed merger at an upcoming shareholder meeting in May 2018.

Earlier this week, Deason sought to nominate a full slate of directors to the Xerox board at the May 2018 meeting, despite missing a deadline for putting forth directors. There are currently 10 directors on Xerox’s board. Deason says Xerox shareholders should have a chance to vote on all members of the Xerox Board of Directors at the meeting in May.

Deason also filed a lawsuit last month seeking to block the merger.

Together, Deason and Icahn own about 15 percent of Xerox shares. They’ve argued that the proposed transaction dramatically undervalues Xerox and “disproportionately” favors Fujifilm, and that Xerox and its shareholders would be better off with Xerox sold to a competitor or to a private-equity firm.

Fuji Xerox is Xerox and Fujifilm’s five-decade-old joint copier/MFP venture that focuses on the Asia-Pacific region, which Icahn and Deason argue has a previously undisclosed “crown jewel” lock-up right that gives Fujifilm control over Xerox’s intellectual property and manufacturing rights in the Asia-Pacific market if Xerox sells a 30-percent stake to another suitor, according to Deason’s lawsuit.

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