IT Staffing Report: Nov. 1, 2018


TSR investor to nominate board candidates

Zeff Capital LP, which last year sought to acquire all the shares in IT staffing provider TSR Inc. (NASD: TSR), on Oct. 10 notified the company that it intends to nominate two independent director candidates for election to TSR’s board at the 2018 annual meeting of stockholders on Nov. 28: Tim Eriksen and Brad Tirpak.

It’s time to reconstitute the board and reverse the “legacy of failed decisions” by the current board and management, said Daniel Zeff, president and managing member of Zeff Capital.

“From enriching management, to adopting an onerous poison pill, to eliminating the right of stockholders to call special meetings, the board’s actions represent an overt attack on stockholders and stockholder value, and show a disregard for corporate governance,” Zeff said. “TSR’s board must stop acting in its own interests and begin to show respect to stockholders — the true owners of TSR.”

Zeff Capital said it also intends to present a stockholder proposal at the annual meeting related to the elimination of TSR’s classified board, as well as two stockholder proposals relating to TSR’s bylaws.

The investor in July upped its stake in the company by purchasing the shares held by TSR Founder Joseph Hughes and his wife, Winifred. Zeff Capital now says it is the largest stockholder of TSR, with beneficial ownership of more than 22% of the outstanding common stock.

Subsequently, TSR in August adopted a stockholder rights agreement, sometimes referred to as a “poison pill,” to thwart a potential hostile takeover. The plan takes effect if a person or group acquires more than 5% of TSR shares in a transaction not approved by TSR’s board.

Eriksen is the founder and president of Lynden, Wash.-based investment advisory firm Eriksen Capital Management. He is also CEO, CFO and a director of Solitron Devices Inc., which provides solid-state semiconductor components and related devices primarily for the military and aerospace markets. Since April 2018, Eriksen has been a director of Novation Companies Inc., which owns outsourced healthcare staffing provider Healthcare Staffing Inc.

Tirpak is managing partner of investment company Palm Ventures. He is also a director of Full House Resorts Inc., a casino developer and operator; Flowgroup plc, formerly an energy supplier; and Birner Dental Management Services Inc., a manager of dental practice networks. From 2009 to 2016, Tirpak was founder and CEO of Locke Partners and managed various investment partnerships focused on engaging public companies to improve corporate governance and improve stockholder returns.


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