AB Value and Bradley Radoff Combine Efforts to Form the Largest Shareholder Group at Rocky Mountain Chocolate Factory and Implement Urgent and Necessary Change at the Company
August 17 2021 - 9:19AM
Business Wire
AB Value Management LLC, together with its affiliates (“AB
Value”), and the other participants in this solicitation
representing approximately 12.53% of the outstanding shares of
Rocky Mountain Chocolate Factory, Inc. (NASDAQ: RMCF) (the
“Company”), today announced that it has agreed with Bradley Radoff
(“Mr. Radoff” and together with AB Value, the “Concerned
Shareholders of Rocky Mountain”) to combine their efforts to
implement change at the Company. The Concerned Shareholders of
Rocky Mountain support AB Value’s previously announced slate of
highly-qualified director candidates for election to the Company’s
Board of Directors (the “Board”) consisting of Andrew T. Berger,
Rhonda J. Parish, Mark Riegel, Sandra Elizabeth Taylor and Mary
Kennedy Thompson.
“We are pleased to announce the formation of the Concerned
Shareholders of Rocky Mountain and are determined to continue
championing shareholder interests at the Company,” said Andrew T.
Berger, Managing Member of AB Value. “It is clear to us that all of
the Company’s recently announced changes have been purely
reactionary and only further demonstrate that many of the incumbent
directors will go to great lengths to avoid making difficult
shareholder-friendly decisions. This only strengthens our resolve
to continue our campaign to maximize value for all shareholders of
the Company.”
The decision to join forces to gain representation on the Board
comes on the heels of the Company’s failure to keep its promise to
refresh the Board with “world class directors” and seeming
incapability of demonstrating world class transparency.1 The
Concerned Shareholders of Rocky Mountain believe that its
highly-qualified director candidates, if elected, will not only
re-position the Company for success, but add a needed injection of
integrity to the boardroom.
The Concerned Shareholders of Rocky Mountain’s director
candidates for election to the Board are:
- Andrew T. Berger. Mr. Berger currently serves on the
Board of Directors of Rocky Mountain Chocolate Factory, Inc. He has
two decades of experience in investment analysis, investment
management, and business consulting. From March 1998 through
January 2002, Mr. Berger served as Equity Analyst for Value Line,
Inc. Since February 2002, Mr. Berger has served as President of
Walker’s Manual, Inc., an investment publisher that he transformed
into a business consulting company whose clients have included
public and private companies. Since 2011, Mr. Berger has been the
Managing Member of AB Value Management LLC, which serves as the
General Partner of AB Value, an investment partnership which
focuses on long-term investments in undervalued equities. Mr.
Berger has been a director of Image Sensing Systems, and its
successor Autoscope Technologies Corporation, a Nasdaq listed
holding company that engages in the development and marketing of
video and radar image processing products for use in traffic
applications, since October 2015. Mr. Berger was appointed
Executive Chairman of the Board of Directors of Image Sensing
Systems in June 2016, and its Chairman, CEO and President in 2021.
Mr. Berger previously was the Chair of the Nominating and Corporate
Governance Committee and a member of the Audit Committee and
Compensation Committee of Image Sensing Systems. Since May 2017,
Mr. Berger has been Chief Executive Officer of Cosi, Inc., a
fast-casual restaurant chain that operates over 25 domestic and
international company-owned and franchised units. In 2020, Cosi,
Inc. filed for Chapter 11 protection under the federal bankruptcy
laws, but it has since withdrawn its filing. Mr. Berger has served
as a member of the Board since his election by the Company’s
shareholders at the Company’s 2019 annual meeting of shareholders.
Pursuant to the Cooperation Agreement, the Company nominated Mr.
Berger for election as a director at the 2019 and 2020 annual
meetings of the Company’s shareholders. He earned a B.S. in
Business Administration with a concentration in finance from
Monmouth University. The Concerned Shareholders of Rocky Mountain
believe that Mr. Berger’s investment management experience and
experience within the food and franchising industry qualify him to
serve as a director of the Company.
