Page 13 of 18 – SEC Filing
| Item 4. | Purpose of Transaction. |
The Reporting Persons
purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented
an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the
Reporting Persons, and the availability of Shares at prices that would make the purchase or sale of Shares desirable, the Reporting
Persons may endeavor to increase or decrease their position in the Issuer through, among other things, the purchase or sale of
Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may
deem advisable.
Engaged Capital
(together with its affiliates, “Engaged”) has engaged, and intends to continue to engage, in communications with the
Issuer’s Board of Directors (the “Board”) and management team regarding means to create stockholder value.
On March 23, 2018,
Engaged delivered a letter (the “Nomination Letter”) to the Issuer nominating Craig A. Barbarosh, Eric J. Ende and
Lowell W. Robinson (the “Nominees”) for election to the Board at the 2018 annual meeting of stockholders (the “Annual
Meeting”).
No Reporting Person
has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) – (j) of
Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following,
any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis.
Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the
price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons
may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without
limitation, engaging in additional communications with management and the Board of the Issuer, engaging in discussions with stockholders
of the Issuer and others about the Issuer and the Reporting Persons’ investment in the Issuer and Engaged’s nomination
of the Nominees, making proposals to the Issuer concerning changes to the capital allocation strategy, capitalization, ownership
structure, a sale of the Issuer, Board structure (including Board composition) or operations of the Issuer, purchasing additional
Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to
the Shares, or changing their intention with respect to any and all matters referred to in Item 4.
| Item 5. | Interest in Securities of the Issuer. |
(a) The
aggregate percentage of Shares reported owned by each person named herein is based upon 45,854,403 Shares outstanding as of March
9, 2018, which is the total number of Shares outstanding as reported in the Issuer’s annual report on Form 10-K filed with
the Securities and Exchange Commission on March 14, 2018.
As of the close of
business on April 4, 2018, Engaged Capital Flagship Master beneficially owned 2,189,101 Shares, constituting approximately 4.8%
of the Shares outstanding. Each of Engaged Capital Fund and Engaged Capital Offshore, as feeder funds of Engaged Capital Flagship
Master, may be deemed to beneficially own the 2,189,101 Shares owned by Engaged Capital Flagship Master, constituting approximately
4.8% of the Shares outstanding.
As of the close of
business on April 4, 2018, 210,899 Shares were held in the Engaged Capital Account, constituting less than 1% of the Shares outstanding.
Engaged Capital, as
the general partner and investment adviser of Engaged Capital Flagship Master and the investment adviser of the Engaged Capital
Account, may be deemed to beneficially own the 2,400,000 Shares owned in the aggregate by Engaged Capital Flagship Master and held
in the Engaged Capital Account, constituting approximately 5.2% of the Shares outstanding. Engaged Holdings, as the managing member
of Engaged Capital, may be deemed to beneficially own the 2,400,000 Shares owned in the aggregate by Engaged Capital Flagship Master
and held in the Engaged Capital Account, constituting approximately 5.2% of the Shares outstanding. Mr. Welling, as the Founder
and CIO of Engaged Capital and sole member of Engaged Holdings, may be deemed to beneficially own the 2,400,000 Shares owned in
the aggregate by Engaged Capital Flagship Master and held in the Engaged Capital Account, constituting approximately 5.2% of the
Shares outstanding.
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