Warner’s Biggest Stockholder Threatens to Oppose Reelection of Ross

Disclosing new rancor in a growing feud with its biggest shareholder, Warner Communications said Monday that Chris-Craft Chairman Herbert J. Siegel has threatened to oppose the reelection of Warner Communications Chairman Steven J. Ross and another director, Lawrence D. Buttenwieser.

Five of the 15 directors are up for reelection at Warner’s annual meeting June 24.

Warner’s proxy statement for the meeting also said that unless Siegel “reaffirms his commitment” to management’s slate of directors, the company “intends to reevaluate” its renomination of one of Chris-Craft’s representatives on the board. As Warner’s biggest shareholder with 17.4% of its voting stock, Chris-Craft has four seats on the board, one of which is up for reelection.

A Chris-Craft spokesman declined late Monday to discuss its intentions concerning the Warner election. But he did comment that Warner did not make “material” portions of the proxy available to Chris-Craft prior to mailing it to stockholders Monday.

Warner’s proxy also disclosed that Chris-Craft’s four representatives on the board voted in the minority last January when the board adopted a new stock option plan that is subject to stockholder approval June 24.

The proxy said executives and employees would receive a total of 1.2 million options to buy common stock at an average exercise price of $25.39 per share. The stock closed Monday at $32.625, down 50 cents on the NYSE.

The present situation began heating up after Warner directors designated by Chris-Craft voted against a new employment contract signed with Ross last Feb. 26. On March 30, former U.S. Sen. Abraham Ribicoff, one of the Chris-Craft group on the Warner board, resigned without publicly discussing his reasons.

More fuel was added recently when Siegel brought a lawsuit successfully forcing Warner to turn over to him a sealed, 663-page report on an internal investigation of the company’s dealings in the 1970s with the now-defunct Westchester Theater. U.S. prosecutors convicted several organized crime figures of skimming profits of the live-performance theater in Tarrytown, N.Y. One Warner official was convicted of criminal charges from a bribery-kickback scheme involving the theater.

Warner’s 44-page proxy details the court fight over the internal report at length.

In reference to the directors’ election, the proxy said Warner believes it has an agreement with Siegel and Chris-Craft to support all five directors up for a vote June 24. The agreement, it said, provides that Chris-Craft would have the right to fill the vacancy left by Ribicoff “with a nominee acceptable to the board.”

“Mr. Siegel has since stated that he may seek to oppose the reelection of Messrs. Buttenwieser and Ross at the annual meeting.”

In turn, the company threatened to reevaluate not only its nomination of Chris-Craft nominee Howard Arvey for reelection, but its commitment to fill the Ribicoff vacancy “and to take such steps as the board determines are appropriate under the circumstances.”