BT Brands Files Notice of Exempt Solicitation to Update Noble Roman’s Shareholders Not to Vote in Current Proxy

Rhea-AI Summary

BT Brands (NASDAQ: BTBD) has filed a Notice of Exempt Solicitation urging Noble Roman's (NROM) shareholders to withhold support for director candidates at the upcoming August 27, 2024 meeting. BT Brands, owning about 1.56 million NROM shares, claims Noble Roman's Board prevented them from nominating a competing slate of directors. They allege that CEO A. Scott Mobley failed to provide promised nomination materials within the April 12-May 12 window, effectively blocking their nomination attempt. BT Brands argues this turned a potentially contested election into an uncontested one, entrenching current leadership. They're calling for shareholders to consider these actions when voting.

Positive

• BT Brands owns approximately 1.56 million shares of Noble Roman's common stock, indicating a significant stake in the company

Negative

• BT Brands was unable to nominate their slate of directors for the upcoming shareholder meeting
• Noble Roman's Board actions may have prevented a fair election process, potentially harming shareholder rights
• The inability to achieve a quorum at the previous year's meeting suggests potential governance issues at Noble Roman's

Insights

Corporate Governance Expert

This situation highlights significant corporate governance issues at Noble Roman's. The company's actions appear to be deliberately obstructing shareholder rights, particularly in the director nomination process. By failing to provide the promised questionnaire and then claiming a missed deadline, Noble Roman's management seems to be entrenching themselves at the expense of shareholder democracy.

This behavior raises red flags about the company's commitment to shareholder interests and could potentially lead to legal challenges. The lack of transparency in setting nomination deadlines and the apparent contradiction between the CEO's communication and the company's later stance are concerning governance practices.

Investors should be wary of companies that impede shareholder participation, as it often correlates with poor long-term performance and misalignment of interests between management and shareholders. This situation may warrant increased scrutiny from regulatory bodies and could potentially lead to shareholder activism or litigation.

Legal Analyst

The actions described in this letter could potentially expose Noble Roman's to legal risks. By apparently preventing shareholders from exercising their nomination rights, the company may be in violation of Indiana corporate law and SEC regulations regarding shareholder rights and proxy solicitations.

The discrepancy between the CEO's communication and the company's subsequent actions could be seen as a form of misrepresentation. If proven, this could lead to shareholder lawsuits or regulatory intervention. The company's refusal to postpone the meeting to allow for nominations further strengthens the case for potential breach of fiduciary duty.

Investors should be aware that such governance issues often result in costly legal battles and can negatively impact a company's reputation and stock performance. The SEC may take interest in this case, potentially leading to investigations or enforcement actions.

Investor Relations Specialist

This situation presents a significant reputational risk for Noble Roman's. The company's actions, as described by BT Brands, suggest a lack of transparency and potentially a disregard for shareholder rights. Such practices can erode investor confidence and lead to negative market sentiment.

The apparent attempt to prevent a contested election could be seen as a red flag by institutional investors and proxy advisory firms. This may result in increased scrutiny of the company's governance practices and potentially lead to negative voting recommendations in future proxy contests.

For retail investors, this situation underscores the importance of actively engaging with company communications and exercising voting rights. The lack of a quorum at the previous meeting suggests low shareholder participation, which management may be exploiting. Increased shareholder engagement could pressure the company to adopt more shareholder-friendly practices and improve overall governance.

WEST FARGO, N.D.--(BUSINESS WIRE)-- BT Brands, Inc., West Fargo, North Dakota-BT Brands (NASDAQ: BTBD) today responded to the inquires of many Noble Roman shareholders (NROM) regarding BT Brands role in the upcoming shareholders’ meeting with the following update setting forth the continued efforts of Noble Roman Directors to prevent an open shareholder vote thereby disenfranchising current Noble Roman’s shareholders, including BT Brands, from exercising their shareholders' rights under Indiana law.

SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

NOTICE OF EXEMPT SOLICITATION

NAME OF REGISTRANT: Noble Roman’s, Inc.
NAME OF PERSON RELYING ON EXEMPTION: BT Brands, Inc., Kenneth W. Brimmer, Gary Copperud
ADDRESS OF PERSON RELYING ON EXEMPTION: 405 Main Avenue West, Suite 2D, West Fargo, North Dakota 58078
Written materials are submitted pursuant to Rule 14a-6(g)(1) promulgated under the Securities Exchange Act of 1934:

BT Brands, Inc., Kenneth W. Brimmer (Chairman and Chief Financial Officer) and Gary Copperud (Chief Executive Officer and Director) today released the following open letter to shareholders of Noble Roman’s, Inc. Between them they own approximately 1.56 million shares of Noble Roman’s common stock.

Dear Fellow Noble Roman’s Shareholder:

We urge you to WITHHOLD your support for director candidates when you vote in connection with the upcoming annual shareholder meeting, scheduled for August 27, 2024.

We communicated our intention to nominate a competing slate of three directors for this meeting but were stymied in that effort by the Noble Roman’s Board of Directors. We believe that shareholders should be aware of this fact as they consider the Company’s proposal to re-elect three incumbents.

