Shareholders

Chicago real estate mogul Sam Zell has become the favored suitor for Tribune Co. - owner of 11 daily newspapers, 23 television stations and the Chicago Cubs - with a $33-a-share bid that offers a clear premium for a company that has been buffeted by new media challengers, according to a person familiar with the negotiations. Investment bankers are working feverishly to try to strike a deal, but so many details remain to be resolved that the company might not be able to meet its self-imposed deadline to conclude deliberations by the end of the month, the person familiar with the negotiations said.

Legg Mason Inc. shareholders approved a proposal yesterday to split the positions of chairman and chief executive officer, both of which are held by longtime chief Raymond A. "Chip" Mason, though the change is not likely to be implemented as Mason and other company officials say it's not necessary. The dual role of chairman and chief executive officer, while common in corporate America, has drawn criticism from shareholders and corporate governance watchdogs who contend that separating the jobs would ensure better oversight and help guard against conflicts of interest.

Nation: Labor AK Steel reaches Ohio agreement AK Steel Holding Corp. said yesterday it has reached a tentative settlement with union workers at its Middletown Works plant in Ohio, ending a year-old lockout fought over the steelmaker's demands for lower labor costs. Leaders of the Machinists union weren't immediately available for comment on the deal, which comes on the lockout's anniversary. The company has continued to operate the mill with replacement workers and salaried employees, and union membership has dwindled from about 2,700 a year ago to just over 1,700 because of retirements and resignations.

Despite shrinking cash and questions from shareholders about whether it can survive, TVI Corp. said yesterday that its turnaround is on track. The Glenn Dale manufacturer of decontamination shelters reported improved sales for the third quarter but still posted a loss. "While we all would like to speed up the process, we believe our management team is setting realistic, tangible, short- and long-term goals for TVI and is working at a steady, substantial pace," interim chief executive Harley A. Hughes told shareholders during a conference call to discuss third-quarter results.

Educate Inc. executives hope the tutoring company's new life as a privately held business will enable it to move beyond its financial struggles after shareholders approved yesterday management-led buyout of the Baltimore-based operation. Company executives announced that 75 percent of Educate shareholders approved the $535 million deal. Shareholders will receive $8 a share from the management-led investment group, including Chief Executive Officer R. Christopher Hoehn-Saric and others.

Chicago real estate magnate Sam Zell is proposing to participate in a buyout of Tribune Co. in a deal structured around an employee stock ownership plan, several sources close to the situation said Friday. The deal is one of several options being considered by the special committee of independent directors charged with overseeing Tribune's months-long effort to sell or restructure the company. It would create a privately held, highly leveraged company that would be able to take advantage of federal tax breaks associated with employee stock ownership plans, or ESOPs, to provide "a bigger payoff" to existing shareholders than the other restructuring options being studied by the Tribune board, one of the sources said.

BERLIN -- DaimlerChrysler AG insists it is keeping all options open for the future of the Chrysler Group. But judging by its tense annual meeting here yesterday, Daimler's marriage to Chrysler is already finished, except for the ink on the divorce papers. Trying to placate restive shareholders, DaimlerChrysler confirmed for the first time that it was in negotiations with a number of bidders about a deal for the troubled American unit, which lost $1.5 billion last year. "We are talking with some of the potential partners who have shown a clear interest," the chief executive, Dieter Zetsche, said.

Shareholders of Essex Corp. approved yesterday the sale of the company to Northrop Grumman Corp. for $580 million - an unimaginable event eight years ago when the company verged on bankruptcy and the share price was quoted in cents rather than dollars. Wearing a blue dress shirt and a parrot dangling from a green Mardi Gras-style beaded necklace, Leonard E. Moodispaw, the company's unconventional chairman, chief executive officer and president, read aloud the formalities of the proxy vote to the 30 shareholders who attended the special meeting at the company's headquarters in Columbia.

NEW YORK -- USA Networks Inc., the media company run by Barry Diller, dropped its plan to buy No. 3 Internet search service Lycos Inc. yesterday because of opposition from Lycos shareholders.Lycos' shares had declined by more than one-third after Diller proposed combining the companies in February. The Waltham, Mass., company's shares recouped about 35 percent of that loss as opposition to the plan increased, and rose $8.75 yesterday to $107.Shareholders led by David Wetherell, head of CMGI Inc., the Internet venture company that is Lycos' biggest shareholder, opposed the combination because it did not offer any premium.

Manugistics Group Inc. of Rockville announced yesterday that a class action shareholders suit filed against the company and two top officers last year has been dismissed.Shareholders filed three lawsuits against the company, which provides inventory management software, in June 1998 after its stock fell 66 percent, from $47.875 to $29.25, in one day. The plunge followed the company's warning that first-quarter earnings would fall short of analysts' projections.The suits, later consolidated in U.S. District Court in Baltimore, claimed that the company had made falsely optimistic statements about its finances that boosted its stock price.

