| Company: Phoenix Technologies Ltd. | | Meeting Date: 02/14/2007 |
| Company Name: Phoenix Technologies Ltd. ("Phoenix") |
| Dissidents: Starboard Value and Opportunity Master Fund on behalf of The Ramius Group ("Ramius") |
| D&O ownership: 10.2 percent |
| Dissident ownership: 13.7 percent |
| Stakes: Dissidents seek 2 seats on a 6 member board. The company has a staggered board with 2 members up for election in the forth coming meeting. |
| Dissident's concerns: a) Phoenix should not remain a public company; b) the current board has not been able to create shareholder value; c) greater oversight of the management is needed; d) the company has poor corporate governance practices; e) the two management nominees oversaw and 'rubber-stamped' the prior management's failed execution; f) the management nominees have not purchased shares in the company over the last 5 years; and g) Chairman Drury is not independent as defined by the exchange rules. |
| Dissident's plan: The dissidents believe that the company needs greater oversight for the management’s plan, particularly with respect to acquisitions, new product development and overall strategy. Moreover, they contend that the current board failed to provide such oversight of the previous management resulting in significant shareholder loss. Furthermore, dissidents contend that their nominees’ extensive industry experience would enable them to provide management with guidance and proper oversight. |
| Management's platform: a) if the dissident nominees are elected, they would pursue the sale of Phoenix to an affiliate of the Ramius Group; b) the dissident nominees have not presented a strategic plan or suggestions to improve the company's performance; c) the dissident nominees have not disagreed with or opposed the strategic plan adopted by the current management; d) the new management team's strategic plan is yielding results as indicated by financial results for 1QFY2007; e) the strategic plan of the new management team has resulted in a 24 percent increase in stock price from the time Woody Hobbs joined the company until Jan. 29, 2007; and f) the board has been revamped with half of the members appointed over last two years. |
| Management's plan: To continue with the current strategic plan. |
| Solicitation costs/reimbursement: The Ramius Group total proxy solicitation costs to be approx. $175,000 of which approx. $75,000 had been incurred until the date of the definitive proxy filing. |
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| ISS Recommendation: We recommend shareholders vote the BLUE proxy card and vote FOR the election of Taher Elgamal and David Drury. | |
| Company: Cyberonics, Inc. | | Meeting Date: 02/01/2007 |
| Company Name: Cyberonics, Inc. ("Cyberonics") |
| Dissidents: Metropolitan Capital Advisor group ("MCA") |
| D&O ownership:10.6 percent |
| Dissident ownership: 7.3 percent |
| Stakes: Three seats on an eight member board |
| Dissident's concerns: Poor corporate governance, appointment of a perpetual director, failure to deliver on forecasts and promises, and improper option grant practices. |
| Dissident's plan: To provide additional oversight to improve corporate governance and industry expertise. |
| Management's platform: Management has improved corporate governance, and the company is well-positioned for growth. |
| Management's plan: Obtaining approval of insurance payers to cover medical expenses related to treatment using the company's device implant. |
| Solicitation costs/reimbursement: MCA estimates total solicitation costs to be $500,000 of which approximately $100,000 had been incurred as of the proxy filing date. If successful, MCA will seek reimbursement from Cyberonics for solicitation expenses without submitting such reimbursement to a vote of shareholders. |
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| ISS Recommendation: ISS recommends that shareholders vote on the Dissident GOLD Proxy Card. We recommend a vote FOR Jeffrey E. Schwarz and Arthur J. Rosenthal, and WITHHOLD from Alfred J. Novak. | |
| Company: Competitive Technologies, Inc. | | Meeting Date: 01/16/2007 |
| Company Name: Competitive Technologies Inc. |
| Dissidents: Committee to Restore Stockholder Value |
| D&O ownership: 6.3% |
| Dissident ownership: Less than 1% |
| Stakes: Full board |
| Dissident's concerns: The dissident group's major concern is the company's performance after John B. Nano was terminated as CEO (63 percent decline in revenues and an approximately 70 percent decline in the stock price) |
| Dissident's plan: To continue to focus on the core strategy for the attractive, high return on investment, licensing business model. In addition, they will target and exploit commercialization opportunities that offer accelerated growth though strategic partnerships and relationships. |
| Management's platform: The company's good performance under Mr. Nano was attributable to non-recurring items originated in lawsuits initiated many years prior to Mr. Nano taking over the CEO position. Revenues decreased after Mr. Nano was terminated because of his inability to add new technologies and diversify the revenue base of the company. |
| Management's plan: Management’s strategic plan is designed to broaden the company’s revenue base, increase recurring revenues and lower its dependence on a single "home-run" technology. |
