Newspaper article THE JOURNAL RECORD

Fleming Investors OK Board Reshuffle

Newspaper article THE JOURNAL RECORD

Fleming Investors OK Board Reshuffle

Article excerpt

Though Fleming says it "made a lot of progress" in 1997, some 73 percent of shareholders voting at Thursday's annual meeting want a way to reshuffle its board.

Shareholders approved a declassification of Fleming's board of directors allowing for the annual election of board members, as opposed to staggered terms currently in the wholesaler and marketer's charter.

But whether the vote has any real teeth remains uncertain. "The requirement is virtually nothing other than to listen and to respond to it," said Fleming's Chair and Chief Executive Robert Stauth. "It is non-binding meaning that the directors have complete control over this particular decision." Stauth added that the board will take the issue "very, very seriously," and that a special committee may be appointed to consider the matter. The declassification item on the agenda was prompted by officials from the New York City Fire Department Pension Fund, which holds 7,400 shares of Fleming common stock. The New York City retirement system in aggregate owns 188,923 Fleming shares. Francis Byrd, representing the fund, saw the vote as a victory for management accountability. "A classified board structure isolates the board members and management from shareholders and doesn't allow shareholders to reach out to board members on an annual basis," Byrd said. Because Fleming's classified structure is part of the company charter, the only way to change that structure is by a vote of the shareholders after the board has recommended a change. "There's nothing beyond an advisory position that a decision like this can make," said Fleming Senior Vice President and General Counsel David Almond. At last year's meeting, shareholders stripped directors of their exclusive control over poison pill plans designed to thwart hostile takeovers. Instead, shareholders now can vote to implement such a plan. …

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