PENN Shareholders Overwhelmingly Approve UNITE HERE Resolution to Declassify the

23 June 2010

PHILADELPHIA--(BUSINESS WIRE)-- Wednesday at the Annual Meeting of Penn National Gaming, Inc. (NasdaqGS: PENN) shareholders voted overwhelmingly to approve a shareholder proposal calling for a repeal of the company’s classified board structure and for the annual election of directors.

Currently the board is made up of three director classes, each serving a staggered three year term. According to the company, over 44 million votes were cast in favor of the proposal, with only 22 million cast against. The shareholder proposal was submitted by UNITE HERE.

ISS Proxy Advisory Services recommended that shareholders vote for UNITE HERE’s proposal. “The ability to elect directors is the single most important use of the shareholder franchise, and all directors should be accountable on an annual basis,” ISS wrote in a May 25 report on Penn National Gaming, Inc. ISS also noted that “a classified board can entrench management and effectively preclude most takeover bids or proxy contests.”

ISS also recommended a withhold vote on two of the company’s directors: Barbara Shattuck and Wesley Edens. ISS said that as a compensation committee member, Shattuck should not have allowed the company to put in place “single-trigger change in control agreements,” pursuant to which certain top executives could receive windfall payments, without terminating their employment, if the company were to be acquired. ISS also recommended against director Edens because he serves on more than six corporate boards, and is therefore considered overextended pursuant to ISS policy. Despite these recommendations, a majority of shareholders voted for the two directors.

“Hopefully Penn will heed the overwhelming desire of shareholders to end the classified board system and hold directors accountable on an annual basis,” said Kate O’Neil, research analyst with UNITE HERE. “Shareholders will be watching to see how the company responds to this vote and will continue to press the board to eliminate the shareholder-unfriendly double trigger arrangement.”




Source: UNITE HERE

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