As you may recall, BT Brands nominated Gary Copperud for director at last year’s meeting. We solicited proxies in support of his nomination with support from an adequate number of shareholder votes to defeat incumbent CEO A. Scott Mobley, the only candidate seeking election.

Ten days before the scheduled meeting date, however, Noble Roman’s announced that it had “recently determined” that BT Brands was not a stockholder “of record” at the time of the nomination and that Mr. Copperud’s nomination was therefore “disqualified” under the bylaws.

The Company postponed the meeting until August 10, 2023, but even with an additional month to lobby shareholders, the Company was unable to muster a quorum. The meeting was adjourned with no action being taken, and CEO Mobley was able to retain his seat on the board for another election.

For the 2024 Annual Meeting, we pursued our plan to nominate a slate of three qualified candidates, allowing the shareholders to choose. After satisfying the Company’s technical objection, we wrote to CEO Mobley in April 2024 to advise of our intention. We are aware of the Company’s reasonable requirement that each director candidate submit a questionnaire to be properly nominated, and we asked if we could use the 2023 questionnaire or whether the Company was using a new one in 2024.

CEO Mobley responded by e-mail to Kenneth W. Brimmer on April 24, 2024. Mr. Mobley’s e-mail stated in its entirety as follows:

Kenneth

The materials for the 2024 Shareholder meeting have not yet been finalized. There will, however, be a 2024 questionnaire for director candidates, and it will be forwarded to you as it becomes available.

A. Scott Mobley
President
Noble Roman’s, Inc.

Noble Roman’s never provided the materials promised by Mr. Mobley, nor did the Company issue a press release or similar statement identifying the date of the 2024 annual meeting, at least not prior to the filing of definitive proxy materials on August 7, 2024, 20 days before the proposed meeting date.

Why did the Company never send us the materials needed to complete and submit our nominations?

We posed this question to the Company, and its counsel advised us that the window for nominating candidates ran from April 12 through May 12, 2024 and that we had failed to submit a complete set of documents within that timeframe. In counsel’s words, we failed to satisfy “all of the informational and procedural requirements specified in the By-Laws.”

Let’s unpack that.

• We contacted the Company in time to submit a complete nomination package within the Company now claims was the April 12-May 12 window for nominations.¹

• On April 24 – 12 days after this 30-day window for nominations supposedly opened -- CEO Mobley wrote to us stating that the materials for the 2024 meeting “have not yet been finalized” and that the questionnaire “will be forwarded to you as it becomes available.”

• CEO Mobley never sent us the questionnaire. It was only after the supposed May 12 deadline that the Company told us that we were too late.

Question: How could we – or any shareholder, for that matter – submit a timely nomination if the necessary paperwork is not made available in time for nominations to be submitted?

In effect, CEO Mobley’s refusal to follow through on his written commitment prevented us from submitting an alternative director slate for your consideration at this year’s meeting. That omission turned what could have been a contested election into an uncontested election that will entrench CEO Mobley and two incumbent directors for at least another year.

Is this how you believe that the board of directors should be running the Company?

We asked the Company to postpone the upcoming meeting so that nominations could be submitted and shareholders could have the opportunity to consider a competing slate of directors. The Company has refused to do so.

Thank you for your consideration of these points.

Very truly yours,

BT Brands, Inc.
Kenneth W. Brimmer, Chairman and
Chief Financial Officer
Gary Copperud, Chief Executive Officer
and Director

THE FOREGOING INFORMATION MAY BE DISSEMINATED TO SHAREHOLDERS VIA TELEPHONE, U.S. MAIL, E-MAIL, CERTAIN WEBSITES, AND CERTAIN SOCIAL MEDIA VENUES, AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE OR AS A SOLICITATION OF AUTHORITY TO VOTE YOUR PROXY.

¹ The Company’s after-the-fact claim of a May 12 deadline is dubious, given that there was no quorum for the supposed 2023 meeting, and no business was transacted. The bylaws indicate that if no meeting is held, the deadline for nominations is 10 days after the public announcement of the date of the next meeting. The Company made no such public announcement prior to publication of the Company’s proxy materials on August 7.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240816786705/en/

Kenneth Brimmer, 612-229-8811

Source: BT Brands, Inc.

FAQ

When is Noble Roman's upcoming shareholder meeting that BTBD is addressing?

The upcoming Noble Roman's shareholder meeting is scheduled for August 27, 2024.

What action is BT Brands (BTBD) urging Noble Roman's shareholders to take?

BT Brands is urging Noble Roman's shareholders to withhold their support for director candidates at the upcoming shareholder meeting.

Why couldn't BT Brands (BTBD) nominate their own slate of directors for Noble Roman's board?

BT Brands claims they were unable to nominate their slate because Noble Roman's CEO failed to provide the necessary nomination materials within the required timeframe, despite promising to do so.

How many shares of Noble Roman's does BT Brands (BTBD) own?

BT Brands, along with its executives Kenneth W. Brimmer and Gary Copperud, owns approximately 1.56 million shares of Noble Roman's common stock.