Page 11 of 17 – SEC Filing The Issuer also agreed to recommend that the stockholders of the
Issuer vote at the 2015 Annual Meeting in favor of (i) the Issuer’s precatory proposal (the “Majority Voting Proposal”)
regarding the implementation of a majority voting standard in uncontested elections of directors (a “Majority Voting Standard”);
(ii) the Issuer’s precatory proposal (the “Supermajority Voting Proposal”) regarding the elimination of certain
provisions in the Issuer’s charter and bylaws that require the affirmative vote of at least 80% of the voting power of all
of the Issuer’s then-outstanding shares of common stock (the “Supermajority Voting Provisions”); and (iii) SCM’s
stockholder proposal relating to the elimination of the classified structure of the Board (the “Declassified Board Proposal”).
If the Majority Voting Proposal receives a majority of the votes
cast at the 2015 Annual Meeting with respect to such proposal, then, within 30 days after the 2015 Annual Meeting, the Board will
take all actions necessary to amend the Issuer’s bylaws to implement a Majority Voting Standard.
If the Supermajority Voting Proposal receives a majority of the
votes cast at the 2015 Annual Meeting with respect to such proposal, then, at the Issuer’s 2016 Annual Meeting of Stockholders
(the “2016 Annual Meeting”), the Board will present to the stockholders of the Issuer, and will recommend that the
stockholders of the Issuer vote in favor of, amendments to the Issuer’s charter and bylaws to eliminate any Supermajority
Voting Provision in the charter and bylaws.
If the Declassified Board Proposal receives a majority of the votes
cast at the 2015 Annual Meeting with respect to such proposal, then, at the 2016 Annual Meeting, the Board will present to the
stockholders of the Issuer, and will recommend that the stockholders of the Issuer vote in favor of, an amendment to the Issuer’s
charter to eliminate the classification of the Board and provide for the annual election of all directors. If such proposal receives
the requisite number of votes to effect such action at the 2016 Annual Meeting, then the directors elected at the 2016 Annual Meeting
will serve a one-year term expiring at the Issuer’s 2017 Annual Meeting of Stockholders (the “2017 Annual Meeting”)
and the directors elected or appointed prior to the 2016 Annual Meeting will finish their respective terms.
Under the terms of the Settlement Agreement, the Issuer also agreed
to establish a three-person Value Creation Committee of the Board (the “Value Creation Committee”) following the 2015
Annual Meeting to review the Issuer’s business, operations, capital allocations and strategy and to make recommendations
to the Board on these issues. The Value Creation Committee will dissolve automatically at the end of the Standstill Period (defined
below) unless extended by the Board.
Stadium is subject to certain standstill restrictions during the
period from the date of the Settlement Agreement until the earlier of (i) 10 days prior to the deadline for submission of stockholder
nominees for the 2016 Annual Meeting; or (ii) 100 days prior to the first anniversary of the 2015 Annual Meeting (such period,
the “Standstill Period”). During the Standstill Period, Stadium is subject to customary standstill and voting obligations,
including, among other things, that Stadium and its affiliates and associates will not acquire beneficial ownership of 14% or more
of the outstanding Stock or participate in a proxy solicitation. Additionally, Stadium agreed not to use or proceed with the proxy
statement it filed in connection with the 2015 Annual Meeting, and to vote all of its shares in favor of the election of Messrs.
DeMarco, Donatiello and Jessick, the Issuer’s “say-on-pay” proposal, the ratification of the Issuer’s auditors,
the Majority Voting Proposal, the Supermajority Voting Proposal and the Declassified Board Proposal. The Issuer also agreed to
reimburse Stadium for its reasonable and documented fees and expenses (including but not limited to legal expenses) in an amount
not to exceed $195,000.
The foregoing summary of the Settlement Agreement is not complete
and is qualified in its entirety by reference to, and should be read in conjunction with, the complete text of the Settlement Agreement,
which is attached as Exhibit G and is incorporated herein by reference.
On May 1, 2015, the Issuer issued a press release announcing the
Settlement Agreement and related matters. A copy of the letter is attached as Exhibit H and incorporated herein by reference.
