Concerned Shareholders of Rocky Mountain Comment on the Board’s Last-Minute Attempt to Circumvent the Shareholder Franchise
21 September 2021 - 7:53AM
Business Wire
Believes Announced Board Contraction
Raises Substantial Questions About Mismanagement, Entrenchment and
Fiduciary Duties
Vote the BLUE
Card to Elect the Concerned Shareholders of Rocky Mountain’s
Director Candidates
AB Value Management LLC, collectively with its affiliates (“AB
Value”), and the other participants in this solicitation
(collectively, the “Concerned Shareholders of Rocky Mountain”)
representing approximately 14.59% of the outstanding shares of
Rocky Mountain Chocolate Factory, Inc. (NASDAQ: RMCF) (the
“Company”), today remarked on the Company’s latest entrenchment
maneuver—a reduction to the size of its Board of Directors (the
“Board”) approximately two weeks before the Company’s 2021 Annual
Meeting of Shareholders (the “2021 Annual Meeting”).
The Concerned Shareholders of Rocky Mountain were startled to
learn that the Board decided to shrink the number of Board seats up
for election from seven to six in reaction to the recent vacancy
created by Mary Kennedy Thompson’s resignation from the Board. The
group strenuously objects to the Board’s unilateral decision
approximately two weeks before the annual shareholder vote. The
Concerned Shareholders of Rocky Mountain believe that, facing a
potential loss of an incumbent majority of director seats, the
Board chose desperation over proper governance. The Board should
have waited for the shareholders, the true owners of the Company,
to vote at the 2021 Annual Meeting and decide what should happen
with the vacant seat.
“We cannot comprehend how a self-described ‘best-in-class’ Board
can justify cutting the number of director seats up for contested
election, particularly just about two weeks away from the 2021
Annual Meeting,” commented Andrew T. Berger, Managing Member of AB
Value. “We believe that despite the Board’s excuse for its
decision, shareholders know the likely real reason and motivation—
preventing the Concerned Shareholders of Rocky Mountain from
winning Board seats.”
This latest decision seems to continue the Company’s long
history of poor corporate governance practices, which include: a)
willingness to deploy extreme measures such as delaying the annual
meeting date and requiring a court order to restrict further
postponement, b) maintaining a ten-year poison pill without
shareholder approval, and then failing to include its removal on
the most recent proxy, c) administering questionable compensation
governance and oversight as evidenced by consistent low vote
support, and d) adopting a reluctant and reactionary approach to
board refreshment which has been sparingly achieved through
shareholder settlements and strategic partnership agreements. Given
this history, we believe that the incumbent Board hopes to find a
director supportive of its side and likely avoid the accountability
associated with having highly-qualified independent directors that
prioritize shareholders’ interests and resist the status quo.
Inconsistent with the Company’s claims of “good faith engagement
with AB Value,” the Company never reached out to the Concerned
Shareholders of Rocky Mountain to see if one of their nominees
would agree to serve on both slates when a vacancy was created. The
Concerned Shareholders of Rocky Mountain are perplexed as to why
the Board did not ask to include one of the group’s four
highly-qualified nominees, particularly after acknowledging that at
least one of the group’s nominees, Mark Riegel, was among the
finalists previously and “seriously considered” by the Special
Committee of the Board. The Concerned Shareholders of Rocky
Mountain believe that the only thing shareholders can know for sure
from the Company’s recent calls for “refreshment” and newfound
commitment to governance is that the Company wants the Board, and
not shareholders, to decide who leaves and who joins the Board.
Ultimately, this Board contraction tactic disenfranchises
shareholders and is a poor substitute compared to the option of
genuine, immediate change. We strongly encourage shareholders to
act now and vote FOR the Concerned Shareholders of Rocky
Mountain’s four candidates—Andrew T. Berger, Mark Riegel, Sandra
Elizabeth Taylor and Rhonda J. Parish—on the BLUE proxy card
and discard any white proxy card received from the Company.
Important Additional Information
AB Value Partners, LP and AB Value Management LLC, Andrew T.
Berger, Bradley Radoff, Rhonda J. Parish, Mark Riegel, and Sandra
Elizabeth Taylor (collectively, the “Participants”) have filed a
definitive proxy statement and an accompanying BLUE proxy
card with the SEC to solicit proxies from shareholders of the
Company for use at the 2021 Annual Meeting. THE PARTICIPANTS
STRONGLY ADVISE ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY
STATEMENT AND OTHER PROXY MATERIALS BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Such proxy materials are available at no charge on the
SEC’s website at http://www.sec.gov. In addition, the Participants
in this proxy solicitation will provide copies of the proxy
statement without charge, upon request. Requests for copies should
be directed to the Participants’ proxy solicitor.
Certain Information Regarding the Participants
The Participants in the proxy solicitation are: AB Value
Partners, LP, AB Value Management LLC, Andrew T. Berger, Bradley
Radoff, Rhonda J. Parish, Mark Riegel, and Sandra Elizabeth Taylor.
As of the date hereof, AB Value Partners, LP directly owns 224,855
shares of common stock, $0.001 par value per share of the Company
(“Common Stock”). As of the date hereof, AB Value Management LLC
directly owns 235,334 shares of Common Stock. As of the date
hereof, Mr. Radoff directly owns 433,624 shares of Common Stock. As
of the date hereof, none of Mr. Berger, Ms. Parish, Mr. Riegel, or
Ms. Taylor directly own any shares of Common Stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210920005945/en/
John Glenn Grau InvestorCom LLC (203) 295-7841
Rocky Mountain Chocolate... (NASDAQ:RMCF)
Historical Stock Chart
From Apr 2024 to May 2024
Rocky Mountain Chocolate... (NASDAQ:RMCF)
Historical Stock Chart
From May 2023 to May 2024