The
following constitutes Amendment No. 2 (“Amendment No. 2”) to the Schedule 13D
filed by the undersigned. This Amendment No. 2 amends the Schedule
13D as specifically set forth. Bryant Riley, J. Michael Gullard and
Kenneth Potashner are hereby added as Reporting Persons to the Schedule
13D.
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Item
2.
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Identity and
Background
.
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Item 2 is
hereby amended to add the following:
Bryant
Riley (“Mr. Riley ”) is a nominee for the Board of Directors of the Issuer and
his principal occupation is serving as Managing Member of Riley Investment
Management LLC and Chairman of B. Riley & Co., LLC (“B. Riley &
Co.”). The principal business address of Mr. Riley is c/o B. Riley
& Co., 11100 Santa Monica Blvd. Suite 800, Los Angeles, California
90025. Mr. Riley is a citizen of the United States of
America.
J.
Michael Gullard (“Mr. Gullard ”) is a nominee for the Board of Directors of the
Issuer and his principal occupation is serving as a General Partner at
Cornerstone Management, Inc. The principal business address of Mr.
Gullard is P.O. Box 1203, Menlo Park, California 94026-1203. Mr.
Gullard is a citizen of the United States of America.
Kenneth
Potashner (“Mr. Potashner”) is a nominee for the Board of Directors of the
Issuer and his principal occupation is serving as a director and Chairman of the
Board of Newport Corporation. The principal business address of Mr.
Potashner is 6603 Calle Ponte Bella, Rancho Santa Fe, California
92091. Mr. Potashner is a citizen of the United States of
America.
(d) None
of Messrs. Riley, Gullard or Potashner has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None
of Messrs. Riley, Gullard or Potashner has, during the last five years, been
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
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Item
3.
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Source and Amount of
Funds or Other
Consideration
.
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Item 3 is
hereby amended and restated to read as follows:
The
Shares purchased by DCP, DOF, DAP and DAO were purchased with working capital
(no borrowed funds were used to purchase the Shares, other than any borrowed
funds used for working capital purposes in the ordinary course of business) in
open market purchases. The aggregate purchase cost of the 2,006,000
Shares beneficially owned in the aggregate by DCP, DOF, DAP and DAO is
$6,505,936.77.
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Item
4.
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Purpose of
Transaction.
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Item 4 is
hereby amended to add the following:
On March
4, 2009, in accordance with the terms of the Issuer’s Amended and Restated
By-Laws, DCP delivered a letter to the Issuer nominating Messrs. John Fichthorn,
Riley, Gullard and Potashner, as set forth therein, for election to the Issuer’s
Board of Directors (the “Board”) at the Issuer’s 2009 annual meeting of
stockholders, or any other meeting of stockholders held in lieu thereof, and any
adjournments, postponements, reschedulings or continuations thereof (the “Annual
Meeting”). The Reporting Persons may engage in discussions with the
Issuer, stockholders and others regarding matters in connection with the
Nomination Letter and the Annual Meeting.
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Item
5.
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Interest in Securities
of the Issuer
.
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Item 5 is
hereby amended and restated to read as follows:
The
aggregate percentage of Shares reported owned by each person named herein is
based upon 23,553,019 Shares outstanding, as of January 30, 2009, 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 February 9,
2009.
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(a,
b)
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As
of the date hereof, the Investment Manager may be deemed to be the
beneficial owner of 2,006,000 Shares, constituting approximately 8.5% of
the Shares outstanding.
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The
Investment Manager has the sole power to vote or direct the vote of 0
Shares; has the shared power to vote or direct the vote of 2,006,000
Shares; has sole power to dispose or direct the disposition of 0 Shares;
and has shared power to dispose or direct the disposition of 2,006,000
Shares.
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The
Investment Manager specifically disclaims beneficial ownership in the Shares
reported herein except to the extent of its pecuniary interest
therein.
In
addition, the Investment Manager, as a member of a “group” with the other
Reporting Persons for the purposes of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, may be deemed to be the beneficial owner of
the Shares beneficially owned in the aggregate by the other members of the group
reported herein. The Investment Manager specifically disclaims
beneficial ownership of such Shares, except to the extent of its pecuniary
interest therein.
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(a,
b)
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As
of the date hereof, DCP may be deemed to be the beneficial owner of
317,715 Shares, constituting approximately 1.3% of the Shares
outstanding.
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DCP has
the sole power to vote or direct the vote of 0 Shares; has the shared power to
vote or direct the vote of 317,715 Shares; has sole power to dispose or direct
the disposition of 0 Shares; and has shared power to dispose or direct the
disposition of 317,715 Shares.
DCP
specifically disclaims beneficial ownership in the Shares reported herein except
to the extent of its pecuniary interest therein.
