Dissident shareholders of Computer Network Corp. are continuing their battle to unseat current management at the company's upcoming annual meeting.
Led by New York stockbroker John Spohler, the dissidents notified the Securities and Exchange Commission last week that they intend to ask shareholders to vote on a proposal that would remove all of the company's directors who are not standing for reelection, replacing all of the directors with their own slate.
Their slate consists of the four major dissidents--who together control about a quarter of the company's stock--and three businessmen who up to now have not played a major role in the stockholder's battle with Comnet management.
The three are: Robert S. Bowen, an executive vice president of Firestone Tire & Rubber Co., John Rhodes, a retired executive vice president of Schlumberger Ltd., and Leonard J. Smith, president of his own company, Training Services Inc. Both Bowen and Smith own Comnet stock.
If successful, Spohler said the new board would immediately move to correct what the dissidents consider to be serious errors in current management. First, he said, the new management will evaluate the current team to see if the company can produce operating profits, which Spohler said have not been achieved in several years.
Spohler said the dissidents will also terminate two compensation schemes current management has granted the top four officers. One plan automatically grants these officers five years of salary and benefits if there is change in management--a plan Spohler charges amounts to giving away 30 to 50 percent of the company's assets. The other compensation plan speeds up the vesting of stock options granted earlier to the four officers. The vesting begins at first notice of a proxy fight.
Even though these two schemes may be implemented before and if Spohler succeeds in taking over, Spohler said he plans to challenge them in court on the grounds that the stockholders never had a chance to vote on them.
Spohler added that even though he is on the slate for his choice of directors, he has no intention of personally running the company. Nor, he said, does he intend to merge the company or strip it of its assets.
Comnet Chairman Lee Johnson, in fighting Spohler for nearly two years, has accused him of trying to take over the company at a low price and stripping it of its assets to other stockholders' detriment. Johnson was unavailable for comment on Spohler's latest move.