- Rhonda J. Parish. Ms. Parish is a restaurant executive
with over thirty years of experience in the retail and restaurant
industries. Most recently, she was Chief Legal Officer and
Secretary at Ruby Tuesday, Inc., owner, operator and franchisor of
casual dining restaurants, from March 2015 to February 2018, with
leadership responsibilities for the legal, risk management, quality
assurance and corporate secretary functions. Along with the
Chairman of the Board of Directors she led Ruby Tuesday through its
exploration of strategic alternatives, which resulted in the sale
of the company from public to private ownership. Previously, she
held executive positions with Einstein Noah Restaurant Group, a
bagel shop operator, in Lakewood, CO from 2010 to January 2015,
Denny’s Corporation (and its predecessor companies), franchisor and
operator of franchised full-service restaurant chains, in
Spartanburg, SC from 1995 to June 2008 and Walmart Stores, Inc., a
retail corporation, in Bentonville, AR from September 1983 to 1994.
Prior board service has included membership on the United States
Chamber of Commerce Board of Directors and the board of directors
of both the Charles Lea Center and the Charles Lea Center
Foundation in Spartanburg, SC. Ms. Parish also served on the Board
of Directors of the Center for Legal Inclusiveness (“CLI”), a
501(c)(3) dedicated to advancing diversity in the legal profession
by actively educating and supporting private and public sector
legal organizations in their own individual campaigns to create
cultures of inclusion, and was on the CLI Advisory Council. The
Concerned Shareholders of Rocky Mountain believe Ms. Parish’s years
of experience in the retail and restaurant industries qualify her
to serve as a director of the Company.
- Mark Riegel. Mr. Riegel is a veteran of the confection
industry. Since 2021, Mr. Riegel has served as the President and
CEO of FroDo Baking Company, LLC. FroDo Baking Company is a
national manufacturer and distributor of frozen dough products, as
well as other baked goods, to leading retailers. Prior to his role
as President and CEO of FroDo Baking Company, LLC, Mr. Riegel
served as Vice President of Marketing for Russell Stover
Chocolates, a supplier of candy and chocolate, from 2017-2020,
where he had commercial accountability related to all marketing
efforts for an over $500 million organization. In addition, he was
selected to attend the Lindt & Sprungli Senior Leadership
Program. From January 2014-November 2017, Mr. Riegel served at
various roles Ferrara Candy Company, a sweet snacking company, to
include Vice President of Iconic Brands. From 2007-2014, Mr. Riegel
served in various management positions with Kraft Foods Group. Mr.
Riegel served as an Army Officer from 2002-2007. He earned his BS
in Engineering at the United States Military Academy and completed
an MBA at the Kellogg School of Management. The Concerned
Shareholders of Rocky Mountain believe Mr. Riegel’s extensive
business experience, especially with confection companies,
qualifies him to serve as a director of the Company.
- Sandra Elizabeth Taylor. Ms. Taylor is a pioneer in
corporate social responsibility and has served as the President and
Chief Executive Officer of Sustainable Business International LLC,
an independent consultancy she founded which specializes in
environmental sustainability and social responsibility for global
businesses, since 2008. Previously, Ms. Taylor served as Senior
Vice President of Corporate Social Responsibility for Starbucks
Corporation (NASDAQ: SBUX), the international coffee company and
coffeehouse chain, from 2003 to 2008. From 1996 until 2003, Ms.
Taylor served as Vice President and Director of Public Affairs for
Eastman Kodak Company (NYSE: KODK), a technology company that
produces imaging products with its historic basis on photography.
She has also held senior leadership positions with a number of
other organizations, including as Vice President of Public Affairs
for ICI Americas, Inc., a manufacturer and distributor of chemical
products, from 1987 to 1996, and as Executive Director of the
European American Chamber of Commerce in the United States, from
1991 to 1992; and as Foreign Service Officer – International
Economist, US Department of State. Ms. Taylor’s public company
directorship experience includes service on the Board of Directors
of Capella Education Company (NASDAQ: CPLA), an education services
company, from 2006 to 2011, where she served on the Governance
Committee and the Compensation Committee; and D.E. Master Blenders
1753 N.V. (SWX: DEMB), a European coffee and tea company, from 2012
until its sale to Joh. A. Benckiser GmbH in 2013. In addition, Ms.
