Sonus gives Legatum 2 board seats
Monday January 12, 4:49 pm ET
Sonus makes peace with dissident shareholder, gives Legatum 2 board seats
WESTFORD, Mass. (AP) -- Sonus Networks Inc., which makes Internet network hardware and software, said Monday it will add two new directors to its board as part of an agreement to keep its largest shareholder from causing trouble -- again -- at the company's annual shareholder meeting.
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Sonus said it also changed aspects of its corporate governance policies under the agreement with Legatum Capital Ltd., a Dubai-based investment group that owns about a quarter of Sonus' common stock.
Sonus said that under the agreement, it will separate the role of chairman and chief executive so that one person does not hold both titles. The company also agreed to declassify the board, so that directors are up for re-election every year, and formed a new board committee to oversee financial matters, "with the objective of enhancing stockholder value," according to a statement.
Under the agreement, Legatum can pick two additions to Sonus' board. Legatum will also refrain from putting forth proposals or taking other actions around the company's annual shareholder meeting.
At last year's shareholder meeting in June, Legatum withheld votes for three Sonus board nominees up for re-election, saying that the company lacks transparency and is unresponsive to shareholders. The investment group also expressed concern over a decline in Sonus' stock price, shareholder lawsuits and high senior management turnover.
Shares of Sonus slipped 12 cents, or 7.2 percent, to close at $1.54 Monday.
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