Rocky Mountain Chocolate Factory, Inc. · NASDAQ:RMCF
Rocky Mountain Chocolate Factory — Proxy Contest (September 2021)
98 slides from Rocky Mountain Chocolate Factory's proxy contest presentation, Sep 21, 2021
Slide 1: Proxy Contest to Change Leadership at Rocky Mountain Chocolate Factory
A B V al u e P a r t n e r s , L P & A B V a l u e Ma n a g e m e n t LL C Bradley Radoff Pr o x y C o n te s t to C h a n g e Le a d e r s h i p a t R o c k y M o un t a i n C h o c o la te F a c t o r y , I n c . T H E C O N C E R N E D SH AR E H O L D E RS O F I mm e dia t e C han g e i s N e c e
Slide 2: Disclaimer
The views expressed in this presentation (this “Presentation”) represent the opinions of AB Value Partners, LP and/or certain of its affiliates (collectively, “AB Value”) and the other participants in this solicitation (collectively, the “Concerned Shareholders of Rocky Mountain”) that hold shares i
Slide 3: Agenda
3 THE CONCERNED SHAREHOLDERS OF A B V al u e P a r t n e r s , L P & A B V a l u e M a n a g e m e n t LL C B r a d l ey R a d o f f Executive Summary Need for Immediate Change Shareholders' Plan Nominees Best Suited to Effect Change Shareholder Call to Action Appendix
Slide 4: Why We Are Here
Need for Immediate Change S h a r e h o l d e r s ’ P l a n Executive Summary S h a r e h o l d e r C a l l t o A c t i o n Appendix Nominees Best Suited to Effect Change 1. Total Shareholder Return or TSR is defined as the total accumulated percentage return with adjustments made for dividends (rei
Slide 5: What Shareholders Should Know
Executive Summary Appendix N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n What Shareholders Should Know – We have the Right People and the Right Strategy x A B V a
Slide 6: No Real Board Refreshment Prior to AB Value's Campaign
Executive Summary Appendix N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n No Real Board Refreshment Prior to AB Value’s Campaign in 2019 * Edible Arrangements tran
Slide 7: AB Value's push for board changes prompted run-up in stock
Executive Summary N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n A pp e nd i x AB Value’s push for further board changes prompted recent run - up in RMCF stock 7
Slide 8: Accomplished Slate of Investor Nominees
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix We are an Accomplished Slate of Investor Nominees with Trusted Credentials Nominees Sandra Elizabeth Taylor R h o nd a J . P a r
Slide 9: Vote the Blue Proxy Card
Need for Immediate Change S h a r e h o l d e r s ’ P l a n Executive Summary S h a r e h o l d e r C a l l t o A c t i o n Appendix Nominees Best Suited to Effect Change V o t e t h e B l u e P r o x y C a r d THE CONCERNED SHAREHOLDERS OF ROCKY MOUNTAIN RECOMMEND A VOTE “FOR” THE NOMINEES LISTED I
Slide 10: Agenda
THE CONCERNED SHAREHOLDERS OF A B V al u e P a r t n e r s , L P & A B V a l u e M a n a g e m e n t LL C B r a d l ey R a d o f f Executive Summary Need for Immediate Change Shareholders' Plan Nominees Best Suited to Effect Change Shareholder Call to Action Appendix 10
Slide 11: Need for Immediate Change - TSR and Financial Underperformance
11 N ee d For I mm e dia t e C han g e - TSR and Financial Underperformance
Slide 12: Prolonged Underperformance Prior to AB Value's Involvement
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Prior to AB Value’s Involvement, RMCF Sustained Prolonged Periods of Underperformance Source: FactSet, TSR as of Apr
Slide 13: Consistently Underperformed Before COVID-19
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix RM C F C o n s i s t e n t ly U nd e r p e r f o r m e d B e f o re C O V I D - 19 S o u r c e : F a c t S e t , T S
Slide 14: Bryan Merryman has Failed to Deliver as CEO
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Bryan Merryman has Failed to Deliver as the CEO S o u r c e : F a c t S e t B r y a n M e rr y m a n ’ s C E O te nu
Slide 15: Same Failed Strategy for Years (Pre-COVID-19)
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix RMCF has Pursued the Same Failed Strategy for Years (Pre - COVID - 19) » RMCF has pursued a strategy that has result
Slide 16: Strategy Resulted in Declining Revenue and Profits
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix 31% $ M N RMCF’s Strategy has Resulted in Declining Revenue and Profits 23% $ M N 77% 74% S o u r c e : R M C F F i
Slide 17: Revenue Decline Across All Major Segments
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix The Revenue Decline is Across ALL Major Reported Segments 24% 23% S o u r c e : R M C F F i l i n g s 17
Slide 18: Revenue and Segment Profits Consistently Declined
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix R e t a il Both Revenue and Segment Profits have Consistently Declined $ M N $ M N Franchising U - Swirl S o u r c e
Slide 19: Failed to Keep up with Competitors and Market Growth
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix RMCF has Failed to Keep up with Competitors and has Missed Market Growth Opportunities 19 x Roughly one - third of c
Slide 20: Need for Immediate Change - Strategy Failures
20 N ee d For I mm e dia t e C han g e - Strategy Failures
Slide 21: Same Strategy for Years Expecting a Different Outcome
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix RMCF has Pursued the Same Strategy for Years Expecting a Different Outcome 21 Strategy 201 5 1 0 - K 202 0 1 0 - K 2
Slide 22: Broken Promises - Store Footprint
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Broken Promises – Store Footprint 22 3Q 2018 Earnings Call I was wondering about the 2018 strategy to improve the E
Slide 23: Broken Promises - Store Footprint (contd.)
