Solera, Ex-Executive De-Escalate Tension in Proxy Battle

Solera National Bancorp (SLRK) in Lakewood, Colo., has one less activist investor to worry about.

The $168 million-asset company disclosed late Friday that Kathleen Stout, a former company executive, has withdrawn her nomination of eight director candidates. Solera did not say why Stout, who had been fired last year as part of a cost-cutting effort, backed down.

Solera said in the same press release that four of its 11 nominees were no longer running in its upcoming elections. Norma Akers and Basil Sabbah will not stand for re-election, while Ron Montoya and Stanley Sena resigned. As a result, Solera said it will shrink the size of its board to seven directors, including Chief Executive John Carmichael.

"In the course of our conversations with shareholders, some have expressed concerns about the size of the board," Solera said in its release. "These directors have responded to this concern by leaving the board. We sincerely thank them for their service over the years."

Solera still faces a challenge from Michael Quagliano, who owns about 23% of the company's stock. Quagliano is looking to add six people, including himself, to Solera's board. He also has a proposal to shrink the size of the board to five directors.

Quagliano responded to Solera's actions in a Monday regulatory filing, accusing the company of backtracking on an earlier statement that a smaller board "would be harmful to shareholder interests," and claiming that the move shows that his efforts are paying off. Quagliano has been pushing a resolution to shrink the board to five directors. "Regardless of the number of Solera nominees or Solera's spin on the resignations, fundamental change is needed," Quagliano said in his filing.