By a narrow margin, the Tampa company's largest independent shareholder fails to win a seat on the board.
Excal Enterprises Inc., the Tampa company that once helped Sears balance tires and now owns real estate and a sports clothing business, narrowly thwarted a challenge to its management Wednesday.
Shareholders representing slightly more than 51 percent of the company's stock voted to keep John L. Caskey on the board of directors, barely defeating dissident Jeff Eisenberg's attempt to gain a seat on the board.
Eisenberg, who manages Chicago's EP Opportunity Fund LLC, is the largest independent investor in the company, with about 14 percent of the stock. He has said the company's top managers pay themselves too well and are indifferent to shareholders. He also has criticized the company's move into the unfamiliar sports clothing business.
A resolution proposed by Eisenberg that would have required a unanimous vote of all the company's directors to change company bylaws also failed because it lacked the required majority of all shares. Shareholders representing about 46 percent of all stock voted for the change, while 43 percent voted against it.
The narrow defeat of Eisenberg's challenge should send a message to management that many of the shareholders who are not part of management are unhappy, said Susan Rabinowitz, who represented Eisenberg at the meeting.
No message was sent by the dissidents' show of support, said Excal's board chairman R. Park Newton III.
"The majority HAS spoken," Newton said.
Company officials said management holds about 35 percent of the voting stock, less than previously reported, because stock options carry no votes.
Eisenberg blames poor management for the company's stock trading at about half of its high of nearly $6. Newton countered that the high was an aberration caused by a buying frenzy by Eisenberg and several other large institutional investors in late 1997. Since then, Newton said, the stock has simply settled back to its natural level. On Thursday, the stock closed unchanged at $3.18} a share.
The company's public life began in late 1993, trading for about 25 cents a share, Newton said. "That's pretty steady growth to me," he said.
Excal has faced charges by the Securities and Exchange Commission that it hid its financial losses, filed inaccurate records and lied to company auditors.
The company began as a supplier of tire-balancing equipment called Assix International, with a contract with Sears, Roebuck & Co. That association led to allegations in a lawsuit that Sears paid it hush money to keep a tire-balancing scam quiet.