QUINCY, Ill.Titan International Inc. is proposing to reincorporate in Delaware in order to take advantage of the state's comprehensive, flexible corporate laws responsive to the legal and business needs of corporations.
The Quincy-based tire and wheel maker is urging its shareholders to approve the move at the company's upcoming annual meeting, which is scheduled for June 4 at Titan's facility in Union City, Tenn., according to the Titan's proxy statement filed with the Securities and Exchange Commission.
Titan did not say in its proxy whether it would consider moving the firm's headquarters physically to Dela-ware. Many companies incorporated in Delaware don't. Among them is Cooper Tire & Rubber Co., which has its base of operations in Findlay, Ohio.
Titan's board has approved the move unanimously and is recommending share-holders approve the proposal as well. The proposal will require the approval of holders of two-thirds of the outstanding shares of the company entitled to vote on the proposal.
Among the reasons Titan International lists for its wanting to reincorporate in Delaware are:
c The development in Delaware over the last century of a well-established body of case law construing the Delaware General Corporation Law (DGCL), which provides businesses with a greater measure of predictability than exists in any other jurisdiction;
c The certainty afforded by the well-established principles of corporate governance under Delaware law are of benefit to Titan (Illinois) and its shareholders and should assist Titan (Illinois) in its ability to continue to attract and retain outstanding directors and officers;
c Delaware corporate law, which is updated annually to reflect business needs and developments, is generally acknowledged to be the most advanced and flexible corporate statute in the country;
c The Delaware Court of Chancery, which brings to its handling of complex corporate issues a level of experience, a speed of decision and a degree of sophistication and understanding unmatched by any other court in the country, and the Delaware Supreme Court, the only appeals court, which is highly regarded and has demonstrated its willingness to schedule and rule on business matters on an expedited schedule where prompt resolution is important to the business needs of the parties involved;
c The Delaware General Assembly, to meet changing business needs, considers and adopts annually statutory amendments to the DGCL that have been proposed by the Corporation Law Section of the Delaware bar; and
c The Delaware Division of Corporations has a procedure for preclearance of corporate filings and offers same day, two-hour, one-hour and half-hour processing of corporate filings, thus allowing prompt and efficient evidence of filings and certifications to be obtained to facilitate business and transactional needs, and also has a procedure to accommodate closings occurring in international time zones outside of normal business hours or on weekends or holidays.
Titan did not comment on what costs it might incur to reincorporate nor what savings it might expect to realize.
If shareholders approve the move, Titan said its affairs would cease to be governed by Illinois corporation laws and would instead become subject to Delaware corporation laws.
The company said a reincorporation would not affect the trading of its shares on the New York Stock Exchange under the same symbol, TWI, and shareholders' stock holdings would not be affected.
This report first appeared on www.tirebusiness.com.