frobinso: Just some comments to point out that things are never as simple as they might seem.
IDCC's capital structure is set out in the Articles of Incorporation, not the By Laws. Right now 100 million shares of common stock with a $0.01 par value are authorized. To change this number would require an amendment of the Articles, which would have to be done IAW Pennsylvania law. I don't know what the rquirements are, but I noticed that most changes in authorized shares are done after a BOD proposal and stockholder vote.
Your proposal to not increase the number of authorized shares has at least two problems. First, if it is classified as a stock split, even if there are enough unissued shares to cover the outstanding shares, the total shares authorized would still have to be changed. As noted, this would probably require a shareholder vote, which you are trying to avoid. Secondly, you have to consider the approximately 8 million outstanding options. Since the option programs probably have an anti-dilutive feature, a 2 for 1 split would require that approximately 16 million authorized but unissued shares be available to cover outstanding options.
What could be done without increasing the number of authorized shares would be to declare what is categorized as a large (i.e. over 25%) stock dividend. This would require some calculations to keep the additional shares issued within the current authorized share total, and some special accounting treatment, but nothing difficult. Again, the calculation would probably have to also consider the effect of outstanding options. I doubt that they would take this approach.
Spencer: I'm speculating, and that genius Olddog can quickly clear this up, but I believe the company bylaws set a limit to the overall outstanding shares - say 100 million. And to increase that number by making a change to the bylaws would take a shareholder vote (which could only be nixed in a vote due to painful memory of managements historical propensity to line their pockets w/shares at the dilution of all shareholder,s interests (i.e. stock compensation program), creating predictible fluries of form 4 insider stock sale disclosures anytime the stock increases (today does not qualify - a non-event)).
However, if a share repurchase program would allow us to get under the threshold to multiply the existing outstanding shares by 2 while still staying within the overall authorized shares allowed in the by-laws, then a 2 for 1 split could be announced, pending shareholder approval, without the need to have the overall number of authorized shares increased in our bylaws(a dilutionary event also subject to shareholder vote, but perhaps w/less chance of approval at this time).
Does any of that make sense? I, for one, hope they are positioning for a stock split.
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