Page 11 of 17
The Issuer also agreed to recommend that the stockholders of the
Issuer vote at the 2015 Annual Meeting in favor of (i) the Issuer’s precatory proposal (the “Majority Voting Proposal”)
regarding the implementation of a majority voting standard in uncontested elections of directors (a “Majority Voting Standard”);
(ii) the Issuer’s precatory proposal (the “Supermajority Voting Proposal”) regarding the elimination of certain
provisions in the Issuer’s charter and bylaws that require the affirmative vote of at least 80% of the voting power of all
of the Issuer’s then-outstanding shares of common stock (the “Supermajority Voting Provisions”); and (iii) SCM’s
stockholder proposal relating to the elimination of the classified structure of the Board (the “Declassified Board Proposal”).
If the Majority Voting Proposal receives a majority of the votes
cast at the 2015 Annual Meeting with respect to such proposal, then, within 30 days after the 2015 Annual Meeting, the Board will
take all actions necessary to amend the Issuer’s bylaws to implement a Majority Voting Standard.
If the Supermajority Voting Proposal receives a majority of the
votes cast at the 2015 Annual Meeting with respect to such proposal, then, at the Issuer’s 2016 Annual Meeting of Stockholders
(the “2016 Annual Meeting”), the Board will present to the stockholders of the Issuer, and will recommend that the
stockholders of the Issuer vote in favor of, amendments to the Issuer’s charter and bylaws to eliminate any Supermajority
Voting Provision in the charter and bylaws.
If the Declassified Board Proposal receives a majority of the votes
cast at the 2015 Annual Meeting with respect to such proposal, then, at the 2016 Annual Meeting, the Board will present to the
stockholders of the Issuer, and will recommend that the stockholders of the Issuer vote in favor of, an amendment to the Issuer’s
charter to eliminate the classification of the Board and provide for the annual election of all directors. If such proposal receives
the requisite number of votes to effect such action at the 2016 Annual Meeting, then the directors elected at the 2016 Annual Meeting
will serve a one-year term expiring at the Issuer’s 2017 Annual Meeting of Stockholders (the “2017 Annual Meeting”)
and the directors elected or appointed prior to the 2016 Annual Meeting will finish their respective terms.
Under the terms of the Settlement Agreement, the Issuer also agreed
to establish a three-person Value Creation Committee of the Board (the “Value Creation Committee”) following the 2015
Annual Meeting to review the Issuer’s business, operations, capital allocations and strategy and to make recommendations
to the Board on these issues. The Value Creation Committee will dissolve automatically at the end of the Standstill Period (defined
below) unless extended by the Board.
Stadium is subject to certain standstill restrictions during the
period from the date of the Settlement Agreement until the earlier of (i) 10 days prior to the deadline for submission of stockholder
nominees for the 2016 Annual Meeting; or (ii) 100 days prior to the first anniversary of the 2015 Annual Meeting (such period,
the “Standstill Period”). During the Standstill Period, Stadium is subject to customary standstill and voting obligations,
including, among other things, that Stadium and its affiliates and associates will not acquire beneficial ownership of 14% or more
of the outstanding Stock or participate in a proxy solicitation. Additionally, Stadium agreed not to use or proceed with the proxy
statement it filed in connection with the 2015 Annual Meeting, and to vote all of its shares in favor of the election of Messrs.
DeMarco, Donatiello and Jessick, the Issuer’s “say-on-pay” proposal, the ratification of the Issuer’s auditors,
the Majority Voting Proposal, the Supermajority Voting Proposal and the Declassified Board Proposal. The Issuer also agreed to
reimburse Stadium for its reasonable and documented fees and expenses (including but not limited to legal expenses) in an amount
not to exceed $195,000.
The foregoing summary of the Settlement Agreement is not complete
and is qualified in its entirety by reference to, and should be read in conjunction with, the complete text of the Settlement Agreement,
which is attached as Exhibit G and is incorporated herein by reference.
On May 1, 2015, the Issuer issued a press release announcing the
Settlement Agreement and related matters. A copy of the letter is attached as Exhibit H and incorporated herein by reference.
| Page 11 of 17 |
