Page 13 of 19 – SEC Filing
addition, the parties agreed that at the 2016/17 Annual Meeting, three of the Issuers current directors (excluding any Initial Nominees) will not stand for reelection and immediately prior
to the 2016/17 Annual Meeting the Board shall take all necessary action to set the size of the Board at 11 members. Further, during the Standstill Period (as defined below), the size of the Board will not be modified from 11 members without the
unanimous approval of the Board. The Issuer also agreed that the Board will include the Initial Nominees as nominees for election to the Board on the slate of nominees recommended by the Board in the Issuers proxy statement and on its proxy
card relating to the 2016/17 Annual Meeting and the Issuers 2018 annual meeting of stockholders (the 2018 Annual Meeting).
The parties agreed that promptly following the appointment of the Initial Nominees to the Board, the Board will form a working group (the
Working Group) which will include as members to the extent elected to serve on the Board, through and until the Issuers 2018 Annual Meeting, Mr. Welling, Mr. Korangy, Mr. Simon and Mr. Heyer. The Working Group will work
with a mutually agreed upon adviser to review the Issuers portfolio of businesses, brands and operating strategy, evaluate alternatives to create shareholder value and make recommendations to the Board regarding such alternatives. The Working
Group will remain in effect during the Standstill Period (as defined below) and, if determined by the Board, thereafter.
The parties also
agreed that promptly following the 2016/17 Annual Meeting, the Board shall take all necessary actions to cause the Compensation Committee of the Board to be comprised of Mr. Welling, Mr. Zilavy and Mr. Sinclair and that Mr. Zilavy
will be elected to serve as Chair of the Compensation Committee.
If during the Standstill Period (as defined below) any of
Mr. Welling, Mr. Korangy or Dr. Clark (x) is unable or unwilling to serve as a director or resigns as a director or is removed as a director, and (y) the aggregate beneficial ownership of the Engaged Group is continuously at
least 4.9% of the Shares outstanding, then the Engaged Group will have the ability to designate a substitute person to replace such director. In addition, pursuant to the Cooperation Agreement, in the event that the Engaged Group ceases to be the
beneficial owner of Shares equal to at least 4.9% of the Shares outstanding, the Issuer shall be relieved of certain of its obligations. In addition, if any of Mr. Sinclair, Ms. Zier or Mr. Hollis is not elected to the Board at the
2016/17 Annual Meeting or is unable or unwilling to serve as a director or resigns or is removed as a director during the Standstill Period, the Board will appoint a replacement to fill the vacancy as soon as reasonably practicable and any such
replacement shall be subject to approval by the Engaged Group in its reasonable discretion.
During the Standstill Period (as defined
below) the Engaged Group agreed (among other customary matters) that it will not, and that it will not permit any of its affiliates to nominate any person for election as a director. The Engaged Group further agreed (among other customary matters)
that it will appear in person or by proxy at each annual or special meeting of stockholders during the Standstill Period (as defined below) and vote all Shares beneficially owned by the Engaged Group at such meeting (a) in favor of the slate of
directors recommended by the Board and any other proposal supported by a majority of the Board other than with respect to the say-on-pay proposal at the
2016/17 Annual Meeting, for which the Engaged Group may vote at their discretion, (b) against any shareholder proposals or director nominations at such annual or special meeting which are not supported by the Board, and (c) in favor of the
ratification of the appointment of such accounting firm as may be determined by the Board as the Issuers independent registered public accounting firm for the relevant fiscal year.
The parties agreed that the standstill period (the Standstill Period) begins on the date of the Cooperation Agreement and extends
through and shall include the 2018 Annual Meeting, provided, however, that if the 2018 Annual Meeting has not occurred by December 31, 2018, the Standstill Period shall terminate as of such date.
The foregoing description of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the
full text of the Cooperation Agreement, which is incorporated by reference as Exhibit 99.2 and is incorporated herein by reference.
On
September 28, 2017, the Engaged Group and the Issuer jointly issued a press release to announce that they have entered into the Cooperation Agreement.
