Activist investor toys with proposing his own board candidates.
Investor J. Carlo Cannell, whose investment firms own 8.7% of outstanding shares of Rightside (NASDAQ:NAME)stock, might push for his own slate of three directors for the company’s board at Rightside’s annual meeting in June.
In February, after Rightside sold eNom to Tucows, Cannell started Save NAME Group to try to create a shareholder coalition to effect change. He has been upset with the company (publicly) for over a year.
In Rightside’s proxy statement for its upcoming annual meeting, the company wrote:
Tonga Partners, L.P. (“Tonga”), which is affiliated with Cannell Capital LLC (together with Tonga, “Cannell Capital”), a hedge fund with beneficial ownership of approximately 8.7% of Rightside’s outstanding common stock, has provided notice that it may propose its own slate of 3 nominees (the “Cannell Nominees”) to stand for election as directors. At this time, we have no knowledge of their intent to proceed with a solicitation for these nominees. If they do, however, you may receive solicitation materials from Cannell Capital seeking your proxy to vote for the Cannell Nominees. Our nominating and corporate governance committee has reviewed all director nominees, including the Cannell Nominees, in accordance with the director qualifications set forth in our corporate governance guidelines. Based on such review and the recommendation of our nominating and corporate governance committee, our Board of Directors unanimously recommends voting for the election of each of Diane M. Irvine, Robert J. Majteles and Taryn J. Naidu, whose names are set forth on the WHITE proxy card.
THE BOARD OF DIRECTORS URGES YOU NOT TO SIGN OR RETURN ANY PROXY CARD THAT MAY BE SENT TO YOU BY CANNELL CAPITAL. THE BOA RD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE BOARD’S NOMINEES, WHOSE NAMES ARE SET FORTH ON THE ENCLOSED WHITE PROXY CARD. Even if you have already returned a proxy card sent to you by Cannell Capital, you have every right to change your vote. You may revoke that proxy and vote as recommended by the Board of Directors by signing, dating and returning the enclosed WHITE proxy card in the enclosed postage-paid envelope or by voting via the Internet or by telephone by following the instructions provided on the enclosed WHITE proxy card. Only your latest dated proxy will be counted. THE BOARD OF DIRECTORS URGES YOU NOT TO RETURN ANY PROXY CARD SENT TO YOU BY CANNELL CAPITAL, EVEN AS A PROTEST VOTE AGAINST CANNELL CAPITAL OR THE CANNELL NOMINEES BECAUSE IT WILL NEGATE ANY EARLIER CARD YOU MAY HAVE SUBMITTED IN SUPPORT OF YOUR BOARD’S NOMINEES.
In a filing with the SEC today, Rightside details its discussions with Cannell and his representatives. It reveals that Cannell once proposed that Daniel Negari, founder of XYZ, be nominated to the board. Negari was a Rightside shareholder at the time. Rightside said it did not want to add a competitor to its board.