Page 13 of 15 – SEC Filing BWW as of [August 22, 2016].” Company counsel insisted that we provide a brokerage account statement evidencing Marcato’s ownership. When asked to explain, our attorneys were told by your counsel that Marcato “could have sold all of its shares” since the 13D filing. To put it another way: management appears to have envisioned a scenario in which Marcato submitted a shareholder list request after it sold all of its BWW holdings, without disclosing the sale in a subsequent 13D amendment. It’s a scenario that defies logic. Company counsel then conditioned providing any information on Marcato entering into an onerous confidentiality agreement that went well beyond what was required by law. Surely, management must have understood that providing a draft agreement with such terms served no purpose other than to further delay our communications with other shareholders. Nevertheless, we reached out in good faith with a draft confidentiality agreement reflecting an accommodating approach. We also provided the account statement, as requested. In return, Company counsel asserted that Marcato Capital Management LP (“Marcato Capital”) was not a proper party to the shareholder list request “[g]iven that the applicable statute requires the shareholder to own stock as of the dated [sic] of a demand.” We were surprised by this response, given that Minn. Stat. § 302A.461 explicitly states that a “beneficial owner” has an “absolute right” to demand shareholder list materials and that Marcato Capital was clearly a beneficial owner. Your counsel then demanded that Marcato Capital provide copies of its confidential investment advisory agreements to prove that it was a beneficial owner of common stock. After multiple rounds of back and forth with counsel, management backed off its unsupported demands and conceded that we were shareholders and entitled to receive materials. We were optimistic we were putting this episode behind us. Unfortunately, when the materials we were promised finally arrived by email, the information we were given was incomplete, outdated and virtually useless. These materials included: · Transfer agent-level shareholder lists of the holders of record of the Company’s common stock dated as of September 13, 2016 and March 17, 2016. These lists did not provide any information regarding the identities or holdings of the actual beneficial owners of the common shares – information necessary to communicate with them and which is not only customarily provided but legally required to be provided; and
· A list of holders of Company shares held through employee benefit plans, dated March 14, 2016. This list is over six-months old and only provides information with respect to approximately 1% of the Company’s outstanding shares.
In other words, management chose to disclose only the holders known to the Company’s transfer agent. You undoubtedly are aware that, as with every other public company, virtually all BWW shareholders hold their shares in “street name” through accounts with banks, brokers and other financial intermediaries. The distinction between the two is critical and widely understood. The information we were provided contains no relevant or useful information about the actual shareholder base. That the Company would respond to our request in such a perfunctory manner is deeply disappointing.
BWW as of [August 22, 2016].” Company counsel insisted that we provide a brokerage account statement evidencing Marcato’s ownership. When asked to explain, our attorneys were told by your counsel that Marcato “could have sold all of its shares” since the 13D filing. To put it another way: management appears to have envisioned a scenario in which Marcato submitted a shareholder list request after it sold all of its BWW holdings, without disclosing the sale in a subsequent 13D amendment. It’s a scenario that defies logic. Company counsel then conditioned providing any information on Marcato entering into an onerous confidentiality agreement that went well beyond what was required by law. Surely, management must have understood that providing a draft agreement with such terms served no purpose other than to further delay our communications with other shareholders.
Nevertheless, we reached out in good faith with a draft confidentiality agreement reflecting an accommodating approach. We also provided the account statement, as requested. In return, Company counsel asserted that Marcato Capital Management LP (“Marcato Capital”) was not a proper party to the shareholder list request “[g]iven that the applicable statute requires the shareholder to own stock as of the dated [sic] of a demand.” We were surprised by this response, given that Minn. Stat. § 302A.461 explicitly states that a “beneficial owner” has an “absolute right” to demand shareholder list materials and that Marcato Capital was clearly a beneficial owner. Your counsel then demanded that Marcato Capital provide copies of its confidential investment advisory agreements to prove that it was a beneficial owner of common stock.
After multiple rounds of back and forth with counsel, management backed off its unsupported demands and conceded that we were shareholders and entitled to receive materials. We were optimistic we were putting this episode behind us. Unfortunately, when the materials we were promised finally arrived by email, the information we were given was incomplete, outdated and virtually useless. These materials included:
| · | Transfer agent-level shareholder lists of the holders of record of the Company’s common stock dated as of September 13, 2016 and March 17, 2016. These lists did not provide any information regarding the identities or holdings of the actual beneficial owners of the common shares – information necessary to communicate with them and which is not only customarily provided but legally required to be provided; and |
| · | A list of holders of Company shares held through employee benefit plans, dated March 14, 2016. This list is over six-months old and only provides information with respect to approximately 1% of the Company’s outstanding shares. |
In other words, management chose to disclose only the holders known to the Company’s transfer agent. You undoubtedly are aware that, as with every other public company, virtually all BWW shareholders hold their shares in “street name” through accounts with banks, brokers and other financial intermediaries. The distinction between the two is critical and widely understood. The information we were provided contains no relevant or useful information about the actual shareholder base. That the Company would respond to our request in such a perfunctory manner is deeply disappointing.
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