In
addition, DCP, as a member of a “group” with the other Reporting Persons for the
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
may be deemed to be the beneficial owner of the Shares beneficially owned in the
aggregate by the other members of the group reported herein. DCP
specifically disclaims beneficial ownership of such Shares, except to the extent
of its pecuniary interest therein.
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(a,
b)
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As
of the date hereof, DOF may be deemed to be the beneficial owner of
186,221 Shares, constituting less than one percent of the Shares
outstanding.
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DOF has
the sole power to vote or direct the vote of 0 Shares; has the shared power to
vote or direct the vote of 186,221 Shares; has sole power to dispose or direct
the disposition of 0 Shares; and has shared power to dispose or direct the
disposition of 186,221 Shares.
DOF
specifically disclaims beneficial ownership in the Shares reported herein except
to the extent of its pecuniary interest therein.
In
addition, DOF, as a member of a “group” with the other Reporting Persons for the
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
may be deemed to be the beneficial owner of the Shares beneficially owned in the
aggregate by the other members of the group reported herein. DOF
specifically disclaims beneficial ownership of such Shares, except to the extent
of its pecuniary interest therein.
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(a,
b)
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As
of the date hereof, DAP may be deemed to be the beneficial owner of
575,619 Shares, constituting approximately 2.4% of the Shares
outstanding.
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DAP has the sole power to vote or
direct the vote of 0 Shares; has the shared power to vote or direct the vote of
575,619 Shares; has sole power to dispose or direct the disposition of 0 Shares;
and has shared power to dispose or direct the disposition of 575,619
Shares.
DAP
specifically disclaims beneficial ownership in the Shares reported herein except
to the extent of its pecuniary interest therein.
In
addition, DAP, as a member of a “group” with the other Reporting Persons for the
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
may be deemed to be the beneficial owner of the Shares beneficially owned in the
aggregate by the other members of the group reported herein. DAP
specifically disclaims beneficial ownership of such Shares, except to the extent
of its pecuniary interest therein.
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(a,
b)
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As
of the date hereof, DAO may be deemed to be the beneficial owner of
926,445 Shares, constituting approximately 3.9% of the Shares
outstanding.
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DAO has
the sole power to vote or direct the vote of 0 Shares; has the shared power to
vote or direct the vote of 926,445 Shares; has sole power to dispose or direct
the disposition of 0 Shares; and has shared power to dispose or direct the
disposition of 926,445 Shares.
DAO
specifically disclaims beneficial ownership in the Shares reported herein except
to the extent of its pecuniary interest therein.
In
addition, DAO, as a member of a “group” with the other Reporting Persons for the
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
may be deemed to be the beneficial owner of the Shares beneficially owned in the
aggregate by the other members of the group reported herein. DAO
specifically disclaims beneficial ownership of such Shares, except to the extent
of its pecuniary interest therein.
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(a,
b)
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As
of the date hereof, JF may be deemed to be the beneficial owner of
2,006,000 Shares, constituting approximately 8.5% of the Shares
outstanding.
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JF has the sole power to vote or
direct the vote of 0 Shares; has the shared power to vote or direct the vote of
2,006,000 Shares; has sole power to dispose or direct the disposition of 0
Shares; and has shared power to dispose or direct the disposition of 2,006,000
Shares.
JF
specifically disclaims beneficial ownership in the Shares reported herein except
to the extent of his pecuniary interest therein.
In
addition, JF, as a member of a “group” with the other Reporting Persons for the
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
may be deemed to be the beneficial owner of the Shares beneficially owned in the
aggregate by the other members of the group reported herein. JF
specifically disclaims beneficial ownership of such Shares, except to the extent
of his pecuniary interest therein.
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(a,
b)
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As
of the date hereof, LF may be deemed to be the beneficial owner of
2,006,000 Shares, constituting approximately 8.5% of the Shares
outstanding.
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LF has
the sole power to vote or direct the vote of 0 Shares; has the shared power to
vote or direct the vote of 2,006,000 Shares; has sole power to dispose or direct
the disposition of 0 Shares; and has shared power to dispose or direct the
disposition of 2,006,000 Shares.
LF
specifically disclaims beneficial ownership in the Shares reported herein except
to the extent of his pecuniary interest therein.
In
addition, LF, as a member of a “group” with the other Reporting Persons for the
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
may be deemed to be the beneficial owner of the Shares beneficially owned in the
aggregate by the other members of the group reported herein. LF
specifically disclaims beneficial ownership of such Shares, except to the extent
of his pecuniary interest therein.
