Circuit City Shortening Its Board
by Alan Wolf -- TWICE, 4/8/2008
Richmond, Va. — Circuit City intends to trim its board by one seat, to 11 directors, reducing the number of directors up for election in June from five to four.
Subsequently, the company has asked activist investor Mark Wattles to withdraw one of his five board nominees from consideration.
In a letter to Wattles dated Feb. 28 and filed with the U.S. Security & Exchange Commission yesterday, Circuit’s general counsel Reginald Hedgebeth indicated that the board will not fill the vacancy of a retiring director, and that it intends to amend the company’s bylaws to reduce the number of seats from 12 to 11 in time for the June 24 shareholders meeting.
Hedgebeth also reiterated Circuit’s request to meet with Wattles’ nominees — a meeting that the Ultimate Electronics owner said would only take place if Circuit’s directors unconditionally backed his nominees. Lead director Mikael Salovarra has called Wattles’ terms “unusual and unreasonable.”
Wattles, who controls 6.5 percent of Circuit City’s stock, is seeking to replace five board members with his own candidates and to oust CEO Phil Schoonover in order to improve the company’s performance.
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