Online Resources disagrees with RiskMetrics' analysis of dissident slate

By Lisa Kerner

Charlotte, N.C., April 13 - Online Resources Corp. said it was disappointed in RiskMetrics Group's recommendation that the company's shareholders vote in favor of two of three board nominees put forth by Tennenbaum Capital Partners.

RiskMetrics' analysis was "inconsistent and incomplete" as well as "superficial," according to Online Resources.

"After rating the company's governance practices very highly just last month, now RMG [RiskMetrics Group] implies that our board's business judgment, nominating process and openness to the views of a minority director are flawed," Online Resources lead independent director and chairman of the governance committee Michael H. Heath said in a company news release.

RiskMetrics said in its March 1 report that Online Resources' corporate governance quotient was better than 92% of Russell 3000 companies and 91% of software and services firms, according to Online Resources.

Online Resources chairman and chief executive officer Matthew P. Lawlor said RiskMetrics "side-stepped Tennenbaum's clear conflict of interest" created by Tennenbaum's preferred stock position in the company.

"Tennenbaum's economic interests are at odds with those of common shareholders, which is at the very heart of this unnecessary proxy contest," Lawlor said.

Lawlor believes RiskMetrics "simply regurgitated Tennenbaum's over-statements of the qualifications of its nominees."

In February, Tennenbaum announced it was nominating three candidates for election to Online Resources' board at the company's 2009 annual meeting of stockholders on May 6. At the time, Tennenbaum had a 21.9% stake in the Chantilly, Va.-based web-based financial services company.

As previously reported, the candidates are John Dorman, former chairman, president and CEO of Digital Insight Corp.; Edward D. Horowitz, former president and CEO of SES Americom; and Bruce A. Jaffe, former corporate vice president of Microsoft Corp.

Tennenbaum said Online Resources failed to consider its suggestions, which included splitting the roles of chairman and CEO and reviewing strategic alternatives.

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