| Solicitation costs/reimbursement: The dissident group estimates its total solicitation costs to be approximately $50,000, of which $25,000 have already been incurred. The dissident group will seek reimbursement from the company. The company estimates its total solicitation costs to be approximately $150,000-200,000, of which $30,000 have already been incurred. |
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| ISS Recommendation: We recommend shareholders support dissident nominees John B. Nano and Ben Marcovitch. | |
| Company: Far East Energy Corp. | | Meeting Date: 12/15/2006 |
| Company Name: Far East Energy Corp. (Far East) |
| Dissidents: Sofaer Capital Inc. and certain affiliates (Sofaer) |
| D&O ownership: Approximately 7 percent |
| Dissident ownership: Approximately 14 percent |
| Stakes: Four out of six board seats (66 percent) |
| Dissident's concerns: (1) Far East’s stock price has underperformed compared to relevant indices and the stock prices of competitors, as demonstrated by the performance graph data in the company's proxy statement, (2) the belief that the drilling, dewatering, and entry into production of the company’s wells is not proceeding as quickly as it could, based on continuing delays revealed in the company’s press releases, (3) poor corporate governance, (4) current management does not have sufficient equity participation in the company to align its interests with shareholders' interests, and (5) the current board has diluted the interests of current shareholders through its recent stock issuances, which Sofaer believes are an attempt to entrench itself and management |
| Dissident's plan: (1) Link financing activities to the achievement of corporate milestones to avoid value dilution, (2) take a staged approach to operations and finance in order to focus the majority of corporate resources on achieving commercial operations in the most promising areas before development expenditure elsewhere, (3) look to form partnerships in marketing, oil services, operations, and infrastructure to enable risk sharing, access to resources, and ability to quickly scale the business strategy, (4) form a two-year budget plan that will be used to monitor performance of the company, (5) increase the company’s presence in Asia to improve execution by management as well as visibility with potential partners and investors, (6) amend charter and bylaw provisions to improve shareholder rights, (7) improve communication and information flow to existing and potential investors, (8) improve corporate accountability and align management’s interests with those of shareholders, (9) reduce legal and professional costs, (10) review all facets of SG&A costs, (11) engage banks and financial advisers with specialist industry expertise, (12) raise the profile of the company to encourage coverage of the company’s stock by oil and gas analysts, and (13) market future fundraising in Europe and Asia as well as the United States and implement a coordinated global investor relations strategy |
| Management's platform: The continuity of a highly qualified and energy-industry experienced board and management team with deep roots and relationships in China should not be jeopardized at a time when the company appears to be on the cusp of making its high permeability resource work to its advantage and of maximizing any production at the earliest possible date. The company states it has discovered what it believes is an area of high gas content coupled with high permeability. The company is nearing completion of the fourth horizontal well which it started drilling earlier this fall. The company has the funds to drill additional wells in the No. 1 Shouyang area, its first horizontal well in the Qinnan Block, and one obligation well in the Yunnan province. The concentration of wells at the Shouyang No. 1 area is designed to capitalize as quickly as possible on the strong potential of what the company believes to be the rare combination of high gas content and high permeability discovered in its first wells. |
| Management's plan: Implement a well-conceived and complex drilling, production, and gas marketing program designed to capitalize on what it believes is the discovery of an area of high gas content coupled with high permeability |
| Solicitation costs/reimbursement: Dissident has spent $182,000 to date (estimates to spend up to $625,000) and seeks reimbursement from the company. Far East has spent $188,000 to date (estimates to spend up to $875,000). |
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| ISS Recommendation: ISS recommends a vote FOR dissident nominees Tim Whyte and John Laurie Hunter on the dissident GOLD card and a Do Note Vote on management's White Card | |
| Company: Gyrodyne Co. Of America, Inc. | | Meeting Date: 12/07/2006 |
| Company Name: Gyrodyne Co. of America, Inc. |
| Dissidents: Full Value Partners |
| D&O ownership: 13.7 percent |
| Dissident ownership: 17.6 percent |
| Stakes: Three board seats in an eight member board |
| Dissident's concerns: The company is not moving in the direction of generating a liquidity event in a reasonable period of time |
| Dissident's plan: Maximize shareholder value; eliminate poison pill |
| Management's platform: The company is moving in the direction stated in its strategic plan, and the recent acquisition of 10 buildings is consistent with that plan |
| Management's plan: Convert to a REIT and create one or more liquidity events in an orderly liquidation and tax efficient manner |