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Broken Promises – Store Footprint (contd.) Stores open as of year end FY15 FY16 FY17 FY18 FY19 FY20 FY21 R o cky M o
Slide 24: Broken Promises - Store Footprint (contd.)
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Broken Promises – Store Footprint (contd.) W ha t M anag e m e n t d e li v e r e d ( c on t . ) x Declining Factory
Slide 25: Broken Promises - Factory Margins and Profitability
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Broken Promises – Factory Margins and Profitability 2Q 2018 Earnings Call With your huge operating cash flow, you've
Slide 26: Broken Promises - Factory Margins and Profitability (contd.)
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix B r o k e n P r o m i s e s – F a c t o ry M a rg i n s a n d P r o f i t a b i l i t y (c o n t d . ) W ha t M anag
Slide 27: Broken Promises - Factory Margins and Profitability (contd.)
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Source: RMCF's Annual Report on Form 10 - K filed with the SEC on May 27, 2015 RMCF's Annual Report on Form 10 - K f
Slide 28: Failure to Develop Online Presence
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Failure to Develop Online Presence 4Q 2017 Earnings Call And I mean are there any metrics that you are using to have
Slide 29: RMCF.com Looks Outdated Compared to Competitors
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix RMCF.com Looks and Feels like an Outdated Website Compared to Partners and Competitors RMCF.com Immaculate Confectio
Slide 30: Website Should Tell RMCF's Story and Improve Brand Awareness
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix RMCF.com See’s Candies The Website Should be a Platform to tell RMCF's Story and Improve Brand Awareness 30
Slide 31: Website Omits Holiday Marketing and E-commerce Opportunities
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix The Website Omits Strategic Marketing and E - commerce Opportunities for the Holidays RMCF.com Godiva Chocolates 31
Slide 32: Website Should Enhance Customer Loyalty
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix The Website Should Enhance Customer Loyalty through a Unique Digital Experience R M C F . c om G hi r a r d e ll i C
Slide 33: Current Buying Experience from RMCF.com
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix C u rr e n t B u y i n g E x p e ri e nc e f r o m RM C F . c o m Only 20 RMCF products are featured on Edible’s web
Slide 34: How RMCF Missed on E-commerce Opportunity
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix How RMCF Missed on E - commerce Opportunity 75% E - commerce revenue growth in 2020 3 E - c o mm e r c e r e v e nu
Slide 35: Need for Immediate Change - Poor Capital Allocation
35 N ee d For I mm e dia t e C han g e - P oo r C a p i t a l A ll o c a t i o n
Slide 36: Broken Promises - Acquisition of U-Swirl
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Broken Promises – Acquisition of U - Swirl 3 Q 201 5 E a r n i n g s C a ll And on the U - Swirl, could you give us
Slide 37: Broken Promises - Acquisition of U-Swirl (contd.)
