Qualstar Corporation (NASDAQ: QBAK), a manufacturer of data storage
solutions and high-efficiency power supplies, today announced that
Glass Lewis & Co., a leading independent proxy advisory
service, has recommended to its clients that shareholders vote the
WHITE proxy card
FOR
all five of the Qualstar Board of Directors' very experienced and
highly qualified director nominees,
Allen H.
Alley, Chester Baffa, Lawrence D. Firestone, Gerald J. Laber and
Daniel C. Molhoek, at Qualstar's Annual Meeting of
Shareholders to be held on June 28, 2013. Glass Lewis' clients
include institutional investors, mutual funds, pension funds and
other fiduciaries.
In recommending that shareholders vote the WHITE proxy card FOR all five of
the director nominees recommended by the Qualstar Board, Glass
Lewis recognized that the replacement of the entire Qualstar Board
being sought by BKF Capital Group, Inc. (OTCQB: BKFG) and its
controlling shareholder, Steven N. Bronson, was unwarranted. Glass
Lewis also took note of the substantial changes that have been made
to the composition of the Qualstar Board and management team over
the past year. If shareholders elect the Qualstar Board's highly
qualified and very experienced nominees -- Allen
H. Alley, Chester Baffa, Lawrence D. Firestone, Gerald J. Laber and
Daniel C. Molhoek, the entire membership of the Qualstar
Board, other than Mr. Firestone, Qualstar's Chief Executive
Officer, will have been replaced since the 2012 Annual Meeting.
The Glass Lewis report also recommended that shareholders vote
the WHITE proxy card FOR the ratification of a shareholder rights plan
adopted by the Qualstar Board following the commencement by BKF and
Mr. Bronson of its unsolicited, coercive, partial tender offer last
January. While BKF's and Mr. Bronson's abrupt termination of their
unsolicited, coercive, partial tender offer eliminated the need for
the Qualstar Board to make a recommendation at the time, it was the
unanimous view of the Qualstar Board that the partial tender offer
was inadequate and was not in the best interests of Qualstar and
all of its shareholders. In recommending that shareholders vote the
WHITE proxy card FOR
the ratification of the shareholder rights plan, the Glass Lewis
report stated:
"Although we would ordinary recommend that shareholders vote
against the adoption of a poison pill, here, we recognize that the
Company was facing some mitigating circumstances. Specifically, had
the Partial Offer been completed and fully subscribed, BKF would
have owned over 43% of the Company's common stock, giving them
significant voting power over all matters requiring shareholder
approval. Further, we believe that the Partial Offer could have
been detrimental to non-tendering shareholders, as they would have
been left holding an illiquid equity stake in a company effectively
controlled by BKF. In our view, the Partial Offer would not have
treated all Qualstar shareholders in an equitable manner. In light
of this issue, coupled with the relatively low market premium
implied by the Partial Offer (14.7%), we believe that the
implementation of the Rights Agreement here was a reasonable course
of action for the board to take. It's also worth noting that the
Rights Agreement only has a term of one year (expiration date of no
later than January 31, 2014), which we believe is acceptable. In
light of these factors, we believe that the proposed Rights
Agreement is in the best interests of shareholders."
"We are very pleased that a well-respected, independent third
party such as Glass Lewis has carefully reviewed the voting
alternatives and recommends that shareholders vote for Qualstar's
director nominees, selected by Qualstar for their extensive
governance experience and outstanding qualifications," said
Lawrence D. Firestone, Qualstar's President and Chief Executive
Officer. "We are also gratified that the Glass Lewis report
supports the decision of our Board, after careful consideration, to
adopt a rights plan so as to protect our shareholders against BKF's
and Mr. Bronson's unsolicited, coercive, partial tender offer. This
Board and our nominees remain committed to taking the actions
necessary to protect our shareholders against abusive or coercive
tactics used by a potential acquirer seeking to gain control of
Qualstar without paying all shareholders a fair price for their
shares."
To protect the value of their investment, Qualstar strongly
recommends that all shareholders vote for their Board's highly
qualified nominees on the WHITE proxy card
TODAY -- by telephone, Internet, or by signing, dating and
returning the WHITE proxy card.
