Sport Chalet was able to reach agreement last week in a class action suit that challenged the structure of the recapitalization efforts by the SPCH board that created Class A and Class B shares, increased the number of outstanding shares, distributed Class A shares through a dividend, and transferred Class B shares from The Olberz Family Trust to company Chairman & CEO Craig Levra and CFO/EVP Howard Kaminsky, giving them at least 45% of the combined voting power of the two classes of stock.
The deal announced last week sees the annual compensation paid to Mr. Olberz cut in half to $150,000, while Messrs. Levra and Kaminsky have agreed not to accept further gifts or transfers of Class B shares for less than market price from Olberz or The Olberz Family Trust and Sport Chalet will not issue or sell or option to Levra or Kaminsky any additional Class B Common Stock, except for the conversion of existing options. Further, the two execs have agreed to not sell SPCH stock at a “Premium to Market Price” if the transaction would result in the transfer of 35% or more of the voting power unless all SPCH stockholders are offered the same per share consideration.
In approving the deal, the Court dismissed the case with prejudice and “discharged, settled, released, and dismissed with prejudice any and all claims, liabilities, damages, losses, and issues of any kind or nature whatsoever, whether known or unknown, related, directly or indirectly, to the Action or the Recapitalization.” The plaintiff was awarded $480,000 in attorneys fees and expenses.
