Three of the fully-independent director candidates—Rhonda J.
Parish, Mark Riegel and Sandra Elizabeth Taylor—nominated by AB
Value Management LLC, collectively with its affiliates (“AB
Value”), and together with 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)
(“RMCF” or the “Company”) for election to the Company’s Board of
Directors (the “Board”), today released an open letter to
shareholders about their qualifications, willingness to collaborate
with incumbent RMCF directors and commitment to best-in-class
corporate governance practices.
The full text of the letter follows:
Dear RMCF Shareholders:
On October 6, 2021, you will be making a very important decision
about the future of the Company and its Board at RMCF’s Annual
Meeting of Shareholders (the “2021 Annual Meeting”). As candidates
of the Concerned Shareholders of Rocky Mountain for election at the
2021 Annual Meeting, we wanted to take the opportunity to introduce
ourselves before engaging with many of you during the next few
We are Independent and
First, we truly value our independence. We have no prior
business or personal relationships with any member of the Concerned
Shareholders of Rocky Mountain. We agreed to participate in this
campaign because we believe in RMCF, and particularly in its brand.
Here are brief summaries of our qualifications:
- Rhonda J. Parish – Has decades of
corporate governance, franchising and legal experience in the
retail and restaurant industries in her executive leadership at
public companies, such as Walmart, Denny’s, Einstein Bagels and
- Mark Riegel – Possesses extensive
executive expertise specifically within the chocolate and
confection industry, particularly with respect to manufacturing and
marketing, including at Russell Stover Chocolates, Ferrara Candy
Company, and beginning career in brand management at Kraft;
- Sandra Elizabeth Taylor – Brings a
much-needed skillset to the Company of corporate social
responsibility, combined with her decades of experience serving on
public company boards and within executive leadership at DE Master
Blenders/Sara Lee (former director), Cappella Education (former
director) Starbucks (SVP, Corporate Responsibility) and Kodak (VP,
We feel that our experience and skill sets are well suited to
successfully turnaround the business, which we believe has
unfortunately faltered under the current management and the legacy
directors. With the void left due to Mary Thompson’s resignation
and the subsequent lack of core external experience in franchising,
confectionery manufacturing, and retailing, we believe our
qualifications have become even more valuable for the pro forma
RMCF Board to leverage.
We Will Collaborate with the Incumbent
Board and Management
Our professional experience and industry knowledge prepares us
well to immediately focus on addressing the Company’s business
challenges. That said, having served in senior leadership roles and
on other public company boards, we understand the value of
collaboration. We intend to work collaboratively with the current
management and the legacy directors to forge a new path for the
Company—one that would restore the Company, its brand and help
create shareholder value.
We Have No Preconceived Notions or
Agendas, Except for RMCF to Leverage our Experience to Maximize
We believe that the Concerned Shareholders of Rocky Mountain
have set forth a thoughtful and actionable plan to be executed upon
if we are elected. However, we are fully aware that once we are
“under the tent” we will need to be nimble and open-minded about
the right strategy for RMCF—and we will be. One thing is
certain—RMCF is in need of a turnaround, and we will contribute our
decades of highly relevant industry-specific experience to help
lead this effort.
After reading through the Board’s investor presentation and
other materials, we were alarmed to see that there does not appear
to be any acknowledgment of past business and financial woes at
RMCF. There also does not appear to be any acknowledgement that
there is a fractured base at RMCF that needs to be further
diagnosed and fixed. This is not acceptable to us. As part of a
newly-constituted Board, if elected, we will always be upfront with
shareholders—about the “good” and the “bad”—and will impress this
communication style throughout management and the whole RMCF
We are Committed to Best-in-Class
We believe that strong corporate governance serves as a
foundation for companies to maximize value for all shareholders. We
will strive to maintain an ecosystem in the boardroom that invites
robust discourse and supports and challenges management. We will
always ask many questions and then question every answer.
We were quite surprised that the Board’s recent investor
presentation does not address a shareholder-unfriendly poison pill
that has been in place for many years without shareholder approval
(particularly because the Concerned Shareholders of Rocky Mountain
are proposing it be removed). We will immediately advocate for the
termination of the poison pill and the adoption of a clear policy
guiding future adoptions should they ever be necessary.
We also plan to examine the Board’s decision-making process
surrounding its recent controversial decision to contract from
seven to six seats during a contested election and so close to the
2021 Annual Meeting.
The first question we would ask is:
Did the Board rely on the advice of expert
lawyers qualified to practice in Delaware (where RMCF is
incorporated) before deciding to shrink in size by one seat?
It appears prudent for any board to seek out this type of
specific advice before taking such an action, particularly in a
very hurried timeframe (one business day after a vacancy was
created due to a director resignation) during an election contest.
We will always seek to make fully informed decisions, availing
ourselves of expert advice as appropriate, in a thoughtful and
The second question we would ask is:
How the Board’s more recently appointed
directors ever got comfortable agreeing with the Company’s longer
tenured directors in making such an arguably shareholder
undemocratic decision to contract the Board in these
Though, to be frank, we cannot conceive of any reasonable
justification that could constitute an answer to this question.
We are also committed to proactive
engagement with shareholders and will be responsive to matters that shareholders have
clearly voiced their opposition to through low vote-support and
other means as they have done in the past on issues such as
compensation and the poison pill.
* * *
Our conviction has never been higher that RMCF is a great brand
in desperate need of board, governance and business refreshment. If
elected, we will work tirelessly on behalf of all shareholders to
position RMCF for great successes in the years to come.
Thank you for your time and consideration.
Rhonda J. Parish, Mark Riegel and Sandra Elizabeth Taylor
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
beneficially owns 460,189 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.
version on businesswire.com: https://www.businesswire.com/news/home/20210922005647/en/
John Glenn Grau InvestorCom LLC (203) 295-7841
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