| Solicitation costs/reimbursement: The dissident estimates its solicitation expenses to be $10,000, for which it will seek reimbursement from the company. The company estimates it will pay $7,500 to its proxy solicitation firm. |
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| ISS Recommendation: Vote for management nominees | |
| Company: Rural/Metro Corporation | | Meeting Date: 12/01/2006 |
| Company Name: Rural/Metro Corp. |
| Dissidents: Accipiter Life Sciences Fund, LP and its affiliates ("Accipiter") |
| D&O ownership: 3.9 percent |
| Dissident ownership: 7.7 percent |
| Stakes: Two seats on a seven-member board |
| Dissident's concerns: Lack of financial guidance and and overhang from a potential equity offering led to the company's stagnant stock price; the board's lack of accountability and sub-standard governance practices |
| Dissident's plan: Improve the company’s relationship with its stockholders and implement corporate governance reform while exploring strategic alternatives. |
| Management's platform: Strong record of financial and operating performance; management has the right plan to continue increasing shareholder value; management's nominees are experienced, independent directors |
| Management's plan: Continue to grow the medical transportation business, focus on deleveraging the enterprise, and improve governance. |
| Solicitation costs/reimbursement: The dissident's cost of solicitation is estimated to be approximately $250,000. The dissident does not intend to seek reimbursement from the company of expenses incurred in connection with this solicitation. Management's cost of solicitation is estimated to be approximately $400,000. |
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| ISS Recommendation: We recommend that shareholders vote the WHITE CARD and vote FOR management's nominees. | |
| Company: Wheeling-Pittsburgh Corporation | | Meeting Date: 11/17/2006 |
| Company Name: Wheeling-Pittsburgh Corporation ("WP") |
| Dissidents: Esmark Incorporated. ("Esmark") |
| D&O ownership: less than 1 percent |
| Dissident ownership: N/A |
| Stakes: 9 seats on a 11 member board |
| Dissident's concerns: The company suffers from a) poor financial performance; b) ongoing operational and legal problems; c) high cost production; and a d) weak capital structure |
| Dissident's plan: Dissident's want to replace the management nominees on the board. The new proposed board would then consider merging WP with Esmark, subject to shareholder approval. By merging WP with Esmark, a) the combined company is expected to benefit from Esmark's strong service center/low cost distribution platform; b) Esmark's slab supply agreement (contingent upon merger of the two companies) would help lower production costs and improve operating margins; and c) the proposed rights issue would strengthen the balance sheet by reducing leverage. |
| Management's platform: Management contends that a) dissident's don't have a clear investment strategy and have provided no indication of the future profitability of the combined company; b) dissident's claim that their proposed management team will be able to lower costs and improve profitability is unsupported; c) dissident's don't have relevant experience in managing a steel manufacturing facility; and d) successorship language in United Steel Workers (USW) agreement will not be applied to the CSN transaction |
| Management's plan: Management has signed an asset purchase agreement with CSN, whereby CSN would acquire 49.5 percent stake in WP in exchange for the sale of its U.S assets to the company. CSN would also invest $225 million in convertible debt (which could potentially increase their stake to 64 percent). Pursuant to the CSN asset purchase agreement, a) the company would also have access to a ten-year slab supply agreement, which is expected to help lower the operating costs; b) will get exclusive distribution rights for CSN's flat-rolled steel products in U.S and Canada; and c) will be able to invest $150 million for transformative capital improvements from the issuance of $225 million of convertible debt to CSN |
| Solicitation costs/reimbursement: Esmark estimates proxy solicitation expenses to be $1.2 million, of which approximately $0.7 million has been incurred to date. If its nominees are selected to the board, Esmark intends to seek reimbursement of proxy solicitation expense from WP and does not intend to submit such reimbursement to shareholder approval. WP estimates proxy solicitation expense to be $0.65 million (including $0.2 million for solicitation of annual meeting). To date, the company has incurred approximately $0.13 million of total proxy solicitation costs. |
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| ISS Recommendation: We recommend shareholders vote in favor of Esmark's slate and vote FOR on the WHITE proxy card | |
| Company: Energy Partners, Ltd | | Meeting Date: 11/17/2006 |
| Company Name: Energy Partners, Ltd. (EPL) |
| Dissidents: Woodside Petroleum, Ltd. (Woodside) |
| D&O ownership: 9.3 percent |
| Dissident ownership: 4.5 percent |
| Stakes: All board seats |
| Dissident's concerns: The board is not acting in the best interest of shareholders by rejecting Woodside's offer to acquire the company. |
| Dissident's plan: To remove the current board and replace it by its own nominees. The election of Woodside's nominees would signal that shareholders favor the board taking such actions to facilitate the consummation of Woodside's offer. |
