Page 11 of 17 – SEC Filing On June 27, 2016, the Issuer publicly announced the commencement of a strategic review process. Following such announcement, the Reporting Persons engaged, and intend to continue to engage, in communications with the Issuer’s Board of Directors (the “Board”) and management team regarding the Issuer’s operating performance and its strategic review process, including, but not limited to, assessing the various strategic options available to the Issuer, how an investment by a strategic partner or financial sponsor should be structured in order to protect the interests of the Issuer’s shareholders, the potential paths to improving operating performance and other means to enhance shareholder value. In order to facilitate continued discussions between the Reporting Persons and the Issuer regarding the Issuer’s strategic review process, the parties entered into a confidentiality agreement on September 14, 2016. 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, making proposals to the Issuer concerning changes to the capital allocation strategy, capitalization, ownership structure, including a sale of the Issuer as a whole or in parts, 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 85,613,246 Shares outstanding as of August 5, 2016, which is the total number of Shares outstanding as reported in the Issuer’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 10, 2016. As of the close of business on September 14, 2016, Engaged Capital Flagship Master beneficially owned 2,896,833 Shares, constituting approximately 3.4% 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 2,896,833 Shares owned by Engaged Capital Flagship Master, constituting approximately 3.4% of the Shares outstanding. As of the close of business on September 14, 2016, Engaged Capital Co-Invest IV beneficially owned 3,191,639 Shares, constituting approximately 3.7% of the Shares outstanding. As of the close of business on September 14, 2016, 337,963 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 Engaged Capital Co-Invest IV and the investment adviser of the Engaged Capital Account, may be deemed to beneficially own the 6,426,435 Shares owned in the aggregate by Engaged Capital Flagship Master and Engaged Capital Co-Invest IV and held in the Engaged Capital Account, constituting approximately 7.5% of the Shares outstanding. Engaged Holdings, as the managing member of Engaged Capital, may be deemed to beneficially own the 6,426,435 Shares owned in the aggregate by Engaged Capital Flagship Master and Engaged Capital Co-Invest IV and held in the Engaged Capital Account, constituting approximately 7.5% 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 6,426,435 Shares owned in the aggregate by Engaged Capital Flagship Master and Engaged Capital Co-Invest IV and held in the Engaged Capital Account, constituting approximately 7.5% of the Shares outstanding.
On June 27, 2016, the Issuer publicly announced the commencement of a strategic review process. Following such announcement, the Reporting Persons engaged, and intend to continue to engage, in communications with the Issuer’s Board of Directors (the “Board”) and management team regarding the Issuer’s operating performance and its strategic review process, including, but not limited to, assessing the various strategic options available to the Issuer, how an investment by a strategic partner or financial sponsor should be structured in order to protect the interests of the Issuer’s shareholders, the potential paths to improving operating performance and other means to enhance shareholder value. In order to facilitate continued discussions between the Reporting Persons and the Issuer regarding the Issuer’s strategic review process, the parties entered into a confidentiality agreement on September 14, 2016.
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, making proposals to the Issuer concerning changes to the capital allocation strategy, capitalization, ownership structure, including a sale of the Issuer as a whole or in parts, 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 85,613,246 Shares outstanding as of August 5, 2016, which is the total number of Shares outstanding as reported in the Issuer’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 10, 2016.
As of the close of business on September 14, 2016, Engaged Capital Flagship Master beneficially owned 2,896,833 Shares, constituting approximately 3.4% 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 2,896,833 Shares owned by Engaged Capital Flagship Master, constituting approximately 3.4% of the Shares outstanding.
As of the close of business on September 14, 2016, Engaged Capital Co-Invest IV beneficially owned 3,191,639 Shares, constituting approximately 3.7% of the Shares outstanding.
As of the close of business on September 14, 2016, 337,963 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 Engaged Capital Co-Invest IV and the investment adviser of the Engaged Capital Account, may be deemed to beneficially own the 6,426,435 Shares owned in the aggregate by Engaged Capital Flagship Master and Engaged Capital Co-Invest IV and held in the Engaged Capital Account, constituting approximately 7.5% of the Shares outstanding. Engaged Holdings, as the managing member of Engaged Capital, may be deemed to beneficially own the 6,426,435 Shares owned in the aggregate by Engaged Capital Flagship Master and Engaged Capital Co-Invest IV and held in the Engaged Capital Account, constituting approximately 7.5% 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 6,426,435 Shares owned in the aggregate by Engaged Capital Flagship Master and Engaged Capital Co-Invest IV and held in the Engaged Capital Account, constituting approximately 7.5% of the Shares outstanding.
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