SCOTTSDALE Ariz.
After months of shareholder unrest, Kona Grill Inc. said Friday that Marcus Jundt had resigned as chairman, president and chief executive of the casual-dining chain.
Shareholders in late April approved a “withhold authority” vote on Jundt’s leadership during the company’s annual meeting. Kona Grill owns and operates 20 American grill-sushi bars.
The company said Mark Bartholomay, Kona’s chief operating officer, would serve as interim president and chief executive until a permanent successor to Jundt was named.
In a statement issued Friday, Jundt said: “It is in the company's best interest for me to step aside at this time. I’ve been involved with the company since its inception, and I always will believe strongly in the Kona Grill concept and brand. … If our stockholders believe it is time for a new steward of the company, then I must respect their views and decision.”
Mark Zesbaugh, chairman of Kona Grill’s audit committee, said the board respected Jundt’s decision. “His energy and his enthusiasm for the Kona concept were significant factors in the development of the company,” Zesbaugh said.
Separately, reports from Minnesota indicated a new Kona Grill in Eden Prairie had been put on hold. A “For Lease” sign recently was put on the property.
Shareholder discontent had been brewing at Kona since late last year. In late December, the company announced it would be selling discounted shares to Marcus Jundt’s father, James Jundt, who already owned 4.9 percent of the company’s stock. The $1 million deal was at $1.19 a share at a time when shares were trading at more than $2. Mill Road Capital LLC of Greenwich, Conn., which had offered to take Kona Grill private earlier in 2008, on Jan. 1 tendered an alternative $1 million deal to Kona’s board.
At that point, Kona had about 6.5 million shares outstanding, and over the past 52 weeks the stock had traded as high as $14.77 per share and as low as $1.10 per share. On Jan. 2, shares closed at $2.46.
On Jan. 2, Justin Bennitt, managing member of Clarke Bennitt LLC, an investment management firm in Chadds Ford, Pa., wrote to the Kona CEO to express his shock at the sale agreement.
“Offering shares to James Jundt [your father] at a ridiculously low price of $1.19 for nearly 5 percent of the company is completely unacceptable,” Bennitt wrote. “To further compound the liquidity problem by offering stock to your father at an all-time-low price crosses the boundaries of good taste and in my humble opinion is not operating as a shareholder-friendly CEO.”
Such grumblings led to the vote on April 30 at the company’s annual meeting, when about 53 percent of Kona's voting shares withheld their support for Marcus Jundt.
Marcus Jundt was named CEO on Feb. 1, 2006. Share prices have dropped 78 percent since then.
Contact Ron Ruggless at [email protected].