Millennium Bankshares Corp. has reached an apparent cease-fire with a shareholder group that had been agitating for the Reston, Va., company's sale.
The $411 million-asset Millennium said late Monday that Hot Creek Capital LLC of Reno has agreed to withdraw its nominations for directors at next month's shareholder meeting. Hot Creek will not acquire additional Millennium shares or assist in the solicitation of proxies until next year's shareholder meeting has concluded.
Hot Creek, which owns 6.1% of Millennium, also agreed not to attempt to influence or gain control of the company, except in a board member capacity, through the end of next year's meeting, Millennium said.
In exchange, Millennium will nominate Hot Creek's managing director David M. Harvey and Joseph Paulini, a Hot Creek investor, at next month's meeting to succeed two directors who will not seek reelection. Mr. Harvey would join the board's executive committee, and either he or Mr. Paulini would join the nominating and governance committees.
Hot Creek has been granted the right to nominate two additional directors at next year's meeting.
The agreement was announced just days after Millennium said its chairman and chief executive, Carroll C. Markley, would retire in March, though it is unclear if the two announcements are related. Neither Mr. Markley nor Mr. Harvey returned phone calls requesting comment.
Still, the agreement appears to be a truce, at least for the time being, in the contentious relationship between Millennium's management and Hot Creek.
In June of last year Millennium agreed to acquire the $120 million-asset Albemarle First Bank of Charlottesville, Va., for $29 million, but five months later, Millennium's shareholders rejected the deal.
(Albemarle First, which has struggled with asset quality issues, was later sold to Premier Community Bankshares Inc. in Winchester for $29 million.)
Shortly thereafter, Hot Creek began pressing for a sale. In a December filing with the Securities and Exchange Commission, it said that Millennium "could garner a takeover premium that would be attractive to shareholders and … exceeds any value the company might realistically produce by remaining independent."
Mr. Markley, who founded Millennium in 1998, disagreed. In an SEC filing Dec. 7, he said his company had the "capital, senior management, personnel, and corporate overhead in place to support continued future growth."