| Management's platform: 1) the continued execution of the company’s business plan provides greater value to shareholders than the Woodside offer; 2) Woodside's offer is substantially below the fair value for the company; 3) Woodside’s hand-picked nominees would have conflicts of interest which can only be detrimental to the interests of EPL and its shareholders. |
| Management's plan: Conducting an auction process to sell the company. |
| Solicitation costs/reimbursement: Woodside has agreed to pay Innisfree M&A Inc. $300,000 in addition to a monthly retainer of $30,000. Woodside is not looking for reimbursement of these costs. |
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| ISS Recommendation: ISS recommends voting against the removal of current directors (Management's White Card). | |
| Company: Bradley Pharmaceuticals, Inc. | | Meeting Date: 10/26/2006 |
| Company Name: Bradley Pharmaceuticals Inc. ("Bradley") |
| Dissidents: Costa Brava Partnership III L.P. ("Costa Brava") |
| D&O ownership: 12.8 percent of common stock and 100 percent of Class B shares |
| Dissident ownership: 9.7 percent |
| Stakes: Dissident seek 3 seats on the 8 member board |
| Dissident's concerns: the company has poor corporate governance practice, disappointing stock performance and compensation issues |
| Dissident's plan: 1) Improve corporate governance through three director nominees; 2) implement a policy of "sales transparency" with respect to financial statements; and 3) create a strategic review committee |
| Management's platform: 1) the company has strong financial performance; 2) the company’s share price has significantly outperformed its peers; 3) the management is developing a robust product offering; 4) the company has taken steps to enhance shareholder value; and 5) dissident’s nominees don’t have the required experience |
| Management's plan: 1) Increase focus on research and development activities and expand product offerings; 2) strengthen financial profile; 3) implement a cost reduction program; 4) explore alternatives for improving shareholder value and communication of the strategic plan; and 5) focus on operations by improving sales force performance |
| Solicitation costs/reimbursement: Costa Brava estimates total solicitation cost to be $0.85 million of which approximately $0.55 million had been incurred as of the proxy filing date. Costa Brava is seeking shareholder approval for reimbursement of proxy solicitation cost if any of its nominees are elected to be board. Bradley estimates total solicitation cost to be $1.1 million of which approximately $0.6 million had been spent by the date of the proxy filing |
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| ISS Recommendation:We recommend shareholders to vote the BLUE card. Also, we recommend a vote FOR three Proposals 1-5 | |
| Company: Tri-Continental Corp. | | Meeting Date: 09/28/2006 |
| Company Name: Tri-Continental Corporation |
| Dissidents: Western Investment Hedged Partners L.P. and its affiliates (Western Investment) |
| D&O ownership: As of June 30, 2006, all directors and officers of the Fund as a group owned beneficially less than one percent of the Fund's common stock and less than one percent of the Fund's preferred stock. |
| Dissident ownership: Western Investment currently owns 9,855,541 shares of common stock of the Fund or 9.32 percent of the outstanding common shares. |
| Stakes: Three seats on the Fund's nine member board. |
| Dissident's concerns: the Fund’s stock has underperformed the market on a long-term basis resulting in the Fund’s share price trading at a persistent double-digit discount to net asset value (NAV). |
| Dissident's plan: If elected, Western Investment's director nominees would urge the Fund to immediately take certain actions to reduce or close the Fund's discount to NAV. |
| Management's platform: Believes the actions proposed by Western Investment could only be undertaken at significant expense to the Fund's shareholders, and would ultimately lead to termination of the Fund. |
| Management's plan: Conduct open market purchases when the Fund's discount to NAV exceeds ten percent. Monitor the Fund's discount to NAV. |
| Solicitation costs/reimbursement: Seeking reimbursement. |
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| ISS Recommendation: Vote FOR dissident nominees on gold proxy card. | |
| Company: Delcath System, Inc. | | Meeting Date: 09/25/2006 |
| Company Name: Delcath Systems, Inc. ("Delcath") |
| Dissidents: Laddcap Value Partners, LP ("Laddcap") |
| D&O ownership: 15.2 percent |
| Dissident ownership: 11 percent |
| Stakes: Dissident wants to replace the entire board with it nominees |
| Dissident's concerns: The company's device potential is being compromised by lack of urgency by an inexperienced board, and by shortcomings in corporate governance and management oversight |
| Dissident's plan: 1) Replace existing board with its nominees; and 2) upon assuming control of the board, review a) rescinding Delcath's poison pill; b) eliminating staggered terms; and c) adopting majority voting |
| Management's platform: 1) Management has a track record in terms of stock performance; 2) dissident's plan is the same as management's current plan; 3) dissident's lack relevant experience to manage the company |
| Management's plan: 1) To complete ongoing clinical trials and initiate new studies; 2) increase communication with investors; 3) enhance corporate governance; and 4) add two new independent directors to the board |
