Plastics manufacturer Myers Industries Inc. disclosed that a director has resigned from its board of directors following a dispute over the board's management.
The Akron, Ohio, company said in a Securities and Exchange Commission filing that it received a letter on March 13 from Daniel R. Lee tendering his resignation as a member of the board. His resignation was accepted that day, according to the filing. Prior to his resignation, Lee was a member of the Audit Committee and the Capital Allocation Committee.
Lee “states that his resignation is a result of the board determining not to re-nominate (him) as a director,” Myers said in the filing.
Myers added that it “takes exception to the opportunistic and negative comments made by Mr. Lee about the board in his resignation letter.”
Lee joined the board in 2013 as part of an agreement between Myers and GAMCO Asset Management Inc., the private equity group backed by activist investor Mario Gabelli.
Here are some of the highlights of Lee's letter, filed with the SEC:
• “As you know, I joined the board initially as part of an agreement with GAMCO and then was re-nominated by invitation from the existing board members. Having been a Chartered Financial Analyst and a CEO of companies both larger and smaller than Myers, I brought a unique and independent perspective to the board. I looked forward to providing an independent Wall Street perspective and assisting the board in making good decisions and exercising good corporate governance. I'm disappointed that we haven't made more progress in that regard.”
• “Particularly over the past few months, I have been shocked by the board's careless attitude toward important decisions regarding the company, including significant divestitures and executive compensation, as well as its unwillingness to consider in good faith my thoughts regarding the company and its performance. On numerous occasions, in order to fulfill my fiduciary duty to the company and its stockholders, I have attempted to raise specific questions regarding the details of important proposed actions to be decided upon by the board in the hopes of engaging the board members in a thorough deliberation. I've always done so in a polite and collegial manner. However, in many instances, my questions and concerns were either ignored or even met with hostility.”
• “Recently, I was stunned to learn that the Nominating and Governance Committee intended to recommend to the board that I alone not be re-nominated as a director. This is despite the recent annual review by board members wherein I was told that I was rated highly as a contributive member of the board. I was told that this decision by the Nominating and Governance Committee was not the result of any doubt over my qualifications or my performance as a director and Audit Committee member, but merely because GAMCO intended to nominate three new independent directors to the board at the company's 2015 annual meeting. I was informed that the Committee was going to recommend to the full board that it “fight” GAMCO's nominations. The board then followed the recommendation of the Committee without any review of the nominees' qualifications and expertise and what attributes they might contribute to the existing board. I was told that I was an unfortunate ‘victim' of a large stockholder's actions, actions that appear to me to be merely seeking to improve the qualifications, independence and governance of the board.”
Myers said in its filing that, “In particular, the company disagrees with Mr. Lee's assertion that the board exhibited a ‘careless attitude' in any respect. The members of the board take their responsibilities and decision making very seriously, whether related to compensation, acquisitions, divestitures, capital allocation, or otherwise, and have the utmost respect for their fiduciary duties to the company and its shareholders.”
The company is having a rough March.
In a filing on Monday, March 16, Myers disclosed it is unable to file its form 10-K with the Securities and Exchange Commission by the required date “without unreasonable effort or expense,” in part due to the discovery of “possibly fraudulent activities” at its Brazilian operations.
