Irvine-based Banc of California Inc. said it has reached an agreement with Legion Partners Asset Management LLC to avoid a proxy battle.
The bank agreed to add two independent directors to its current seven-member board. Legion Partners, which owns 6.6% of the bank’s shares, had threatened a proxy battle unless its two proposed candidates were nominated.
The board will consist of nine independent directors after the election of the two additional members, with no representatives employed by the bank.
Legion’s proposed candidates, Marjorie Bowen and Roger H. Ballou, will be considered along with other candidates, the bank said. A date hasn’t yet been set for the new seats to be filed or the bank to hold its annual meeting.
The two new independent directors will be in addition to the appointments in February of Richard Lashley and W. Kirk Wycoff, both of whom represent large shareholders in the bank.
The announcement follows a tumultuous period for the bank. In October, an anonymous blogger alleged the bank had improper connections to an organized crime member. An investigation commissioned by the board refuted those claims in February. Chief Executive Steven Sugarman resigned in January, at the same time the bank revealed the Securities and Exchange Commission is investigating whether the bank handled the allegations and investigation properly.
Shares of Banc of California shares were unchanged at $20.65. The shares have climbed 28% since Feb. 9 when the board of directors released its investigation.