Barnhill Receives Requisite Number of Written Consents to Refresh TESSCO Board and Amend Bylaws

Rhea-AI Summary

On December 11, 2020, Robert B. Barnhill, Jr. confirmed receiving written consents from over 67% of TESSCO Technologies' shareholders to remove John D. Beletic, Cathy-Ann Martine-Dolecki, and Ronald D. McCray from the Board of Directors. Additionally, the consents allow for reducing the threshold required to call a special shareholder meeting from 50% to 25%. Barnhill expressed shareholder dissatisfaction with existing members and emphasized the importance of board refreshment to restore company success. Expected changes include considerations for new directors Emily Kellum Boss and John W. Diercksen.

Positive

• Majority shareholder support (67%) for board changes indicates strong demand for governance reform.
• The ability to call special shareholder meetings with only 25% of votes enhances shareholder influence.
• Potential new board members, Emily Kellum Boss and John W. Diercksen, received significant support, suggesting a positive outlook for future governance.

Negative

• Significant shareholder dissatisfaction with existing board members could indicate deeper issues within governance.
• Refusal by the board to allow shareholders with 5% ownership to nominate directors demonstrates a lack of transparency.

HUNT VALLEY, Md., Dec. 14, 2020 /PRNewswire/ -- Robert B. Barnhill, Jr. (together with the other participants of the consent solicitation, the "Barnhill Participants"), one of the largest stockholders of TESSCO Technologies Incorporated (the "Company" or "TESSCO") (NASDAQ:  TESS), delivered written consents to the Company on December 11, 2020 from the holders of at least 67% of the Company's outstanding common stock to remove John D. Beletic, Cathy-Ann Martine-Dolecki and Ronald D. McCray from the Board of Directors (the "Board") and to elect J. Timothy Bryan and Kathleen McLean as directors.  The Barnhill Participants also delivered written consents from the holders of at least 67 % of the Company's outstanding common stock to reduce the percentage of shareholders that may cause the Company to call a special meeting of shareholders to holders of 25% of the votes outstanding and entitled to vote at a special meeting (which was the standard before the other Board members attempted to further entrenched themselves by amending the Bylaws without shareholder approval to increase the threshold to 50%).  Under Delaware law, the changes to the Board and Bylaws take effect immediately upon the delivery of the requisite number of consents.

"I am grateful that the shareholders have supported this critical first step in putting TESSCO back on the path to success and I look forward continuing to advocate for a fully-reconstituted Board," noted Mr. Barnhill.

The consents collected by the Barnhill Participants also indicate overwhelming shareholder dissatisfaction with existing Board members Jay G. Baitler, Paul J. Gaffney and Morton F. Zifferer.

• Holders of over 48.5% of the Company's outstanding shares or more than 59.4% of shares voted at the Company's 2020 annual meeting, consented to remove Jay G. Baitler;
• Holders of over 47.8% of the Company's outstanding shares or more than 58.6% of shares voted at the Company's 2020 annual meeting, consented to remove Paul J. Gaffney; and
• Holders of over 47.8% of the Company's outstanding shares or more than 58.6% of shares voted at the Company's 2020 annual meeting, consented to remove Morton F. Zifferer. 

The Company announced in November that Mr. Zifferer would be resigning from the Board upon the completion of Mr. Barnhill's consent solicitation.  We assume that his resignation is now effective and, given the significant shareholder opposition to them remaining on the Board, Mr. Barnhill encourages Mr. Baitler and Mr. Gaffney to follow Mr. Zifferer's example and resign to make way for a fully reconstituted Board. If Mr. Baitler and Mr. Gaffney do not resign, Mr. Barnhill expects that they will face similar opposition at the Company's 2021 annual meeting.

Mr. Barnhill continues to believe that Emily Kellum (Kelly) Boss and John W. Diercksen would be invaluable additions to the Board and both received substantial shareholder support in the consent solicitation. 

• Mr. Barnhill collected written consents from holders of over 48.5% of the Company's outstanding shares, or more than 59.5% of shares voted at the Company's 2020 annual meeting, for the election of Ms. Boss; and
• Mr. Barnhill collected written consents from holders of over 47.7% of the Company's outstanding shares, or more than 58.5% of shares voted at the Company's 2020 annual meeting, for the election of Mr. Dierksen.

Mr. Barnhill believes that any further Board refreshment should consider the strong support already voiced by shareholders for these two highly qualified, independent nominees.

Mr. Barnhill is disappointed that the Board has refused Mr. Barnhill's proposed concept of shareholders owning 5% or more of the Company's outstanding common stock being able to designate up to two individuals for election to the Board. In Mr. Barnhill's estimation this is just another example of the Board substituting its judgement for that of the shareholders and ignoring repeated calls for greater transparency. It is for these reasons that Mr. Barnhill expects to continue to advocate for greater shareholder representation on the Board and a will continue to pursue a fully reconstituted Board.

Mr. Barnhill expects that, in light of the changes to the composition of the Board, a meeting of the reconstituted Board will be held promptly to consider these matters and before the Company takes any action outside the ordinary course of business or any material decision with respect to the Company, its operations, its governance structures, or its personnel is made.

Venable LLP is serving as legal counsel to Mr. Barnhill.

Investor/Media Contacts:

Harkins Kovler, LLC
Peter Harkins, Jr. / Rahsaan Wareham
(212) 468-5394 / (212) 468-5399
pcharkins@harkinskovler.com / rwareham@harkinskovler.com

 

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SOURCE Mr. Robert B. Barnhill, Jr.

FAQ

What changes were made to TESSCO's Board of Directors on December 11, 2020?

On December 11, 2020, shareholders consented to remove several directors and introduce new nominees, reflecting significant dissatisfaction with the existing board.

How much shareholder support was required to make changes to TESSCO's Board?

A minimum of 67% of TESSCO's shareholders provided written consents to effectuate the board changes.

What amendments were made regarding special shareholder meetings at TESSCO?

The percentage of shareholders required to call a special meeting was reduced from 50% to 25%.

Who are the newly proposed directors for TESSCO's Board?

Emily Kellum Boss and John W. Diercksen are proposed as new directors, having received substantial shareholder support.

What concerns were raised regarding existing board members at TESSCO?

Shareholder dissatisfaction was expressed towards existing members, prompting calls for their resignation.