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UPDATE 2-Buffalo Wild Wings CEO to retire as activist Marcato wins board seats

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NEW YORK, June 2 (Reuters) - Buffalo Wild Wings Inc said on Friday that Chief Executive Officer Sally Smith would retire before the end of the year, a move that came as shareholders voted three activist hedge fund nominees onto the company's board.

Smith's move to stand down from the leadership helm and the wing and beer chain's board showed that despite the nearly year-long effort by the company to fend off activist Marcato Capital Management, shareholders wanted a change.

The San Francisco-based hedge fund publicly launched its Buffalo Wild Wings campaign last July, pressuring Smith and the board to pursue strategies that the activist believed would boost the company's stock price, which had lagged in the last year compared with peers.

Marcato owns more than 9 percent of the company's shares.

Among the demands voiced by Marcato, founded by ex-Pershing Square partner Mick McGuire, was for the company to franchise 90 percent of its 1,235 restaurants and speed up its international and tech expansion.

Marcato's board nominees elected at Friday's shareholder meeting were McGuire, former Pizza Hut CEO Scott Bergren and restaurant industry veteran Sam Rovit, Buffalo Wild Wings said in a statement, shortly after its announcement that Smith was stepping down.

A fourth Marcato nominee, restaurant industry veteran Lee Sanders, was not elected to the board.

Buffalo Wild Wings had nine directors up for election at the meeting, three of whom Marcato targeted to replace: Cynthia Davis, Oliver Maggard and Jerry Rose.

The other company nominees were Rovit, Andre Fernandez, Janice Fields, Harry Lawton and Harmit Singh, who all ran uncontested.

According to a person familiar with the matter, Rose and Davis will remain on the board, with one of them filling Smith's empty seat until next year's election, while Maggard will step down.

(Reporting by Michael Flaherty; Editing by Andrew Hay and Lisa Shumaker)