Asure Software (NASDAQ: ASUR)
To: Stockholders of Record of Forgent Networks, Inc. d/b/a Asure
Software, as of April 13, 2009 (the "Record Date ")
Re: Schedule 13D Filed by Pinnacle Partners, LLC et al on May 4,
2009 - Threatened Proxy Contest
Dear Stockholder:
On May 4, 2009, Mr. David Sandberg filed a Schedule 13D with the
Securities and Exchange Commission on behalf of Pinnacle Partners,
LLC, Red Oak Partners, LLC, and several other affiliates
(collectively, hereafter "Pinnacle"). In the Schedule 13D, Pinnacle
announced its intention to initiate a proxy fight in hopes of
voting down the "going private" transaction that is scheduled to be
voted on by the stockholders at the upcoming special meeting of the
stockholders on June 2, 2009. As detailed in its Proxy Statement,
the Company recommends the going private transaction because it
should save the Company an estimated $1 million a year in costs,
simplify the Company's operations from a regulatory compliance
standpoint, and help the Company achieve profitability sooner.
Because of the importance of the going private transaction to the
future of the Company, we believe that it is important for us to
provide you some additional background and insight into Pinnacle's
actions so that you can have a clearer understanding of its
methods, motivations and possible competing agenda.
The Company has been aware of and in regular contact with Mr.
Sandberg since late November 2008. At that time, Mr. Sandberg first
called the Company's CFO, Mr. Jay Peterson, and advised Mr.
Peterson that (i) he was representing major shareholders (ii) he
was contemplating a tender offer for a portion of the Company's
shares, and (iii) he considered the Company "an asset play," which
is generally understood to mean that a company would sell its
assets, liquidate, and cease to operate as a going concern. Shortly
thereafter, Mr. Sandberg requested a face-to-face meeting with
Company management. As year end schedules were tight, the meeting
could not be arranged; however, the Company continued to correspond
with Mr. Sandberg by telephone and e-mail. Through December and
into January, Mr. Sandberg continued to press Company management
for a face-to-face meeting and for details regarding the Company's
expenses, liabilities and assets; this focus being consistent with
his earlier characterization of the Company as an "asset play".
Concurrently, Mr. Sandberg and certain of his affiliates continued
to increase their shareholdings in the Company.
Mr. Sandberg responded negatively to the Company's announcement
of its proposed going private transaction on January 29, 2009. His
immediate and strident opposition to the going private transaction
was consistent with what one might expect given an "asset play"
strategy. Since then, Mr. Sandberg's attitude has devolved into
open and unrestrained hostility characterized by personal and
professional attacks on Company management and the members of the
Board. This unbecoming behavior has now culminated in Mr.
Sandberg's Schedule 13D filing.
As members of the Board, we have certain well recognized and
well defined duties to our stockholders. It is those duties that
compel us to write this response. We see no purpose in engaging in,
and thus we will not engage in, a "tit-for-tat" response to Mr.
Sandberg's indictment of the past performance of Company's
management. Suffice it to say that we firmly believe that his
characterizations of management's past performance are inaccurate,
incomplete and wholly unfair. His assertions and conclusions --
apart from being errant and baseless -- are born of one who is
unencumbered by the fiduciary duties by which your management and
the Board are bound, or by any sense of restraint or balance. He
apparently has an agenda that, in his judgment, is best served by
maligning current management at all costs, and he is advancing that
agenda zealously.
Given the importance of the going private transaction, we do
feel that it is important to specifically address and clarify
certain aspects of Mr. Sandberg's arguments against the proposed
going private transaction. In that respect, we would ask you to
consider and reflect upon the following:
1. Pinnacle has intimated in several places in its Schedule 13D
filing that if the going private transaction is approved, the
stockholders will be "disabled" in certain respects or possibly
"cheated out of" certain rights under Delaware law. On this point,
Pinnacle is at least terribly confused. Whether the going private
transaction is approved or not, the Company will remain a Delaware
corporation governed by Delaware law. No stockholder rights under
Delaware law of any consequence to the going private transaction or
the proper governance of the Company will be diminished in any
respect. For Pinnacle to suggest otherwise is simply
irresponsible.