Taylor currently sits on the board of several non-profit
organizations, including the Center for International Private
Enterprise, since 1998; the Chesapeake Bay Foundation, since 2015;
and Island Press since 2017. Ms. Taylor previously served on the
board of the Mead Center – Arena Stage 2012-2017; Landesa Rural
Development Institute, 2012 – 2018; the Seattle Public Library
Foundation, from 2004 to 2008; the Public Affairs Council, from
1997 to 2003; the National Center for Asia-Pacific Economic
Cooperation, from 2005 to 2009; the US Chamber of Commerce from
2001 to 2008; and the Women’s Leadership Board of the Kennedy
School of Government at Harvard University, from 1998 to 2009. Ms.
Taylor earned a Juris Doctor degree from Boston University School
of Law, a Bachelor of Arts in French from Colorado Women’s College
and a Masters in Business Administration from the Bordeaux School
of Management—Wine MBA Program. The Concerned Shareholders of Rocky
Mountain believe Ms. Taylor’s prior experience as a director of
numerous public companies and business expertise qualify her to
serve as a director of the Company.
- Mary Kennedy Thompson. Ms. Thompson currently serves on
the Board of Directors of Rocky Mountain Chocolate Factory, Inc.
She is a veteran of the franchising industry. Ms. Thompson has
served as a member of the Board since the conclusion of the 2019
annual meeting of the Company’s shareholders, and was nominated by
the Company for election as a director at the Company’s 2019 and
2020 annual meetings of shareholders pursuant to the Cooperation
Agreement. Since 2015, Ms. Thompson has served as the Chief
Operating Officer of Neighborly Brands (“Neighborly”), a service
provider focused on repairing, maintaining and enhancing customers’
homes and businesses, where she oversees the ongoing business
operations within the company. Neighborly is the holding company
for 26 service-based franchise organizations focused on repairing,
maintaining, and enhancing homes and business properties.
Neighborly provides a diverse array of specialty services through
more than 4,800 franchised locations in ten countries with
system-wide revenue of $2.4 billion in 2018. Prior to her
appointment as Neighborly’s Chief Operating Officer, Ms. Thompson
served as the President of Mr. Rooter Plumbing Corporation, a
franchisor focused on independently owned and operated plumbing
franchisees, from October 2006 to July 2015. From December 1994 to
October 2006, Ms. Thompson served as the President of and held
other various leadership positions (including being a multi-unit
franchisee) with Cookies by Design, a franchise concept
specializing in customized cookie gifts produced at mall-based
retail locations. Ms. Thompson served as an Officer in the United
States Marine Corps from December 1985 to April 1993. She earned
her B.A. in English from the University of Texas at Austin and
completed the mini MBA Program in franchise management at the
University of St. Thomas College of Business. The Concerned
Shareholders of Rocky Mountain believe Ms. Thompson’s extensive
business experience, especially with franchised companies,
qualifies her to serve as a director of the Company. A certified
franchise executive by the International Franchise Association
(“IFA”), Ms. Thompson has received the Bonny Levine Award for
leadership by the IFA and was the U.S. Business Review Editor’s
Choice for top Executives of the Year.
Important Additional Information
AB Value Partners, LP and AB Value Management LLC, Andrew T.
Berger, Bradley Radoff, Rhonda J. Parish, Mark Riegel, Sandra
Elizabeth Taylor and Mary Kennedy Thompson intend to file a
preliminary proxy statement and an accompany form of proxy card
with the SEC to solicit proxies from shareholders of the Company
for use at the Annual Meeting. THE PARTICIPANTS STRONGLY ADVISE ALL
SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER
PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Such proxy materials will be 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
In accordance with Rule 14a-12(a)(1)(i) under the Securities
Exchange Act of 1934, as amended, 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,
Sandra Elizabeth Taylor and Mary Kennedy Thompson (collectively,
the “Participants”). As of the date hereof, AB Value Partners, LP
directly owns 224,855 shares of common stock, $0.01 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 305,000 shares of
Common Stock. As of the date hereof, Ms. Thompson directly owns
2,000 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. However, by virtue of the relationship
among the Participants and the formation by them of a Section 13(d)
group, all the Participants, individually, are deemed to
beneficially own the 460,189 shares of Common Stock owned in the
aggregate by AB Value Partners, LP and AB Value Management LLC.
1 See AB Value’s press release dated August 2, 2021.
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