| Solicitation costs/reimbursement: Laddcap estimates total solicitation cost to be $0.2 million of which approximately $20,000 had been incurred as of the proxy filing date. If successful, Laddcap may seek reimbursement from Delcath for solicitation expenses. If such reimbursement is sought, Laddcap will submit the request for a vote of Delcath's board. Delcath estimates total solicitation cost to be $0.8 million of which $0.3 million had been spent by the date of the proxy filing |
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| ISS Recommendation: We recommend shareholders to vote the BLUE card. As this is a written consent, we recommend a vote FOR two dissident nominees and vote AGAINST removal of three management nominees | |
| Company: Motient Corporation | | Meeting Date: 07/12/2006 |
| Company Name: Motient Corporation ("Motient") |
| Dissidents: Highland Capital Management, L.P and related parties ("Highland") |
| D&O ownership: 0.8 percent |
| Dissident ownership: 14.3 percent |
| Stakes: 6 seats on a 6 member board |
| Dissident's concerns: That the management of the company or the director nominees will not maximize shareholder value, primarily due to the company's history of: a) related party transactions and conflicts of interest; b) mismanagement, lack of vision, and questionable decisions; c) financial reporting issues; and d) disappointing financial results. The dissidents also oppose Motient's 'exchange transaction' whereby the company swapped ownership of MSV in exchange for higher stake in TerreStar. |
| Dissident's plan: a) Recruit a better management team with relevant expertise; b) perform a strategic review of existing operations; c) help management successfully navigate market and regulatory challenges; d) examine possible options/opportunities for value creation; e) communicate effectively with shareholders; and f) implement strategic plan to achieve the highest and best use of Motient's unique spectrum assets. |
| Management's platform: a) Current management has achieved 'stellar' financial and operational results; b) the equity value of the company has appreciated significantly since completion of Motient's restructuring in 2002 and current management's tenure beginning in March 2003; c) the announced exchange transaction will create a more efficient and more valuable corporate structure for shareholders; and d) sale of Terrestrial Wireless Business is expected to generate material savings for Motient, which would allow the company to focus on satellite communications interests. |
| Management's plan: To focus on managing TerreStar related business |
| Solicitation costs/reimbursement: Highland estimates total solicitation cost to be $2.1 million. It believes that the expenses related to proxy solicitation should be borne by Motient and intends to seek reimbursement whether or not the proxy solicitation is successful. |
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| ISS Recommendation: We recommend shareholders support two Highland nominees. Highland did not meet our higher burden of proof criteria, in terms of having a detailed strategy for Motient, required for board control. Nonetheless, we feel that Motient has had corporate governance issues as indicated by selective stock repurchases, granting of options at below market price to board members, and related party transactions. Furthermore, we feel that management's claim of the Exchange Transaction being 'economically neutral' for shareholders is based on undisclosed valuation assumptions, and hence difficult to verify. We believe that the company would benefit from greater oversight by outside and independent directors who have a vested stake in the firm. Consequently, we recommend shareholders support two of the dissident nominees. Based on our review of dissident's slate, we believe that Mr. Maynard and Mr. Chura have strong credentials which are relevant to the company, and hence would bring valuable insight to the board. | |
| Company: SCPIE Holdings Inc. | | Meeting Date: 06/22/2006 |
| Company Name: SCPIE Holdings Inc. (SCPIE) |
| Dissidents: Stilwell Group (Stilwell) |
| D&O ownership: 9.45 percent |
| Dissident ownership: 6.6 percent |
| Stakes: Three seats on a twelve member board |
| Dissident's concerns: 1) the board is prone to make the same mistakes it made in 1998-2002 in its growth strategy, which caused significant losses to the company; at the appropriate time, the company should begin paying dividends or repurchasing stock; 2) corporate governance issues related to director accountability and compensation; 3) management's new nominees have apparently no experience at professional liability insurance companies, as compared with Stilwell's successful track record at this type of companies. |
| Dissident's plan: Focus on California professional liability insurance, while evaluating and tapping growth opportunities gradually, based on their experience at the boards of companies in similar business lines; at the time it becomes appropriate, distribute dividends; improve the board's accountability and exclude Willis King from the board; reassess director compensation and director outstanding loans with the company. |
| Management's platform: 1) Current management implemented a turnaround which reversed previous losses; 2) current corporate governance practices are in line with shareholders' best interests; 3) dissident's nominees have no particular expertise in the insurance industry |