Corporate America is shocked at pay czar Kenneth Feinberg. That Washington appointed him to oversee compensation at companies getting bailouts? Nah. That he thinks people who abused shareholders and crippled the economy don't deserve pay of tens of millions in some cases? Not really. People are flabbergasted he has the stomach to do anything about it. CEOs figured that Feinberg would be like every other paymaster they ever had. That he would rub his chin, act concerned about doing the right thing and then wire the gross domestic product of Nicaragua into their bank accounts.

The wise Adam Smith figured out two centuries ago why boards of public companies would let CEOs haul away truckloads of money that ought to belong to the shareholders. "The directors of such companies, being the managers of other people's money than their own," the Scottish philosopher said, do not "watch over it with the same anxious vigilance" that a direct owner would bring to bear. The "say on pay" legislation in Congress would give the owners of corporate America a little more power and a little more vigilance over what are, after all, their companies.

Under Armour CEO Kevin Plank told shareholders Tuesday morning that he wasn't going to give them a lecture about how bad the economy is for business. Instead, he chose to focus on the future of the company and how it could succeed despite the financial situation. He said the 13-year-old company will focus on launching new products, such as a bodysuit that helps athletes recover from injuries quicker, and controlling costs with measures such as slowing down its international expansion and implementing a global tax restructure.

If all First Mariner Bancorp's shareholders were as loyal as Frank Wesolowski, the company's stock would still be at $10 or $15. Wesolowski is a retired pharmacist from Edgemere, where First Mariner honcho Edwin Hale Sr. grew up and launched a real estate and shipping kingdom. He watched Hale win a proxy war for control of the Bank of Baltimore in the early 1990s. He figured Hale's new bank, founded in 1995, could fill vacancies left by Bank of Baltimore and other lenders that got sold to out-of-towners.

Robert J. Lawless gave up his final duties at McCormick & Co. spice company Wednesday but said he'll be doing something just as strenuous as running a major corporation - playing on an amateur hockey team in Canada. The 62-year-old is playing in a league made up of players his age. He also plans to play golf and serve on three corporate boards. Lawless technically retired last year, passing on the job of leading the day-to-day operations of the Sparks company to his hand-picked successor, Alan D. Wilson, the company's president and chief executive officer.

A proxy advisory firm recommended yesterday that Baltimore's Constellation Energy Group shareholders reject the company's $4.7 billion pending sale to Warren Buffett, raising another doubt about the takeover amid reports that Constellation favors an offer from a French utility. Constellation is nearing an agreement to sell half of its nuclear power business to Electricite de France for nearly the same price as Buffett's MidAmerican Energy Holdings Co. offered for the entire company, according to several published reports yesterday.

Columbia Bank's parent to get federal loan funds Fulton Financial Corp., the parent of Columbia Bank, announced yesterday that it will receive $375 million from a federal program designed to spur lending. Fulton, of Lancaster, Pa., said it received preliminary approval from the U.S. Treasury under the government's $700 billion Troubled Assets Relief Program, which sets aside $250 billion to inject cash into banks in exchange for shares. Fulton will sell senior preferred stock and warrants to purchase common stock to the Treasury in exchange for the cash.

Like the Wizard of Oz, Electricite de France looked into the souls of everybody connected with Constellation Energy Group and offered to grant their greatest desires. To shareholders, it promised a higher stock price. To Constellation boss Mayo Shattuck, it held out the prospect of continued employment and undoing a great failure. For Maryland politicians, it would keep Constellation headquarters in Baltimore. For creditors and rating agencies, it promised cash to prevent a Constellation bankruptcy even if shareholders reject Warren Buffett's buyout.

Constellation Energy Group, which is selling itself to Warren Buffett, will seek shareholder approval late next month for its pending $4.7 billion deal. The company, which owns Baltimore Gas & Electric Co., announced yesterday that a special shareholder meeting would take place in Baltimore on Dec. 23. Constellation agreed to sell itself in mid-September to Buffett's MidAmerican Energy Holdings Co. as it faced a liquidity crisis amid a financial sector meltdown. The Des Moines, Iowa-based MidAmerican agreed to pay $26.50 a share, about one-fourth of Constellation's market value at the beginning of the year.

It's a beautiful idea: Constellation Energy shareholders reject the emergency merger with Warren Buffett's MidAmerican Energy Holdings, retake control of their company and watch the stock head back upward. Baltimore gets to keep a Fortune 500 corporate headquarters. And Constellation shareholders beat the planet's greatest investor at his own game. It's not anything that big shareholders are counting on. For now, Buffett's deal is the only thing keeping Constellation stock from plunging even further than it has. But it's not impossible.