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Icahn-Controlled Firm Seeks to Reincorporate in North DakotaSubmitted by: Ted Allen, Publications

Carl Icahn is practicing what he preaches.

American Railcar Industries, which is controlled by Icahn, will ask its investors on June 10 to approve moving the company?s corporate home from Delaware to North Dakota.

Shareholder approval is not in question since Icahn, who serves as chairman, and other directors own 56.7 percent of the Missouri-based company. American Railcar would become the first public company to reincorporate in North Dakota and agree to be subject to the state?s novel corporate governance law, which was passed in 2007 after a lobbying campaign that Icahn supported. The billionaire investor has said he pushed for the law to provide an alternative to Delaware, where more than 60 percent of large-cap U.S. companies are incorporated. Icahn has complained that Delaware laws and courts unduly favor management interests in disputes with shareholders.

The North Dakota law requires firms to provide a wide range of shareholder-friendly governance provisions, such as proxy access, an independent board chair, a declassified board, limits on poison pills, and an annual advisory vote on compensation. In a preliminary proxy filing, American Railcar asserts that a move to North Dakota will give investors more rights while reducing the firm?s franchise taxes.

Icahn also has filed a North Dakota reincorporation proposal at Amylin Pharmaceuticals, where he has a 9.2 percent stake and is waging a proxy fight at the company?s May 27 meeting. In addition, individual investors have filed similar proposals at 17 other firms this year. These resolutions will be on the ballot at Sempra Energy on April 30, Amgen on May 6, and at PG&E and Qwest Communications on May 13. So far, those proposals have averaged 6 percent support at three companies, according to RiskMetrics Group data.

Full post as published by Institutional Shareholder Services -- Corporate Governance Blog on April 24, 2009 (boomark / email).