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Broken Promises – Acquisition of U - Swirl (contd.) W ha t M anag e m e n t d e li v e r e d x 51% decline in revenu
Slide 38: History of Share Repurchases
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix » RMCF has not repurchased shares since FY17, while still generating +$4M in Operating Cash Flows (pre - COVID - 19)
Slide 39: Need for Immediate Change - Failed Partnerships
39 N ee d For I mm e dia t e C han g e - Failed Partnerships
Slide 40: Edible Arrangements Fiasco: The Agreement
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Edible Arrangements Fiasco: The Agreement Deal Terms: • RMCF announced on December 23, 2019 that it had entered into
Slide 41: Edible Arrangements Fiasco: Shareholder Concerns
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Edible Arrangements Fiasco: Shareholder Concerns C h a n g e i n M e s s a g i n g S t a t e m e n t s a t t h e S t
Slide 42: Canadian Franchisee Generated Revenues of $365.6 Million
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix In the Last 20 Years, the Canadian Franchisee has Generated Revenues of $365.6 Million. 1 VS 42 1 . Imm a c u l a t
Slide 43: CEO's Failure to Renegotiate Contract Resulted in Lawsuit
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix We Believe CEO's Failure to Renegotiate Contract Resulted in a Lawsuit with one of RMCF's Largest and Most Successfu
Slide 44: Need for Immediate Change - Weak Corporate Governance
44 N ee d For I mm e dia t e C han g e - W e a k C o r p o r a te G o v e r n a n c e
Slide 45: Board has Exhibited Little Regard for Corporate Governance
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix The Board has Exhibited Little Regard for Corporate Governance The legacy of the incumbent Board’s approach to C o r
Slide 46: Poison Pill in Place Since Last Century
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix • RMCF has had a poison pill in place since last century 1 • The current poison pill has the following attributes: •
Slide 47: Delaying an Annual Meeting is Not Good Governance
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Delaying an Annual Meeting is Not Representative of Good Corporate Governance • During our 2019 campaign for change,
Slide 48: AB Value's Pressure Responsible for Governance Changes
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix AB Value’s Pressure is Responsible for Recent Governance Changes J un e 202 1 A B V a l u e su gg e s t e d to t h e
Slide 49: History of Refreshment at RMCF
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix $0 $5 $10 $15 History of Refreshment at RMCF 3 - Dec - 2018 AB V al u e m a k es i n i t ia l i n v e s t m e n t i
Slide 50: Shareholder Voting Results and Director Tenure
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Shareholder Voting Results and Director Tenure for the Incumbent Board Members Director 2015 2016 2017 2018 2019 202
Slide 51: Compensation Committee Response to Executive Pay Issues
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix How has the Compensation Committee Responded to Executive Pay Issues Raised and Resulting Low Shareholder Support? S
Slide 52: Single-Trigger Vesting and Favorable Employment Terms
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix • RMCF’s equity incentive plan has a single - trigger accelerated vesting for changes in control • Single - triggers
Slide 53: Poor Compensation Governance Starts at the Top
Executive Summary Nee d f or I mme d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix 1. https://www.newspapers.com/clip/52304131/reno - gazette - journal / Poor Compensation Governance Starts at the To
Slide 54: Agenda
THE CONCERNED SHAREHOLDERS OF A B V al u e P a r t n e r s , L P & A B V a l u e M a n a g e m e n t LL C B r a d l ey R a d o f f Executive Summary Need for Immediate Change Shareholders' Plan Nominees Best Suited to Effect Change Shareholder Call to Action Appendix 54
Slide 55: RMCF Currently Has No Real Plan
Executive Summary Need for Immediate Change Shareholders’ Plan Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix S o u r c e : R M C F F i l i n g s 55 RMCF Currently Has No Real Plan R M C F C l a i m s t o S h a r e h o l d e r s The Truth The Company acc
Slide 56: RMCF Claims to Shareholders vs. The Truth
Executive Summary Need for Immediate Change Shareholders’ Plan Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix S o u r c e : R M C F F i l i n g s 56 R M C F C l a i m s t o S h a r e ho l d e r s The Truth Fo c u s o n d e li v e ri n g s t o c k ho l d
Slide 57: There is No Real Improvement at RMCF
Shareholders’ Plan Executive Summary Need for Immediate Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Nominees Best Suited to Effect Change T h e re is N O R e al I m p r o v e m e n t at RM C F S o u r c e : R M C F F i l i n g s 57 % change 1Q20 1Q21 1Q22 1Q22 vs 1Q20 (pre - Covid)
Slide 58: Our Priorities
Need for Immediate Change Shareholders’ Plan Executive Summary S h a r e h o l d e r C a l l t o A c t i o n Appendix Nominees Best Suited to Effect Change Our Priorities 1. Franchisee Success – Reverse the Long - Term Trend of Closures • Customer Experience • B u il d O u t C o s t • B r a n d R e
Slide 59: Priorities: Franchisee Success
Shareholders’ Plan Appendix E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n Customer Experience Build Out Cost Brand Refresh • Excite and solidify the best/most profit
Slide 60: Priorities: Factory Profitability
Shareholders’ Plan Appendix E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n Our Priorities: Factory Profitability – End the Long - Term Trend of Declines L o c a t i o
Slide 61: Factory Profitability (contd.)