| Management's plan: Focus on core business while managing the run off of non-core business; investing in excellent service model; improving the statutory capital surplus adequacy; building on experienced senior management. |
| Solicitation costs/reimbursement: Stilwell estimates its total expenses related to the proxy solicitation to be $70,000 of which approximately $25,000 has been incurred to date. The group is not seeking for reimbursement from the company. The company estimates its total expenses related to the proxy solicitation to be $1.2 million, of which $550,000 has already been expended. |
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| ISS Recommendation: ISS recommends a vote FOR management nominees | |
| Company: The New Germany Fund, Inc. | | Meeting Date: 06/20/2006 |
| Company Name: The New Germany Fund, Inc. |
| Dissidents: At its 2006 shareholder meeting, The New Germany Fund, Inc., faces a proxy contest initiated by Phillip Goldstein, an investment advisor to Opportunity Partners L.P., an activist- oriented private investment fund, and other clients since 1992. |
| D&O ownership: The directors and officers of the Fund own less than one percent if the Fund's shares. |
| Dissident ownership: Mr. Goldstein beneficially owns 2,092,372 shares of the Fund, of which 1,431,951 shares were bought in 2004; 278,600 shares bought and 5,000 shares sold in 2005; and 704 shares bought and 92,400 sold in 2006. |
| Stakes: Three seats on the Fund’s 11-member board. |
| Dissident's concerns: Fund shares are trading at a substantial discount to net asset value (NAV). Enable shareholders to realize NAV for their shares. |
| Dissident's plan: Mr. Goldstein intends to nominate candidates for election as directors that are committed to implementing his proposal that would attempt to enable shareholders to realize NAV for their shares. |
| Management's platform: Management believes that open-ending the Fund does not justify the risk of reduced size, potential increases in the Fund's expense ratio, and the potential adverse effect on its investment performance. |
| Management's plan: The board will monitor the discount at which the Fund shares trade by authorizing cash tender offers and increasing market awareness of the Fund. |
| Solicitation costs/reimbursement: $35,000/ Seeking reimbursement. |
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| ISS Recommendation: Vote on management's proxy card. FOR director nominees, FOR auditors, AGAINST nullifying the director qualification bylaw, AGAINST terminating the investment advisory agreement, and AGAINST recommendation that shareholders be afforded opportunity to realize NAV. | |
| Company: Arbinet-thexchange, Inc. | | Meeting Date: 06/15/2006 |
| Company Name: Arbinet-thexchange, Inc. (Arbinet) |
| Dissidents: Alex Mashinsky and Robert A. Marmon (Mashinsky and Marmon) |
| D&O ownership: 8.9 percent |
| Dissident ownership: 6.0 percent |
| Stakes: Two board seats |
| Dissident's concerns: (1) Poor stock performance, (2) management has not delivered on its goal to expand the business, (3) members of the current board are defendants in a securities fraud class action law suit, (4) lack of a pay-for-performance philosophy, and (5) current Class II directors' interests are not aligned with shareholders' interests as they do not own Arbinet stock |
| Dissident's plan: Reinvigorate the company's use and development of its technology and redirect sales and marketing efforts to other targets |
| Management's platform: (1) Board and management have made substantial progress in positioning the company for success, (2) experienced director nominees, and (3) strong corporate governance practices |
| Management's plan: Implement a number of strategic initiatives that will enable the company to improve growth by 2007 |
| Solicitation costs/reimbursement: Mashinsky and Marmon have spent approximately $145,000 to date (estimate to spend up to $600,000) and seek reimbursement from the company. Arbinet has spent approximately $250,000 to date (estimates to spend up to $750,000). |
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| ISS Recommendation: ISS recommends a vote FOR the dissident's nominees | |
| Company: Federal Trust Corp. | | Meeting Date: 05/26/2006 |
| Company Name: Federal Trust Corporation ("Federal Trust") |
| Dissidents: Keefe Managers, LLC ("Keefe") |
| D&O ownership: 22.64 percent |
| Dissident ownership: 8.7 percent |
| Stakes: One seat on a six-member board |
| Dissident's concerns: The senior management needs to be accountable to the board particularly with respect to compensation plans, corporate governance needs to be enhanced |
| Dissident's plan: Nominate a candidate with extensive experience of the financial services industry in order to further improve the quality of the board and improve corporate governance |
| Management's platform: Believes that the company has performed well over the last five years and that the dissident's nominee does not bring any needed experience/value to the board |
| Management's plan: To grow the company organically and transform its lending and deposit mix from that of a traditional savings and loan association to more like a commercial bank. |
| Solicitation costs/reimbursement: The company estimates total solicitation cost to be $100,000. The dissident estimates total solicitation cost to be $250,000, and intends to seek reimbursement in the event that its nominee gets elected. |
