LAPORTE, Ind., May 10, 2011 (GLOBE NEWSWIRE) -- Timothy Stabosz, a 5% holder, and the largest unaffiliated individual stockholder of Scott's Liquid Gold, Inc. (OTCBB:SLGD), today announces his filing of a Form 13D Amendment with the Securities and Exchange Commission. In the filing, Stabosz indicates his intention to withhold his vote for the election of 5 out of 6 of the company's incumbent director nominees, at the annual meeting to be held on May 18, 2011. SPECIFICALLY, STABOSZ INTENDS TO WITHHOLD: MARK E. GOLDSTEIN, JEFFREY R. HINKLE, CARL A. BELLINI, DENNIS H. FIELD, AND JEFFRY B. JOHNSON.
The filing also provides, in a letter addressed to the Board of Directors, the reasons for Stabosz's voting intentions, and further indicates Stabosz's intention to vote AGAINST Proposal #2, to increase the number of shares available under the company's 2005 option plan.
The entirety of Stabosz's filing can be accessed on the SEC's EDGAR website at the following two links:
http://www.sec.gov/Archives/edgar/data/88000/000116289311000004/slgd13d1.txt
http://www.sec.gov/Archives/edgar/data/88000/000116289311000004/slgdltr.txt
Stabosz began, "the filing speaks for itself, and gives the proper context for my intended vote. No press release could adequately summarize my comprehensive take on the dysfunctionality of corporate governance at Scott's Liquid Gold, and the 'free reign' that a poorly performing CEO has been given. I have provided the two links above, because I believe they are most informative, and I hope anyone interested will take the time to read my entire SEC filing."
In his extensive due diligence, Stabosz arrived at the following conclusions:
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Mr. Goldstein's record as CEO is a record of rank failure.
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Mr. Goldstein lives in a bubble, thriving on the high regard in which he is held by his employees and the community-at-large, and is operating the company primarily for the sake of "image" and "pride," as a de facto not-for-profit institution, for which he is awarded a generous "sinecure."
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Despite fiduciary obligations, a majority of the board has their first loyalty to the Goldstein family, as a result of longstanding social and/or employment relations with the family and/or Company, and therefore, refuses to hold Mr. Goldstein accountable.
- There is no interest in entertaining reasonable and bonafide offers for the company, because Mr. Goldstein can't bear the notion of losing it, or the pay he receives in running it. (Not only is Goldstein overpaid for his performance, but he has ignored legitimate indications of interest to purchase the company in the past.)
Stabosz continued, "It is worth noting that the highly respected proxy advisory firm, Institutional Shareholder Services (ISS), has recommended that Directors Goldstein, Hinkle, and Johnson be withheld...and that ISS likewise recommends a vote AGAINST Proposal #2. With regard to Proposal #2, in my view, serious red flags are raised when the board sees fit to issue a total of 744,000 in options, over a mere 6 month period in 2010 (equal to roughly 7% of the outstanding shares), at depressed prices for the common stock. This serves to effectively reward officers and directors for driving the price of the stock down, and facilitates a further potential entrenchment of the CEO, should such options be exercised.
"This is just one more reason why," Stabosz concluded, "I intend to WITHHOLD MY VOTE FROM DIRECTORS GOLDSTEIN, HINKLE, BELLINI, FIELD, AND JOHNSON, and why I, as a 5% shareholder, will continue to draw attention to the failure of the board to stand separate from the CEO...and the willingness of a CEO, to 'stack' the board of a public company, to keep it under his yoke."