Shareholders’ Plan Executive Summary Need for Immediate Change Nominees Best Suited to Effect Change Shareholder Call to Action Appendix Our Priorities: Factory Profitability – End the Long - Term Trend of Declines (contd.) 4 Hour Drive to I - 25 3 Hour Drive to I - 40 3.5 Hour Drive to I - 70 “ T o
Slide 62: Priorities: Resolve Edible Arrangement Deal
Shareholders’ Plan E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n A pp e nd i x R es o l v e D e a l • RMCF does not currently control its own digital sales • The Boa
Slide 63: Priorities: Canadian Franchisee Agreement
Shareholders’ Plan E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n A pp e nd i x Our Priorities: Canadian Franchisee – Reach Mutually Beneficial Agreement with Immacul
Slide 64: Brand Message, Store Presentation and Competitive Positioning
Shareholders’ Plan Appendix E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n B r a n d M ess a g e & S t o r e P r es e n t a t i o n Competitive Positioning • F o c u
Slide 65: Lack of Product Innovation
Shareholders’ Plan Executive Summary Need for Immediate Change Nominees Best Suited to Effect Change Shareholder Call to Action Appendix 1. https://www.foodnavigator - usa.com/Article/2021/06/16/Chocolate - consumption - on - the - rise - survey - finds 2. id L a c k o f P r o duc t i n n o v a t i
Slide 66: Priorities: Best in Class Governance Reforms
Shareholders’ Plan S h a r e h o l d e r C a l l t o A c t i o n A pp e nd i x Executive Summary Need for Immediate Change Nominees Best Suited to Effect Change Our Priorities: Best in Class Governance Reforms Reforms • Maintain a board of independent directors who are diverse not only in gender and
Slide 67: Our 100-Day Plan
Executive Summary Need for Immediate Change Shareholders’ Plan Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Our 100 - Day Plan 100 Days Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Week 14 W ee k s 1 -
Slide 68: Agenda
THE CONCERNED SHAREHOLDERS OF A B V al u e P a r t n e r s , L P & A B V a l u e M a n a g e m e n t LL C B r a d l ey R a d o f f Executive Summary Need for Immediate Change Shareholders' Plan Nominees Best Suited to Effect Change Shareholder Call to Action Appendix 68
Slide 69: RMCF Failures are Result of a Poorly Constituted Board
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix *Mostly supply chain experience, limited known manufacturing experience Board Members, Roles, and Key Committees Professional Exp
Slide 70: Chairperson Background and Inconsistent Performance
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix WORK EXPERIENCE COMPANY YEARS POSITION 1 Chief Executive Officer 2020 – 2021 1 Executive Vice President, Platforms and Technology
Slide 71: Mr. Mewawalla's Recent Experience is Irrelevant
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix M r . M e w a w a l l a ' s R e c e n t E x p e ri e nc e is C o m p l e t e ly I rr e l e v a n t t o W h at RM C F N ee d s » W
Slide 72: GVIC Cooperation Agreement
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix 7 2 G l o b al V a l u e I n v e s t m e n t C o r p . G VI C C oo p e r a ti o n A g r ee m e n t 1 On August 12, 2021 (the “GVI
Slide 73: Why RMCF Nominees are not the Right Fit
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix 73 Why RMCF Nominees are not the right fit Topics F o c u s Ar e a Rahul Mewawalla B r y a n J . M e rr y man Brett P. Seabert Je
Slide 74: The Clear Choice Before Shareholders
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix The Clear Choice Before Shareholders RMCF Nominees Prior Relevant Experience Rahul Mew a w a lla ☐ Bryan J. M e rr y man ☐ B r e
Slide 75: Nominee Professional Highlights
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Nominee P r o f e ss i o n a l H i g h li g ht s Academic Skills Sandra Elizabeth Taylor • Sustainable Business International LLC
Slide 76: Sandra E. Taylor
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Sandra E. Taylor Ms. Taylor is a pioneer in corporate social responsibility and has served as the President and Chief Executive O
Slide 77: Rhonda J. Parish
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix R h o n d a J . Pa r i s h Ms. Parish is a restaurant executive with over thirty years of experience in the retail and restaurant
Slide 78: Mark Riegel
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix M a rk Ri e g e l M r . Ri e g el i s a v e t e r a n o f t h e c on f e c t i o n i ndu s t r y . • Since 2021, Mr. Riegel has s
Slide 79: Andrew T. Berger
