Shareholder activist to join Gateway board

To avoid a proxy battle with one of its largest investors, Gateway plans to add a shareholder activist to its board of directors, the PC maker announced Thursday.

Under the agreement, Scott Galloway, founder of Firebrand Partners, will join the PC maker's board. Galloway will be accompanied by a second mutually accepted independent director, not yet named.

Scott Galloway

The agreement also calls for Gateway to seek approval from its investors to change the timing of its board elections from being staggered to being held on an annual basis. Such a move would make it easier for investors to demonstrate any displeasure with board members, as it would set the stage to let an opposing slate of directors be elected in a proxy fight and gain control of the company's governance.

Gateway is making the changes to avoid a potential proxy fight with Firebrand and Harbinger Capital Partners, which holds a 10.7 percent stake in the company, according to a Gateway statement. In October, the investor group called on Gateway to add three board members and remove several obstacles that could deter unsolicited buyout offers; otherwise, it would reach out to other Gateway investors.

Galloway, a clinical associate professor at New York University's Stern School of Business, is also familiar with brand strategies. Galloway is a co-founder and director of multichannel retailer Red Envelope, as well as founder of brand strategy consulting firm Prophet.

"We believe Scott's brand experience will be particularly helpful toward the development of Gateway's brand," Rick Snyder, Gateway's chairman, said in a statement. "We plan to continue our ongoing dialogue with Gateway's stockholders, as our board works to identify an additional independent director and consider governance matters over the next several months."

Other requested changes the investor group outlined in its October letter included eliminating Gateway's shareholder rights plan, or "poison pill." Such plans are designed to flood the market with additional shares of a company's stock should a hostile takeover arise, making it prohibitively expensive for the suitor to buy the company.

Gateway said it will review its shareholder rights plan and make "associated recommendations" prior to its annual shareholder meeting next year.

Firebrand and Harbinger, in return, agreed to abide by certain standstill provisions that would run through the end of next year. Such a provision would aid in keeping a proxy fight at bay.

"There is nothing wrong with Gateway that can't be fixed with what's right with Gateway," Galloway said in a statement.

The investor group, which notified Gateway last August that it wanted to hold discussions with the company on ways to increase its financial performance, had become disenchanted with the pace of change over the subsequent months.

Gateway's financial performance and market share have been under pressure for several years. The company, which is known for its quirky cowhide brand, has been outpaced by PC giants Dell and Hewlett-Packard, and by others, including Taiwan's Acer.

Last September, the company hired a new chief executive, J. Edward Coleman--its fourth CEO in six years.

The company noted in its statement that the agreement will enable Gateway's management to focus its efforts on returning Gateway to profitability, without the distraction of a looming proxy fight.

[JBOKELL]

why does the lead attorney making over $500k on money from stock holders work at home for 5 hours a week while we pay for his vacation life. Greg Call works from home and absolutely does nothing but collect while the stock holders pay. Is that sane practice. Not to mention his life of abuse of his children

[JBOKELL]

Here is an excerpt from a letter about the lead attorney of Gateway. The stock holders should know what they are supporting when they support a person that is so abusive to children and also works from home for 500k a years. It is sick that owners of the company put up with this. This from one of the lead attorney's own child. Read it and tell me we should support GATEWAY!!!. "We haven?t seen any change in him in the past 1 1/2 year. He has hit me and my brother?s and sister. He has a bad temper and needs help to get help to get his anger under control, but he never admits that he is out of control and has a problem. When he doesn?t get his way, or he gets angry he screams and becomes abusive. At 6?4 inches, 220 lbs, he is very intimidating when he is inches away from your face screaming at the top of his lungs at you. During this therapy visit, I wanted to go home to my mother?s house because my sister and I were both very scared and worried about his behavior. The therapist said that we should take baby steps and not jump into overnight visits after such a long separation. Greg did not agree and insisted that we go with him, because that is what the court order said. We spoke up and told him we didn?t want to go because we were so scared of him. I wanted to call 911 because I was so scared and I thought that they wouldn?t put me into a situation with Greg. Kelly Riley told me not to call the police, she said that it wasn?t a guarantee that the police would get me out of the situation and that it might upset him more. I listened to her, and we went with Greg to his house. He sent us to our room right after we got home for punishment. We couldn?t talk on the phone to our mom, watch tv, listen to music or leave the room for any reason. .....tried to leave the room to go to the bathroom because she got sick from being so upset. He was watching us and screamed at her. She threw up and had to swallow it. I get very bad migraine headaches and I have to take medicine to prevent them from getting worse. Greg refused to give me my medicine. When I asked him for medicine, he started screaming at me inches away from my face and wouldn?t get my any medicine or help. I shut my door and gave up. Greg would not allow us to get any food. I was very hungry and sick and he kept me in my room. I am very scared of my father, he has hit me before and I know he will do it again. I get physically sick every time I have to go to his house, and it takes me days to recover. It is so difficult to do well at school when I am so scared of the whole situation with him. My mom tried to bring me clothes and medicine, but Greg just screamed at me when I got the clothes. He screamed at me to get in the house. The last time we talked to social services they told me to talk to my counselor if something happened again. I am very scared of my father, I don?t want to be hit again, "

[JBOKELL]

More on Greg Call the lead attorney of GATEWAY. This is what us stock holders are supporting while he works from home for $500k he does this to his kids. It is not even something one reads in books or sees in movies but it is true and from a child of his that wrote it. Names were left out so that they would remain annonymous but it is serious enough for us stock holders to demand a change in the situation immediately or we need to stop buying GATEWAY computers. His DAUGHTER wrote this to the court monitor. How can we sit and let this happen. GREG CALL abuses animals, children and women. What else do you need to make a change?

"I don?t want to live in fear of saying the wrong thing and making him angry. He has hit all our family and he should be stopped. He claimed that he has changed, but he is a lawyer and lies for a living. He has not changed. I want someone to help me and my little brothers and sister, please. I am scared because even court ordered therapy hasn?t helped. No one seems to care about what is happening to me and my brothers and sister. Please help us."