Online Resources, Tennenbaum seeks support for their nominees on May 6

By Lisa Kerner

Charlotte, N.C., April 24 - Glass, Lewis & Co. recommended that Online Resources Corp. shareholders re-elect three members of the company's board at the annual meeting on May 6, Online Resources said.

According to Online Resources, the proxy advisory firm recommended against the full slate of nominees put forth by Tennenbaum Capital Partners.

Online Resources said that Glass Lewis stated, "We believe the current board members have the appropriate background and independence to oversee the executive team going forward and that the participation of additional dissident nominees on the board is unwarranted at this time."

In addition, Glass Lewis said that "the dissident's plan to pursue a sale of the company is particularly limited and further, the plan does not address any operating plans for the business in the event a strategic agreement is not completed," according to an Online Resources news release.

Shareholder reacts

Tennenbaum Capital Partners said it was disappointed by Glass Lewis' recommendation.

"In addition to not taking the time to meet with us or our independent nominees, Glass Lewis' report recites management's script without a critical eye and misrepresents our views and that of our nominees," Tennenbaum said in an open letter to Online Resources shareholders on Friday.

"If a sale of the company [Online Resources] was our primary objective, I can assure you that we would have not invested our time and our money in this proxy contest, nor would we have selected a slate of nominees whose experiences are grounded in rolling up their sleeves to create value out of technology services businesses," Tennenbaum managing partner Michael Leitner said in the letter.

Tennenbaum asked Online Resources shareholders to support its nominees at the annual meeting.

Other firms differ

As previously reported, Proxy Governance, Inc. and RiskMetrics Group/ISS recommended that Online Resources shareholders vote in favor of Tennenbaum's director nominees.

Proxy Governance recommended that shareholders vote for all of Tennenbaum's nominees, and RiskMetrics recommended in favor of John Dorman and Edward D. Horowitz, Tennenbaum said.

In February, Tennenbaum affiliate Special Value Opportunities Fund, LLC announced it will nominate Dorman, former chairman, president and chief executive officer of Digital Insight Corp.; Horowitz, former president and CEO of SES Americom; and Bruce A. Jaffe, former corporate vice president of Microsoft Corp.

Special Value Opportunities Fund said the nominations are in reaction to the failure of Online Resources' board to consider the shareholder's suggestions, which included splitting the roles of chairman and CEO and reviewing strategic alternatives.

Online Resources is a Chantilly, Va.-based web-based financial services company.

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