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Dissident Shareholder Joins Blockbuster Board

24 Jun, 2010 By: Erik Gruenwedel

Blockbuster June 24 said it added dissident shareholder Gregory Meyer to its board.

CEO Jim Keyes said Meyer was added to the seven-member board after reaching an agreement with the shareholder. Keyes credited Meyer’s enthusiasm and industry experience, in addition to a “colorful” proxy process, as reasons for adding an eighth seat to the board.

Meyer, who owns more than 620,000 shares of Blockbuster, had run an unsolicited, and at times acrimonious, campaign to gain a seat on the board, citing his experience with kiosk vending. The investor once owned DVDXpress rental kiosks, which he later sold to Coinstar, parent of Redbox.

"It was clear in the proxy voting that Greg had strong support among several of our shareholders and the interests of Blockbuster are best served by bringing him aboard while retaining Gary Fernandes," Keyes said.

Meyer said he was pleased with the settlement looked forward to working with Keyes and the other directors.

Separately, shareholders reaffirmed or voted on nominees Edward Bleier, Kathleen Dore, Fernandes, Joseph Fitzsimmons, Jules Haimovitz, James Keyes and Strauss Zelnick.

Shareholders also approved amendments regarding executive compensation; ratification of public accountant; conversion of 72 million shares of Class B common stock into equivalent shares of Class A common stock; and the approval to effect a reverse-stock split of more than 145 million shares of outstanding common stock.

Blockbuster said it would engage in a reverse stock split if the ongoing recapitalization efforts do not result in the price of shares meeting the New York Stock Exchange’s $1-per-share minimum price requirement.

The company’s management remains in discussions with bondholders to significantly shrink $900 million in debt in exchange for a greater share of the company, among other provisions. Blockbuster, which demonstrated to shareholders the expanding potential for Blockbuster On Demand movie downloads across multiple devices, said posible new strategic investors include technology firms and cable, satellite and cable operators.

"We have made progress in our efforts to recapitalize the balance sheet and continue to explore all options," Blockbuster said in a statement.

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