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Through December 31, 2015, the Securities reported as beneficially owned in Item 5 were purchased in the ordinary course of business for investment purposes by NBBD and NB Management, each in its capacity as an RIA on behalf of its respective investment advisory clients. As of January 1, 2016, NBIA made purchases for Mutual Funds and Institutions and NBBD continued to make purchases for its private investor clients. NBBD also purchased 200 shares for its own account. On August 4, 2015, NB Management, on behalf of certain of its affiliates and itself, sent a letter (the “First Letter”) to Arthur Zafiropoulo, the Issuer’s Chairman, Chief Executive Officer and President (copies of which were also sent to each of the Issuer’s directors) regarding the Issuer’s failure to create shareholder value, certain compensation practices with respect to the Issuer’s stock plans, significant dilution of shareholders and what appears to be a lack of alignment of the Issuer’s management with its shareholders. (The Foregoing description of the First Letter is qualified in its entirety by reference to the full text of the First Letter, a copy of which is attached to the Original Schedule 13D.) After the First Letter was sent, NB Management had a meeting with Mr. Zafiropoulo and Rick Timmins, the lead independent director of the Issuer. On September 28, 2015, NB Management sent another letter (the “Second Letter”) to Mr. Zafiropoulo reiterating its concerns and noting the lack of urgency by the Board in addressing the First Letter. (The foregoing description of the Second Letter is qualified in its entirety by reference to the full text of the Second Letter, a copy of which is attached to Amendment 1 to the Original Schedule 13D as filed on October 1, 2015 (“Amendment 1”)). NBIA had a second meeting with Mr. Zafiropoulo in January 2016. In a press release disseminated on February 4, 2016, the Issuer announced its results for fiscal year 2015, and stated that it was in the process of identifying candidates to replace one or more members of or to augment its Board of Directors. On March 4, 2016, NBIA sent a letter to Mr. Zafiropoulo and Mr. Timmins (the “Third Letter”) stating its continued concerns regarding governance and the Board’s ability to address other matters the Issuer faces. (The foregoing description of the Third Letter is qualified in its entirety by reference to the full text of the Third Letter, a copy of which is attached to Amendment 2 to the Original Schedule 13D as filed on March 9, 2016 (“Amendment 2”)). Moreover, in the Third Letter NBIA provided the names and biographies of two potential director candidates who, in its opinion, each has multiple qualifications that would strengthen the Issuer’s Board.
On April 22, 2016, NBBD submitted a nomination notice to the Issuer (“Nomination Notice”) nominating two individuals, Dr. Ronald Black and Ms. Beatriz V. Infante (the “Nominees”) (the biographies of whom are attached to the Third Letter) for election to the Issuer’s Board of Directors at the 2016 annual meeting of the stockholders of the Issuer (“Annual Meeting”). The Nomination Notice discloses the Reporting Person’s intent to solicit proxies from the stockholders of the Issuer to elect the Nominees. (The foregoing description of the Nomination Notice is qualified in its entirety by reference to the full text of the Nomination Notice, a copy of which is attached to Amendment 3 to the Original Schedule 13D as filed on April 22, 2013 (“Amendment 3”).)
Notwithstanding the Issuer’s proxy statement indicating that Joel Gemunder will not stand for reelection as a director and Paramesh Gopi will be seeking election in his place, the Reporting Persons still believe that the Issuer will be best served if their candidates, Ms. Beatriz Infante and Dr. Ronald Black, are elected as members of the Issuer’s board of directors. Therefore, on June 13, 2016, the Reporting Persons filed a definitive proxy statement in connection with the solicitation of proxies from stockholders of the Issuer for the election of Ms. Infante and Dr. Black (the “Solicitation”).
On June 13, 2016, the Reporting Persons issued a press release relating to the Solicitation (the “Initial Press Release”), disseminated a letter to stockholders relating to the Solicitation (the “Initial Letter”) and made a web site available to the public with respect to the Solicitation (the “Web Site”). Copies of the Initial Press Release, Initial Letter and the Web Site contents were filed with the SEC as Additional Solicitation Materials and are respectively referred to in Item 7 as Exhibits 99.11, 99.12 and 99.13 hereto and incorporated herein by reference.
The Reporting Persons communicated with other stockholders of the Issuer in connection with their solicitation of proxies for use at the Issuer's 2016 Annual Meeting of Stockholders. Although the Reporting Persons took actions that would be deemed as having the purpose or effect of changing or influencing control of the Issuer, none of the Reporting Persons sought control of the Issuer or to participate in the day-to-day management of the Issuer. Depending on future market conditions, NBIA, in its capacity as an RIA, may purchase or sell additional Securities on behalf of its investment advisory clients; and, Messrs. Nahum. Solomon and McAree also may purchase or sell additional Securities for their personal accounts.
On June 19, 2016, the Reporting Persons issued a press release ( a copy of which is annexed hereto as Exhibit 99.27) announcing that based on the preliminary vote count provided by their proxy solicitor following the Issuer’s 2016 Annual Meeting of Stockholders, the Issuer’s Stockholders elected the Reporting Persons’ two nominees, Dr. Ronald Black and Ms. Beatriz V. Infante.
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