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix A nd r e w T . B e r g e r Mr. Berger currently serves on the Board of Rocky Mountain Chocolate Factory, Inc. Mr. Berger has serv
Slide 80: Andrew T. Berger's Track Record at Autoscope
Executive Summary Need for Immediate Change S h a r e h o l d e r s ’ P l a n Nominees Best Suited to Effect Change S h a r e h o l d e r C a l l t o A c t i o n Appendix Andrew T. Berger’s Track Record at Autoscope (Image Sensing Systems) 80 Source: Factset. Starting date for both the charts above
Slide 81: Agenda
THE CONCERNED SHAREHOLDERS OF A B V al u e P a r t n e r s , L P & A B V a l u e M a n a g e m e n t LL C B r a d l ey R a d o f f Executive Summary Need for Immediate Change Shareholders' Plan Nominees Best Suited to Effect Change Shareholder Call to Action Appendix 81
Slide 82: Conclusion
Need for Immediate Change S h a r e h o l d e r s ’ P l a n Executive Summary S h a r e ho l d e r C a l l t o A c t i on Appendix Nominees Best Suited to Effect Change Conclusion 82 • As The Concerned Shareholdersof Rocky Mountain Chocolate Factory, we are not just owners of the company's stock – w
Slide 83: Vote the Blue Proxy Card
S h a r e h o l d e r s ’ P l a n S h a r e ho l d e r C a l l t o A c t i on Appendix Nominees Best Suited to Effect Change Executive Summary Need for Immediate Change V o t e t h e B l u e P r o x y C a r d THE CONCERNED SHAREHOLDERS OF ROCKY MOUNTAIN RECOMMEND A VOTE “FOR” THE NOMINEES LISTED IN
Slide 84: Appendix
THE CONCERNED SHAREHOLDERS OF A B V al u e P a r t n e r s , L P & A B V a l u e M a n a g e m e n t LL C B r a d l ey R a d o f f Executive Summary Need for Immediate Change Shareholders' Plan Nominees Best Suited to Effect Change Shareholder Call to Action Appendix 84
Slide 85: Settlement Discussions with RMCF
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n • AB Value has always maintained an open and collaborative mindset abou
Slide 86: Settlement Proposals and Counterproposals
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n • On or around September 13, 2021, the RMCF Board proposed the followin
Slide 87: Email from Andrew T. Berger, September 16, 2021
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n Email from Andrew T. Berger to Jeffrey Geygan and Mary Kennedy Thompson
Slide 88: Email from Jeffrey Geygan, September 18, 2021
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n Email from Jeffrey Geygan to Andrew T. Berger, dated September 18, 2021
Slide 89: We Thank Mary Thompson for Dedicated Service
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n • On September 16, 2021, Mary Thompson gave notice to the Board that sh
Slide 90: Mary Thompson's Resignation Leaves a Void
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n • Due to Ms. Thompson’s resignation, there are now no independent direc
Slide 91: Board Unilaterally Contracted Its Size
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n • On September 19, 2021, after Ms. Thompson’s resignation, the Board un
Slide 92: Legal Threats Against Mr. Berger
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n • On September 7, 2021, Chairperson Mewawalla sent Mr. Berger a persona
Slide 93: Ignore the Board's Baseless Attacks on Andrew Berger
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n Shareholders Should Ignore the Board’s Baseless Attacks on Andrew T. Be
Slide 94: Attacks on Andrew Berger (cont'd): Cosi Track Record
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n Shareholders Should Ignore the Board’s Baseless Attacks on Andrew Berge
Slide 95: Attacks on Andrew Berger (cont'd): Control of Cosi
A pp e nd i x E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n • R M C F B o a rd D i s t o r t i on : • M r . B er g er “ t oo k c o
Slide 96: Cause and Effect - Campaign #1
Appendix E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n $7 $8 $9 $10 1 - Nov - 18 1 - D e c - 1 8 1 - Jan - 19 1 - F e b - 1 9 1 - M
Slide 97: Cause and Effect - Campaign #2
Appendix E x e c u t i v e S u mm a r y N ee d f o r I mm e d i a t e C h a n g e S h a r e h o l d e r s ’ P l a n N o m i n ee s B e s t S u i te d t o E f f e c t C h a n g e S h a r e h o l d e r C a l l t o A c t i o n Cause and Effect – RMCF Consistently Refuses to Act Unless Agitated by Conce
Slide 98: Industry Specific Benchmarks
S h a r e h o l d e r s ’ P l a n S h a r e h o l d e r C a l l t o A c t i o n Appendix Nominees Best Suited to Effect Change Executive Summary Need for Immediate Change Industry Specific Benchmarks 98 S&P 500 / Food Beverage & Tobacco - IG (SP501) Name Symbol Mkt Cap ($MN) S&P 500 / Food Beverage
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