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Citigroup shareholders reject 5 stockholder proposals

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Citigroup shareholders reject 5 stockholder proposals

The following is a summary of recent activist investor news from the bank and thrift space. Each company "in play" is listed along with the activist group and that group's ownership stake in the company, where applicable.

New York-based Citigroup Inc.

May 1: Five shareholder proposals were rejected at Citigroup's annual meeting held April 24.

They were proposals requesting: a human and indigenous peoples' rights policy; that the board take the steps necessary to adopt cumulative voting; an amendment to the company's proxy access bylaw provisions pertaining to the aggregation limit and the number of candidates; that the board adopt a policy prohibiting the vesting of equity-based awards for senior executives due to a voluntary resignation to enter government service; and that the board amend the company's bylaws to give holders in the aggregate of 15% of its outstanding common stock the power to call a special meeting.

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Seattle-based HomeStreet Inc.

Investor: Charles Griege Jr., Roaring Blue Lion Capital Management LP, et al., 6%

May 23: HomeStreet will count votes on activist shareholder Blue Lion's proxy cards on a provisional basis, subject to the final determination on whether those cards are valid.

Blue Lion disagreed that its proxy card may be invalid, but it has encouraged investors to vote on HomeStreet's proxy card to ensure all votes are counted.

May 22: Blue Lion encouraged shareholders to vote on HomeStreet's proxy card after the guidance from the Washington State Department of Financial Institutions indicated that a vote on the activist's proxy card may not be effective.

HomeStreet approached its state regulatory authority, the Washington State Department of Financial Institutions, in early March to determine whether voting on Blue Lion's proxy card is acceptable under Washington banking law.

The regulatory authority, in response, issued an interpretive letter regarding when a proxy challenge constitutes an investor seeking a change in control of the bank, which requires regulatory approval. HomeStreet said the interpretation showed that votes on the Blue Lion proxy card could be invalid. Blue Lion disagreed with this assessment, but encouraged investors to vote against HomeStreet's director nominees Scott Boggs and Douglas Smith on the HomeStreet-issued proxy card.

May 17: Mark Patterson, a HomeStreet board member, disagreed with proxy advisory firm Institutional Shareholder Services' recommendation that HomeStreet shareholders vote against lead independent director Scott Boggs' re-election to the board.

Patterson called Boggs a "terrific advocate for shareholders" who has a "great perspective on where the company has come from, where it is now and where it needs to go."

May 14: Proxy advisory firms disagreed on the nomination of one director at Seattle-based HomeStreet.

Glass Lewis & Co. recommended that shareholders vote for all three of HomeStreet's director nominees, while Institutional Shareholder Services recommended voting against director nominee Scott Boggs.

Both proxy advisory firms recommended voting for Douglas Smith and Mark Patterson. Blue Lion urged HomeStreet's shareholders to vote against the appointment of Boggs and Smith.

Blue Lion had previously pushed for the election of Ronald Tanemura and Paul Miller to HomeStreet's board. The investor later lost a preliminary court battle to nominate its own representatives to HomeStreet Inc.'s board.

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Blacksburg, Va.-based National Bankshares Inc.

Investor: Hilton Capital Management LLC

May 25: Activist investor Hilton Capital urged National Bankshares' president and CEO, Brad Denardo, to normalize the company's capital levels through repurchases and giving out a special dividend.

Cooper suggested that the excess capital be given back to shareholders through repurchases and special dividends. "Why wouldn't you, as a stockholder, want to benefit from this store of capital that you helped create?" he wrote. Dick Bove, chief strategist for Hilton Capital's financial opportunities strategy, added in a news release that returning all of the excess capital would benefit all shareholders.