Page 10 of 17 – SEC Filing On January 21, 2015, Mr. DeMarco submitted
a letter to the Chairman of the Board outlining his concerns with the Board’s decision on January 19, 2015, to (i) create
a special committee that has the full authority to take “all actions” and make all decisions that the “full Board
would be empowered to take or make”; and (ii) exclude Mr. DeMarco, and Mr. DeMarco alone, from this “Super Committee”.
The letter asserts that the formation of such a committee is premised upon an alleged conflict of interest between SCM and other
non-management stockholders that is non-existent. It further states that the Board ignored the potential conflicts of other directors,
and deliberately crafted the committee in an overly broad manner to effectively exclude Mr. DeMarco from all Board business. The
letter also notes that the stockholders of the Issuer must soon determine how to best respond to the Board’s actions and
that non-management stockholders have tolerated negative stockholder returns, poor governance and limited accountability at the
Issuer for far too long. A copy of the letter is attached as Exhibit D and incorporated herein by reference.
On February 4, 2015, Mr. DeMarco submitted
a letter to the Chairman of the Board in response to a letter from the Chairman to Mr. DeMarco dated January 30, 2015. Mr. DeMarco’s
letter reiterates that there is no conflict between SCM and other non-management stockholders, and examines the potential conflicts
of the other current members of the Board. Further, the letter corrects certain misstatements made by the Chairman regarding SCM’s
history of governance concerns with the Issuer and motivations for seeking governance improvements. In addition, the letter asserts
that the Chairman continues to be deliberately vague about the scope and purpose of the “Super Committee” formed on
January 19, 2015. Finally, the letter refutes the insinuation that Mr. DeMarco has improperly shared confidential Board matters.
A copy of the letter is attached as Exhibit E and incorporated herein by reference.
On March 17, 2015, SCP submitted a letter
to the Issuer (the “Nomination Letter”) nominating Dominic P. DeMarco, Nicholas Donatiello, Jr. and Michael J. McConnell
(collectively, the “Nominees”) for election to the Board at the Issuer’s 2015 Annual Meeting of Stockholders.
In its Nomination Letter, SCP also reserved the right to further nominate, substitute or add additional persons in the event that
(a) the Issuer purports to increase the number of directorships; (b) the Issuer makes or announces any changes to its bylaws or
takes or announces any other action that purports to have, or if consummated would purport to have, the effect of disqualifying
any of the Nominees; or (c) any of the Nominees is unable or hereafter becomes unwilling for any reason to serve as a director.
On March 17, 2015, SCM issued a press release
regarding the submission of the Nomination Letter and containing the text of a letter submitted to the Chairman of the Board. Among
other things, the letter highlights the Issuer’s underperformance over the last one, five and ten years relative to its peer
group, the S&P 600 Retailing Index and the Russell 2000. In addition, the letter notes the Issuer’s poor governance practices
and the need for a fresh perspective on the Board. The press release is attached as Exhibit F and incorporated herein by reference.
On April 30, 2015, (i) the Issuer, (ii) SCM,
SCMGP, SCP and SQP (collectively, “Stadium”), (iii) Mr. DeMarco and (iv) Nicholas Donatiello, Jr. entered into a Settlement
Agreement (the “Settlement Agreement”). Under the terms of the Settlement Agreement, in addition to David R. Jessick,
the Issuer agreed to nominate Mr. DeMarco for re-election and Mr. Donatiello for election to the Board at the 2015 Annual Meeting
as Class A Directors.
The Issuer also agreed to expand the Board
from seven to eight members and appoint Robert C. Galvin to the Board as a Class A Director as soon as practicable after the 2015
Annual Meeting. If Mr. Galvin is not available to serve as a director, then the Issuer and Stadium will agree upon one candidate
from a pool of candidates identified by an executive search firm.
Page 10 of 17
On January 21, 2015, Mr. DeMarco submitted
a letter to the Chairman of the Board outlining his concerns with the Board’s decision on January 19, 2015, to (i) create
a special committee that has the full authority to take “all actions” and make all decisions that the “full Board
would be empowered to take or make”; and (ii) exclude Mr. DeMarco, and Mr. DeMarco alone, from this “Super Committee”.
The letter asserts that the formation of such a committee is premised upon an alleged conflict of interest between SCM and other
non-management stockholders that is non-existent. It further states that the Board ignored the potential conflicts of other directors,
and deliberately crafted the committee in an overly broad manner to effectively exclude Mr. DeMarco from all Board business. The
letter also notes that the stockholders of the Issuer must soon determine how to best respond to the Board’s actions and
that non-management stockholders have tolerated negative stockholder returns, poor governance and limited accountability at the
Issuer for far too long. A copy of the letter is attached as Exhibit D and incorporated herein by reference.
On February 4, 2015, Mr. DeMarco submitted
a letter to the Chairman of the Board in response to a letter from the Chairman to Mr. DeMarco dated January 30, 2015. Mr. DeMarco’s
letter reiterates that there is no conflict between SCM and other non-management stockholders, and examines the potential conflicts
of the other current members of the Board. Further, the letter corrects certain misstatements made by the Chairman regarding SCM’s
history of governance concerns with the Issuer and motivations for seeking governance improvements. In addition, the letter asserts
that the Chairman continues to be deliberately vague about the scope and purpose of the “Super Committee” formed on
January 19, 2015. Finally, the letter refutes the insinuation that Mr. DeMarco has improperly shared confidential Board matters.
A copy of the letter is attached as Exhibit E and incorporated herein by reference.
On March 17, 2015, SCP submitted a letter
to the Issuer (the “Nomination Letter”) nominating Dominic P. DeMarco, Nicholas Donatiello, Jr. and Michael J. McConnell
(collectively, the “Nominees”) for election to the Board at the Issuer’s 2015 Annual Meeting of Stockholders.
In its Nomination Letter, SCP also reserved the right to further nominate, substitute or add additional persons in the event that
(a) the Issuer purports to increase the number of directorships; (b) the Issuer makes or announces any changes to its bylaws or
takes or announces any other action that purports to have, or if consummated would purport to have, the effect of disqualifying
any of the Nominees; or (c) any of the Nominees is unable or hereafter becomes unwilling for any reason to serve as a director.
On March 17, 2015, SCM issued a press release
regarding the submission of the Nomination Letter and containing the text of a letter submitted to the Chairman of the Board. Among
other things, the letter highlights the Issuer’s underperformance over the last one, five and ten years relative to its peer
group, the S&P 600 Retailing Index and the Russell 2000. In addition, the letter notes the Issuer’s poor governance practices
and the need for a fresh perspective on the Board. The press release is attached as Exhibit F and incorporated herein by reference.
On April 30, 2015, (i) the Issuer, (ii) SCM,
SCMGP, SCP and SQP (collectively, “Stadium”), (iii) Mr. DeMarco and (iv) Nicholas Donatiello, Jr. entered into a Settlement
Agreement (the “Settlement Agreement”). Under the terms of the Settlement Agreement, in addition to David R. Jessick,
the Issuer agreed to nominate Mr. DeMarco for re-election and Mr. Donatiello for election to the Board at the 2015 Annual Meeting
as Class A Directors.
The Issuer also agreed to expand the Board
from seven to eight members and appoint Robert C. Galvin to the Board as a Class A Director as soon as practicable after the 2015
Annual Meeting. If Mr. Galvin is not available to serve as a director, then the Issuer and Stadium will agree upon one candidate
from a pool of candidates identified by an executive search firm.
| Page 10 of 17 |