2. Pinnacle has stated that the Company should abandon the going
private transaction because it believes that "the only shareholders
who support Asure's board and management team are, in fact, Asure's
board and management team." Again, Pinnacle is simply wrong. The
company is very encouraged with the significant number of positive
votes that indicate strong shareholder support.
3. Pinnacle has stated that the decision to go private is "a
substantively poor, imprudent decision". As the stockholders of the
Company, that is exactly what you are being given the opportunity
to decide at the upcoming stockholders meeting. The Company has a
seasoned, experienced Board and seasoned, experienced management.
The Board and the management, with assistance from highly qualified
and experienced professionals, have analyzed this question fully
and completely over many months. In the end, the Board and
management have concluded, for all of the reasons set forth in the
Proxy Statement, that the going private transaction is
unquestionably in the best interest of the Company and its
stockholders. Pinnacle simply disagrees; that much is clear. But
what is not clear, or defensible, is its reasoning. Mr. Sandberg's
disapproval of current management aside, he has not raised a single
consideration relative to the going private transaction that has
not already been fully reviewed and evaluated by the Board. While
the Board appreciates Mr. Sandberg's interest and activism, the
Board is comfortable with its decision to go forward with, and
recommends, the going private transaction.
4. Finally, Pinnacle has stated that the $0.36 per share
purchase price to be paid to the stockholders who will be cashed
out in the going private transaction represents an excessive
premium when compared to the Company's current stock price. It has
also stated that Company management acknowledged that the premium
was excessive. Company management has never characterized the
premium as excessive. Company management has only acknowledged
that, given the recent decline in the Company's stock price, if the
per share purchase price were to be reset now, it would likely be
lower. It should be noted that the Board has previously considered
possibly resetting the per share purchase price given the recent
decline in the stock price. In the Board's judgment, the modest
cost savings to be achieved by resetting the per share purchase
price now did not justify the additional cost and likely delay in
consummating the going private transaction. Consequently, the Board
determined earlier not to reset the per share purchase price and
continues to hold that view at this time.
In conclusion, a few things are quite clear: Mr. Sandberg is
obviously hostile toward the current management and is prepared to
liberally condemn them whenever and wherever he can; he is opposed
to the going private transaction; and, ideally, he would prefer
that you, his fellow stockholder, not have the right to vote on the
going private transaction. Each of those positions is being
advanced under the guise of protecting your rights as a stockholder
and preserving your share value. We are not persuaded and suggest
that you should be wary of Mr. Sandberg's proposals. We believe
that the Company is addressing Pinnacle's legitimate concerns; just
not in the manner it has suggested. Pinnacle has given us no reason
to believe that its approach will result in greater cost savings or
lead the Company to profitability any sooner, and we believe that
Pinnacle's approach will possibly result in increased risk to the
Company and its stockholders. In the end, it is far easier to
reconcile Mr. Sandberg's statements and actions with his announced
"asset play" strategy than it is to reconcile them with what is in
the best interests of the Company and its stockholders. After due
consideration, we hope and trust that you will agree.
Thank you for your consideration.
The Board of Directors of Forgent Networks, Inc.
d/b/a Asure Software
Important Information
Forgent Networks, Inc. filed a definitive Proxy Statement with
the Securities and Exchange Commission on April 21, 2009, in
connection with Company's Special Meeting of Stockholders to be
held on June 2, 2009. Stockholders are strongly advised to read the
Proxy Statement carefully, as it contains important information.
The Company and certain other persons are deemed participants in
the solicitation of proxies from stockholders in connection with
the Special Meeting of Stockholders. Information concerning such
participants is available in the Company's Proxy Statement.
Stockholders may obtain, free of charge, copies of the Company's
Proxy Statement and any other documents the Company files with or
furnishes to the Securities and Exchange Commission in connection
with the Special Meeting of Stockholders through the Securities and
Exchange Commission's website at www.sec.gov, through the Company's
website at www.asuresoftware.com.
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