Proxy Fight at Oak Ends With McNeely’s Loss

Oak Industries director Roderick M. Hills on Wednesday wrested control of San Diego-based Oak from Chairman E. L. McNeely, after an official tally showed that Hills’ slate won an overwhelming victory at the company’s June 6 annual meeting.

Hills’ five-member slate won 77% of the 53.5 million votes cast during the emotionally charged annual meeting, while McNeely’s slate drew just 23%, according to Oak General Counsel Jim Miller. In addition, three representatives of MIM Ltd., a British firm that owns 25% of Oak’s shares, also were elected to the board by overwhelming margins.

No Lingering Effects

During the hotly contested proxy fight leading to the June 6 vote, Hills credited McNeely with helping to turn around Oak, which had generated $300 million in losses before McNeely’s arrival. But Hills argued that Oak could not end a long string of quarterly operating losses until McNeely stepped aside and appointed a chief operating officer with industrial experience. Oak owns several operating companies that make electronic components.

Hills said Wednesday that he anticipates no lingering effects of the bitter proxy fight, during which McNeely and Hills attacked each other’s business experience. “Ed McNeely graciously accepted a position on the board and everything is peaceful,” according to Hills, who has described McNeely as a “longtime friend.”

McNeely’s defeated board slate earlier this week decided not to contest the election results in court, Miller said. Former board members “considered their options and concluded that in the best interest of stockholders . . . it was time to get Oak moving forward again,” he said.

Telephonic Board Meeting

Lord David Stevens of Ludgate, chairman of MIM, which holds nearly 25% of Oak’s stock, was elected Oak’s new chairman during a telephonic board meeting held Wednesday. Hills, a Washington investment banker and lawyer who first joined Oak board’s in 1985, was elected vice chairman. Stevens was in Japan on Wednesday and unavailable for comment, according to a Boston-based spokesman.

The new board elected McNeely to serve as Oak’s ninth board member. McNeely, who joined Oak’s board in 1983 and became chairman in 1984, was also unavailable for comment Wednesday.

In addition to Hills, Stevens and McNeely, Oak’s new board includes former U.S. Atty. Gen. Elliot L. Richardson, San Diego businessman Daniel W. Derbes, San Diego Economic Development Corp. Chairman George Leisz and Gilbert Mathews, a senior managing partner of Bear, Stearns & Co., a New York-based investment banking firm. Also elected were MIM Managing Director Christopher H. B. Mills and William D. Eberle, a Boston businessman who was nominated by MIM.

Oak was unchanged in over-the-counter trading on Wednesday at $1.375. The stock has traded at about $1 for the past two years.