By Michael Flaherty
(Reuters) - Buffalo Wild Wings Inc (O:BWLD), battling activist hedge fund Marcato Capital Management LP in a proxy fight, escalated tension between the two sides on Monday by tapped one of Marcato's own nominees for its director slate.
The restaurant chain nominated Janice Fields, a veteran executive at McDonald's Corp (N:MCD), and Sam Rovit, the CEO of CTI Foods and a former executive at Kraft Foods (NASDAQ:KHC).
In an unusual move, Rovit is also one of Marcato's four nominees it is seeking for election to the board. Proxy voting rules allow one nominee to serve on two director slates as long as the person consents.
Rovit's dual-role provides added drama to one of this year's most high-profile proxy fights, pitting Marcato founder Mick McGuire against Sally Smith, CEO of the $2.5-billion Minneapolis-based wings and beer chain.
McGuire, a former Pershing Square (NYSE:SQ) partner, officially launched the proxy fight in February, though Marcato began to agitate for changes at the company last July. The San Francisco-based fund is Buffalo Wild Wings' fourth largest shareholder with a 5.6 percent stake.
Buffalo Wild Wings said on Monday that James Damian, who had previously served as board chairman, and Michael Johnson will retire from the board at the annual meeting.
The company's other nominees are Smith and six sitting directors.
"It is deeply troubling that the Company would take these steps without consulting us or other major shareholders, as we have continuously endeavored to engage in constructive dialogue," Marcato said in a statement on Monday.
Marcato added that the company should address its suggested operational improvements.
Buffalo Wild Wings' annual meeting is expected in May.
(This story was refiled to remove extraneous language from final paragraph)