Destination Maternity calls on stockholders to vote against dissident director nominees
Maternity apparel company Destination Maternity Corporation has sent a letter to its stockholders ahead of its annual meeting, urging them to vote for the company’s incumbent Board of Directors in opposition to the nominees of a dissident group of stockholders.
The letter encourages the company’s stockholders to send in a white proxy card in order to vote for incumbent directors Board Chairman Barry Erdos, Destination Maternity Interim CEO Melissa Payner-Gregor, Peter Longo and Pierre-André Mestre.
“At a pivotal moment in its history, Destination has the right leadership and go-forward strategy to maximize stockholder value,” reads the letter, before going on to outline a number of plans being implemented by the current Board to ensure the company’s growth.
The missive comes as a response to the nomination of a slate of new directors by a group of dissident stockholders led by Nathan G. Miller and Peter O'Malley, or the “Miller group”.
Miller’s NGM Asset Management owns 7.8% of Destination Maternity’s stock and he is pushing the company to add female directors to its Board.
The letter continues, “The Miller group wants to take control of your company and replace Destination’s entire Board of Directors with a slate of unproven and untested nominees”, further claiming that the group’s “interests are not aligned with the interests of all Destination stockholders.”
As evidence for these assertions, the piece also features a table comparing the experience of the Board’s incumbent directors, which ranges from 40 to 65 years, with that of the Miller group’s nominees, whose experience in directorial positions purportedly varies between 0 and 10 years.
The letter is the latest development in the battle over board seats at Destination Maternity. After a series of fluctuations in the number of its Board members in April, Miller accused the company of “governance shenanigans” in a regulatory filing, claiming that the changes created confusion for investors and demanding an “unequivocal statement regarding the maximum number of Board seats that are up for election.”
Erdos addressed the controversy when the company reported its Q4 2017 results at the end of the month, stating “As announced previously, our Board has been actively considering its composition including pursuing the addition of new members to expand the skills and experience on the Board to accelerate Destination Maternity's path to profitable growth.”
The company reduced losses to $10.2 million in the last quarter of 2017, compared to a loss of $32.8 million in Q4 2016, reporting a total loss of $21.6 million for the full fiscal year.
Destination Maternity’s annual meeting of stockholders will take place at the company’s Moorestown, New Jersey headquarters on Wednesday, May 23, 2018.
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