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| ISS Recommendation: Although Federal Trust has performed well in terms of stock price appreciation, we are concerned about the governance issues. Consequently, we recommend investors support the dissident nominee for one seat on a six-member board. We feel that this will provide greater oversight of the board. | |
| Company: Career Education Corp. | | Meeting Date: 05/18/2006 |
| Company Name: Career Education Corp. |
| Dissidents: R. Steven Bostic |
| D&O ownership: 5.2 percent |
| Dissident ownership:1.1 percent |
| Stakes: Three seats on a nine-member board |
| Dissident's concerns: Company continues to be subject to numerous investigations, sanctions, and lawsuits; stock price continues to languish relative to P/E levels of its peers in the education sector; company's corporate governance reforms did not go far enough toward implementing Mr. Bostic's reforms which were strongly endorsed by shareholders in 2005. |
| Dissident's plan: Implement changes in management's policies; resolve the AIU accreditation and probation issues; and design and implement an enterprise transformation plan to enhance the company's financial performance |
| Management's platform: Strong track record of financial growth; making positive progress on regulatory issues and pending litigation; implemented positive governance changes. |
| Management's plan: Continue to grow the company profitably and become the industry’s best in class for service and compliance and promptly address regulatory issues |
| Solicitation costs/reimbursement: The company estimates total expenditures relating to proxy solicitation incurred will be approximately $750,000. The dissident estimates total costs in connection with the proxy solicitation to be between $1,000,000 and $1,500,000. If successful in the contest, the dissident will seek reimbursement of the costs from the company. |
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| ISS Recommendation: ISS recommends that shareholders vote FOR the dissident slate and vote the BLUE card. | |
| Company: CNB Corporation (SC) | | Meeting Date: 05/09/2006 |
| Company Name:CNB Corporation |
| Dissidents: Willis J. Duncan and W. Jennings Duncan |
| D&O ownership: 16.16 percent |
| Dissident ownership: 7.41 percent |
| Stakes: Three seats on a ten member board |
| Dissident's concerns: Current management wrongfully removed Willis Duncan (former Chairman) and Jennings Duncan (former President) from the company; amendments made to company by-laws; and increase in salary and bonus for certain executives |
| Dissident's plan: Want resignation of the five board members who voted for removal of Willis Duncan and Jennings Duncan from the board. |
| Management's platform: Previous management did not have a comprehensive strategic plan for the Bank; current management is more accountable to shareholders |
| Management's plan: To adopt a more aggressive growth strategy for the Bank, while improving corporate governance |
| Solicitation costs/reimbursement: Management expect costs of approximately $160,000 in excess of normal proxy solicitation costs. The dissidents expects costs of approximately $190,000. The dissidents do not intend to seek reimbursement of expenses from the company. |
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| ISS Recommendation: ISS recommends that shareholders support the management slate and vote the BLUE card. | |
| Company: Tri-Continental Corp. | | Meeting Date: 05/04/2006 |
| Fund Name: Tri-Continental Corporation |
| Dissidents: Western Investment Hedged Partners L.P. and its affiliates (Western Investment) |
| D&O ownership: All directors and officers as a group currently own less than one percent of the Fund's common stock. |
| Dissident ownership: Western Investment currently owns over 7.6 million shares of common stock of the Fund or more than seven percent of the outstanding common shares. |
| Stakes: Three seats on the Fund's nine member board. |
| Dissident's concerns: the Fund’s stock has underperformed the market on a long-term basis resulting in the Fund’s share price trading at a persistent double-digit discount to net asset value (NAV). |
| Dissident's plan: If elected, Western Investment's director nominees would urge the Fund to immediately take certain actions to reduce or close the Fund's discount to NAV. |
| Management's platform: Believes the actions proposed by Western Investment could only be undertaken at significant expense to the Fund's shareholders, and would ultimately lead to termination of the Fund. |
| Management's plan: Conduct open market purchases when the Fund's discount to NAV exceeds ten percent. Monitor the Fund's discount to NAV. |
| Solicitation costs/reimbursement: Seeking reimbursement. |
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| ISS Recommendation: Vote FOR dissident nominees on gold proxy card. | |
| Company: Yardville National Bancorp | | Meeting Date: 05/03/2006 |
| Company Name: Yardville National Bancorp ("Yardville") |
| Dissidents: Committee to Preserve Shareholder Value led by Lawrence B. Seidman ("Committee") |
| D&O ownership: 16.24 percent |
| Dissident ownership: 8.25 percent |
| Stakes: Three seats on a 13-member board |
| Dissident's concerns: Underperforming bank; need for board oversight; potential conflicts of interest between directors and the company |
| Dissident's plan: Implement a share repurchase plan and retain an investment banker to determine the value of the company in a sale versus remaining independent |
