Rural/Metro reaches settlement with its largest shareholder, agrees to increase board size

By Lisa Kerner

Charlotte, N.C., Jan. 28 - Rural/Metro Corp. and its largest shareholder, Accipiter Capital Management LLC, entered into a settlement agreement, according to a schedule 13D filing with the Securities and Exchange Commission.

Under the agreement, Rural/Metro will increase the size of its board of directors to nine members from seven. Rural/Metro will appoint Eugene I. Davis and another nominee mutually selected by Accipiter Management and the company.

Davis' two-year term will expire at the fiscal 2009 annual meeting.

In addition, Rural/Metro will nominate, recommend and solicit proxies in favor of Earl P. Holland for election to the board at the fiscal 2007 annual meeting for a term of three years expiring at the fiscal 2010 annual meeting.

Davis will be appointed as a member of the audit committee, while Holland will be appointed to the nominating committee.

Accipiter withdrew its letter nominating Davis, Holland and Mohsin Y. Meghji for election and agreed to vote all of its shares in favor of Rural/Metro's nominees and proposals at the annual meeting.

Current board member Mary Anne Carpenter will not stand for re-election, and Cor J. Clement Sr. will retire from the board effective June 30. Louis G. Jekel will not stand for re-election upon the conclusion of his current term, which expires at the fiscal 2008 annual meeting.

The agreement also calls for Rural/Metro to "implement certain corporate governance reforms and certain director and officer compensation changes," the filing stated.

Reforms include prohibiting the board from amending the company's bylaws without stockholder approval, reviewing Rural/Metro's poison pill and evaluating all supermajority stockholder voting provisions.

Under the settlement agreement, the parties agreed not to engage in the solicitation of proxies or consents until the earlier of 30 days after the one-year anniversary date of the annual meeting or March 31, 2009.

In October, Rural/Metro board members met with Accipiter Capital to discuss long-term stockholder value.

It was previously reported that Accipiter, in an Aug. 30 letter to the company's board, expressed displeasure at Rural/Metro's loss in stockholder value, what it called a lack of progress in reforming corporate governance and compensation, failure to provide investors with any significant expectations for financial performance and perceived disregard for its stockholders and their concerns.

Accipiter Capital beneficially owns some 3.7 million shares, or 14.96%, of the Scottsdale, Ariz., medical transportation company's outstanding stock.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.