* Starboard plans to file its slate of directors 'promptly'
* Wants AOL to give all of patent proceeds to shareholders
* Concerned about Patch and display ad business
* AOL shares down 3 percent
April 10 Starboard Value is not satisfied with AOL's $1 billion deal to sell the majority of patents to Microsoft Corp and plans to press forward with its slate of nominees for the company's board, the activist investment fund said.
In a letter to the AOL Inc board released on Tuesday, Starboard said that while it was pleased with the patent sale, it did not address "serious concerns" with AOL's "poor operating performance."
Starboard, which with a 5.3 percent stake in the Internet company is one of its largest shareholders, has been agitating for a shakeup. One of the paths it wanted AOL to pursue was an auction of its patents.
On Monday, AOL said it was selling the majority of its patents to Microsoft for $1 billion and that it would return a "significant portion" to shareholders.
Starboard said AOL should return all the proceeds to its shareholders.
A representative from AOL was not immediately available to comment.
"We remain concerned that shareholder capital will continue to be used for poorly conceived acquisitions and investments into money-losing initiatives," according to the letter.
Starboard singled out Patch, a group of community news websites, and AOL's splashy display ad business.
The investment fund said that it was planning to "promptly" file preliminary proxy materials for its board slate.
Shares of AOL, which jumped more than 40 percent on Monday after the patent sale announcement, were down 3 percent at $25.62 in morning trading on Tuesday.