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Concerned Shareholders of Rocky Mountain Comment on the Board’s Last-Minute Attempt to Circumvent the Shareholder Franchise

Nachrichtenquelle: Business Wire (engl.)
20.09.2021, 23:53  |  104   |   |   

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.

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Concerned Shareholders of Rocky Mountain Comment on the Board’s Last-Minute Attempt to Circumvent the Shareholder Franchise 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 …

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