Shareholders that need assistance in voting their shares or have
any questions are urged to call Qualstar's proxy solicitor,
Mackenzie Partners, Inc., at (800) 322-2885 (Toll Free) or at (212)
929-5500.
About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics
manufacturer specializing in data storage and power supplies.
Qualstar's products are known throughout the world for high quality
and Simply Reliable designs that provide years of trouble-free
service. More information is available at www.qualstar.com or
www.n2power.com or by phone at 805-583-7744.
Cautionary Statement Concerning Forward-Looking
Statements This press release contains forward-looking
statements relating to expectations, plans or prospects for
Qualstar Corporation that are based upon the current expectations
and beliefs of Qualstar's management and are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements. Notwithstanding changes that may occur with respect to
matters relating to any forward looking statements, Qualstar does
not expect to, and disclaims any obligation to, publicly update any
forward-looking statements whether as a result of new information,
future events or otherwise. Qualstar, however, reserves the right
to update such statements or any portion thereof at any time for
any reason. In particular, the following factors, among others,
could cause actual or future results to differ materially from
those suggested by the forward-looking statements: Qualstar's
ability to successfully execute on its strategic plan and meet its
long-term financial goals; Qualstar's ability to successfully
implement and recognize cost savings; Qualstar's ability to develop
and commercialize new products; industry and customer adoption and
acceptance of Qualstar's new products; Qualstar's ability to
increase sales of its products; the rescheduling or cancellation of
customer orders; unexpected shortages of critical components;
unexpected product design or quality problems; adverse changes in
market demand for Qualstar's products; increased global competition
and pricing pressure on Qualstar's products; and the risks related
to actions of activist shareholders, including the amount of
related costs.
For further information on these and other and other cautionary
statements, please refer to the risk factors discussed in
Qualstar's filings with the U.S. Securities and Exchange Commission
including, but not limited to, Qualstar's Annual Report on Form
10-K for the fiscal year ended June 30, 2012, the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of such Form 10-K, and any subsequently filed
reports. All documents also are available without charge through
the SEC's website (www.sec.gov) or from Qualstar's website
(www.qualstar.com).
Additional Information and Where To Find
It
In connection with its 2013 Annual Meeting of Shareholders,
Qualstar has filed a definitive proxy statement and a WHITE proxy card with the SEC on June 4, 2013, and has
mailed the definitive proxy statement and WHITE proxy card to its shareholders. WE URGE INVESTORS
AND SHAREHOLDERS TO READ THE DEFINITIVE PROXY STATEMENT AND
WHITE PROXY CARD FOR THE 2013 ANNUAL MEETING
OF SHAREHOLDERS (INCLUDING ANY SUPPLEMENTS THERETO) AND ANY OTHER
RELEVANT DOCUMENTS THAT QUALSTAR WILL FILE WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Shareholders will be able to obtain, free of charge, copies of the
definitive proxy statement and any other documents filed by
Qualstar with the SEC in connection with the 2013 Annual Meeting at
the SEC's website (www.sec.gov), at Qualstar's website
(www.qualstar.com) or by writing to Mr. Lawrence D. Firestone,
President and Chief Executive Officer, Qualstar Corporation, 3990-B
Heritage Oak Court, Simi Valley, CA 93063. In addition, copies of
the definitive proxy materials may be requested from the Company's
proxy solicitor, MacKenzie Partners, Inc., 105 Madison Avenue, New
York, NY 10016 or toll-free at (800) 322-2885.
Certain Information Regarding Participants in
the Solicitation Qualstar, its directors, nominees for
director and certain officers, employees and other persons are
deemed to be participants in the solicitation of proxies from
shareholders in connection with the 2013 Annual Meeting of
Shareholders. Information regarding the interests of such
participants is included in the definitive proxy statement and
other relevant documents filed and to be filed by Qualstar with the
SEC in connection with the proxy solicitation.
For more information, contact: Mark H. Harnett / Paul
Schulman MacKenzie Partners, Inc. (212) 929-5500 Vanessa Lehr /
Annie Leschin Investor Relations StreetSmart Investor Relations
(415) 775-1788
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