By Kate O'Keeffe
HONG KONG-- Wynn Resorts Ltd. is seeking to block Elaine Wynn--a
major shareholder, longtime director and the ex-wife of company
Chairman Steve Wynn--from its board, in the latest tussle at the
casino operator with resorts in Las Vegas and Macau.
The board decided not to renominate Ms. Wynn, who has served for
more than a dozen years, once her term expires at the company's
next annual meeting April 24, according to a Friday filing by the
company. The board said a committee cited concerns about Ms. Wynn
including: a lawsuit she filed against Mr. Wynn to remove
restrictions on her shares, "actual or potential conflicts of
interest," and her "lack of independence under Nasdaq listing
standards and resulting inability to serve on key board
committees," the filing said.
In a letter dated Feb. 13, Ms. Wynn told the company that, if
the board failed to nominate her to serve another three-year term
as a director, she would nominate herself and deliver a proxy
statement to stockholders, the filing said. Her representatives
didn't immediately return a request for comment on Sunday
night.
As of Sunday, "the company isn't aware that she has filed her
own statement," said Michael Weaver, Wynn's senior vice president
of marketing.
"Steve Wynn supported the candidacy of Elaine Wynn, but the
board, as a whole, accepted the recommendation of the nominating
and corporate governance Committee in electing to reduce the number
of inside directors and not renominate her," said Mr. Weaver.
The decision not to renominate Ms. Wynn follows a move three
years ago by Wynn Resorts to oust its then-largest shareholder
Kazuo Okada by forcibly redeeming his 20% stake in the company at a
30% discount and kicking him off the board after alleging he was
involved in corrupt activity.
Mr. Okada continues to fight to get the shares back and denies
allegations of wrongdoing, according to court filings and a
spokesperson.
Following Mr. Okada's ouster, Ms. Wynn in June 2012 filed suit
in the U.S. District Court in Nevada to remove restrictions on her
own shareholding in the casino company, alleging the premise for
the restrictions was no longer valid.
During the Wynns' divorce proceedings, which began in 2009, Mr.
Wynn urged Ms. Wynn to sign the agreement restricting her shares,
according to Ms. Wynn's suit. Mr. Wynn told a reluctant Ms. Wynn
that if she didn't agree to the restrictions, Mr. Okada would have
an opening to renegotiate his own restrictions, which Mr. Wynn
didn't want, the suit said.
Ms. Wynn's principal reason for eventually agreeing to sign the
deal "was to support and avoid undermining the existing alliance
and agreement between Mr. Wynn and Mr. Okada," according to the
suit. However, "Now that the shares held by Mr. Okada's company
have been redeemed, the purpose of the stockholders agreement has
been frustrated, and the basis for enforcing the agreement's
restrictions has been eliminated," the court papers say.
Mr. Wynn continues to oppose his former wife's suit.
If Ms. Wynn were allowed to sell her shares without
restrictions, it could erode Mr. Wynn's control over the
company.
Until the implosion of the business partnership with Mr. Okada
that was also subject to the shareholder agreement, Mr. Wynn had
controlled nearly 40% of the company despite owning less than 10%.
Now T. Rowe Price Associates Inc., not subject to the agreement, is
the company's largest shareholder at 16.8%. Mr. Wynn is the
second-largest shareholder with 9.9% of the company, while Ms. Wynn
is its third-largest, owning 9.4%.
Ms. Wynn and Mr. Wynn first married in 1963 and divorced in
1986. They remarried five years later. Ms. Wynn has been a director
at Wynn Resorts Ltd. since 2002 and was a director of Mirage
Resorts Inc., Mr. Wynn's former company, from 1977 to 2000. In her
lawsuit, she described her duties as "personnel management, public
relations, and design of the ambience and customer experience at
Wynn Resorts properties."
The couple finalized their second divorce in 2010.
Mr. Wynn married British socialite Andrea Hissom in 2011.
Write to Kate O'Keeffe at kathryn.okeeffe@wsj.com
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