| Management's platform: Strong track record for delivering value to shareholders; right management team to execute the strategic plan; dissidents are short-term investors attempting to press for an immediate sale of the company |
| Management's plan: Execute its strategic plan to take advantage of industry consolidation, expand operations in markets with significant growth, and execute its retail strategy |
| Solicitation costs/reimbursement: The dissident currently estimates the costs incurred in this contest will be approximately $50,000. The dissident intends to seek reimbursement from the company for those expenses, if the dissident nominees are elected. Management estimates the costs in connection with this contest to be approximately $200,000. |
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| ISS Recommendation: ISS recommends that shareholders vote FOR all of the management nominees and vote the BLUE card. | |
| Company: Synergy Financial Group, Inc. | | Meeting Date: 04/04/2006 |
| Company Name: Synergy Financial Group, Inc. |
| Dissidents: PL Capital Group |
| D&O ownership: 8.3 percent |
| Dissident ownership: 9.8 percent |
| Stakes: Two board seats out of nine (three open seats) |
| Dissident's concerns: 1) Return on assets and return on equity ("ROA" and "ROE" respectively) have been declining, 2) stock buybacks have been insufficient, and 3) poor corporate governance |
| Dissident's plan: 1) Reduce the level of equity held by Synergy by $20 million through buybacks, 2) issue trust preferred securities to free up equity capital for buybacks, 3) increase the loan to deposit ratio to 130 percent, 4) eliminate deferred comp program, 5) initiate governance reform |
| Management's platform: 1) The company's performance has been strong, 2) the company is buying back stock, and 3) the company's governance does not alienate shareholders |
| Solicitation costs/reimbursement: Management expects that the total costs incurred in connection with this solicitation will be approximately $250,000. The dissident expects that the total expenses related to this solicitation will be approximately $125,000 and intends to seek reimbursement from the company for its expenses. |
| ISS Recommendation: ISS recommends a vote FOR Daniel P. Spiegel and Daniel M. Eliades on the GREEN proxy card. We recommend that shareholders DO NOT VOTE the WHITE proxy card. | |
| Company: Gencorp Inc. | | Meeting Date: 03/31/2006 |
| Company Name: GenCorp Inc. |
| Dissidents: Pirate Capital LLC |
| D&O ownership: 2.6 percent |
| Dissident ownership: 8.1 percent |
| Stakes: Three seats on a ten-member board |
| Dissident's concerns: Declining shareholders' equity and net income;missed projections and goals ; poor corporate governance practices |
| Dissident's plan: Promote accountability of senior management; advocate corporate governance improvements; oversee efforts to maximize shareholder value |
| Management's platform: Current strategy to focus on two core businesses is working; dissidents have no specific plans to maximize shareholder value; management nominees are better suited to guide the company |
| Management's plan: Strengthen and grow Aerojet business and unlock value of real estate assets |
| Solicitation costs/reimbursement: Management expects that the total costs incurred in connection with this solicitation will be approximately $2.1 million. The dissident estimates that the total expenses related to this solicitation will be approximately $500,000 and will seek reimbursement from the company for its expenses. |
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| ISS Recommendation: ISS recommends a vote FOR Robert C. Woods and WITHHOLD votes from Todd R. Snyder and David A. Lorber on the GREEN proxy card. We recommend that shareholders DO NOT VOTE the WHITE proxy card. | |
| Company: Financial Industries Corp. | | Meeting Date: 12/06/2006 |
| Company Name: Financial Industries Corp. |
| Dissidents: Improve FIC |
| D&O ownership: 4.5 percent |
| Dissident ownership: Less than 0.1 percent |
| Stakes: Full board |
| Dissident's concerns: Since the current board took control of FIC in Aug. 2003, it has overseen the hiring of inexperienced management, excessive increases in management and director compensation, the failure to file required audited financials and reports with the SEC, a decline in share price from approximately $14.00 to $8.00 and the forced delisting of FIC from NASDAQ. |
| Dissident's plan: Hiring experienced, competent management to run the company, providing timely and correct financial statements and to explore all options for enhancing shareholder value. |
| Management's platform: The new board has taken substantial steps intended to stabilize the business and refocus FIC’s growth strategy. |
| Management's plan: Be current in its financial statement by spring 2007, start growing the business again, and explore strategic alternatives to solve capital structure issues. |
| Solicitation costs/reimbursement: Improve FIC estimates it will spend approximately $200,000 in solicitation costs, and will seek reimbursement from the company if it wins a majority of the new board. Management estimates the costs for the solicitation will be approximately $133,000. |
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| ISS Recommendation: We recommend shareholders support two of the dissident nominees (John A. Fibiger and Kenneth W. Phillips). | |
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