Dissidents Lose Bid for Seats on First Niles Board
NILES, Ohio – Dissidents Lance Osborne and Steven Passov lost Wednesday to incumbents James Kramer and attorney Robert Shaker in their bid for two seats on the board of First Niles Financial Inc.
The margin of defeat for Osborne, who owns 7% of First Niles shares, and Passov, a commercial real estate developer, was not disclosed.
First Niles is the holding company of Home Federal Savings and Loan Association of Niles, which has $98.5 million in assets and whose shares are traded over the counter.
The president and CEO, Lawrence Safarek, said he is “gratified with the results” but neither he nor the attorney for the company, James Wheeler, would disclose the breakdown of the shareholder votes for the competing slates.
Because the company does not file with the Securities and Exchange Commission – it ceased its filings in December 2006 – First Niles does not have to disclose the results and Wheeler made it clear that it would not.
Counting of the votes took some 15 minutes toward the end of the annual meeting that lasted about an hour. Only shareholders were admitted.
Because directors, management, employees and former employees own 45% of First Niles shares, Osborne and Passov faced an uphill battle. They needed roughly 93% of the remaining 55% of shares to be elected.
On their way out of the meeting, Osborne was visibly disappointed and told a reporter he would call later yesterday afternoon to discuss what took place and his next steps. He did not.
Carl Macali of Niles spoke to a reporter after the meeting. The retiree, his two sons and a daughter have been shareholders since Home Federal went public in 1999, he said.
Osborne’s case to be elected and his strategy to make the bank more profitable weren’t sufficiently persuasive, Macali said. The dissident shareholder’s “problems [with the board and senior management] could’ve been solved internally,” Macali said, instead of being taken to the shareholders.
Safarek’s position that Home Federal Saving’s market hasn’t recovered from the Great Recession and thus remains reluctant to lend were more persuasive, the shareholder said, although he found “merit” in Osborne’s case.
Because he found merit in Osborne’s arguments, Macali did not submit his proxy until last week, he said, and he and his children voted their shares for Kramer and Shaker.
Kramer, chairman of First Niles, owns Wm. Kramer & Sons, a heating and air conditioning company in Niles. He has sat on the board since Home Federal went public in 1998. Shaker is a partner in Shaker & Shaker LLP here. He has been on the board since 2006.
Despite First Niles’ declining profits and a cut in the quarterly dividend in February to three cents a share from a nickel, Macali opined, “The bank is undervalued,” and “It has a lot of promise.”
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