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(a,
b)
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As
of the date hereof, none of Messrs. Riley, Gullard or Potashner directly
owns any Shares. Each of Messrs. Riley, Gullard and Potashner,
as members of a “group” with the other Reporting Persons for the purposes
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
may be deemed to be the beneficial owner of the Shares beneficially owned
in the aggregate by the other members of the group reported
herein. Each of Messrs. Riley, Gullard and Potashner
specifically disclaims beneficial ownership of such
Shares.
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(c)
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The
trading dates, number of Shares purchased and sold and price per share for
all transactions in the Shares by the Reporting Persons since the filing
of Amendment No. 1 to the Schedule 13D are set forth in Schedule
A. All such transactions were effected in open market
transactions with brokers, except where
indicated.
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(d)
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No
person other than the Reporting Persons is known to have the right to
receive, or the power to direct the receipt of dividends from, or proceeds
from the sale of, the Shares.
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Item
6.
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Contracts,
Arrangements, Understandings or Relationships With Respect to Securities
of the Issuer.
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Item 6 is
hereby amended to add the following:
On March
5, 2009, the Investment Manager, DCP, DOF, DAP, DAO, JF, LF and Messrs. Riley,
Gullard and Potashner (collectively the “Group”) entered into a Joint Filing and
Solicitation Agreement in which, among other things, (a) the Group agreed to the
joint filing on behalf of each of them of statements on Schedule 13D with
respect to the securities of the Issuer, (b) the Group agreed to solicit proxies
or written consents for the election of the persons nominated by DCP to the
Board at the Annual Meeting (the “Solicitation”), and (c) DCP agreed to bear all
expenses incurred in connection with the Group’s activities, subject to certain
limitations. A copy of this agreement is attached hereto as Exhibit
99.1 and is incorporated herein by reference.
Pursuant
to letter agreements, DCP has agreed to indemnify Messrs. Riley, Gullard and
Potashner against any and all claims of any nature arising from the Solicitation
and any related transactions. A form of the indemnification letter
agreement is attached hereto as Exhibit 99.2 and is incorporated herein by
reference.
For its
services in connection with the matters described herein, DCP has orally agreed
to pay B. Riley & Co. a $25,000 monthly retainer for a period of three
months, expiring at the end of February 2009, and a $100,000 success fee if a
nominee of DCP is elected to serve on the Board of the Issuer. B.
Riley & Co. would also be entitled to a $100,000 fee based upon the return
on DCP’s investment in the Issuer, to be agreed upon by the
parties. Mr. Riley is the Chairman and sole indirect equity owner of
B. Riley & Co.
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Item
7.
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Material to be Filed
as Exhibits.
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Item 7 is
hereby amended to include the following exhibits:
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Exhibit
99.1
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Joint
Filing and Solicitation Agreement by and among Dialectic Capital
Management, LLC, Dialectic Capital Partners, LP, Dialectic Offshore, Ltd.,
Dialectic Antithesis Partners, LP, Dialectic Antithesis Offshore, Ltd.,
John Fichthorn, Luke Fichthorn, Bryant Riley, J. Michael Gullard and
Kenneth Potashner, dated March 5,
2009.
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Exhibit
99.2
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Form
of Indemnification Letter
Agreement.
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SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
Dated:
March 6, 2009
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DIALECTIC
CAPITAL PARTNERS, LP
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By:
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Dialectic
Capital, LLC, its general partner
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By:
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Name:
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John
Fichthorn
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Title:
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Managing
Member
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DIALECTIC
CAPITAL MANAGEMENT, LLC
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By:
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Name:
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John
Fichthorn
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Title:
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Managing
Member
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DIALECTIC
OFFSHORE, LTD.
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By:
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Name:
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John
Fichthorn
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Title:
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Director
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DIALECTIC
ANTITHESIS PARTNERS, LP
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By:
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Dialectic
Capital, LLC, its general partner
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By:
|
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Name:
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John
Fichthorn
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Title:
|
Managing
Member
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DIALECTIC
ANTITHESIS OFFSHORE, LTD.
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By:
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Name:
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John
Fichthorn
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Title:
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Director
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SCHEDULE
A
Transactions in the Shares
Since the Filing of Amendment No. 1 to the Schedule 13D
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Shares
of Common Stock
Purchased/(Sold)
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Price
Per
Share($)
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Date
of
Purchase/Sale
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DIALECTIC CAPITAL PARTNERS,
LP
NONE
DIALECTIC OFFSHORE,
LTD.
NONE
DIALECTIC ANTITHESIS
OFFSHORE, LTD.
NONE
DIALECTIC ANTITHESIS
PARTNERS, LP
NONE
DIALECTIC CAPITAL
MANAGEMENT, LLC
NONE
JOHN
FICHTHORN
NONE
LUKE
FICHTHORN
NONE
BRYANT
RILEY
NONE
KENNETH
POTASHNER
NONE
J. MICHAEL
GULLARD
NONE