UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Under Rule 14a-12
Forgent Networks, Inc.
108 Wild Basin Road, Austin, Texas 78746
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
The Red Oak Fund, LP, a Delaware limited partnership;
Pinnacle Fund, LLLP, a Colorado limited liability limited partnership;
Bear Market Opportunity Fund, L.P., a Delaware limited partnership;
Pinnacle Partners, LLC, a Colorado limited liability company;
Red Oak Partners, LLC, a New York limited liability company;
David Sandberg.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0 11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
In connection with the annual meeting of Forgent Networks, Inc. (the "Company")
scheduled to be held on July 30, 2009, Pinnacle Fund, LLLP ("Pinnacle") has
nominated a slate of directors in opposition to the nominees proposed by the
Company. Pinnacle may share copies of certain correspondence between it and
the Company with other holders and is issuing a press release expressing
certain concerns. Therefore, Pinnacle is filing such correspondence and press
release pursuant to Rule 14a-12.
Red Oak Partners, LLC offers the following timeline and history regarding all
of its communication with or regarding ASUR since the Go-Private effort was
rejected by shareholders and the special meeting was canceled by Asure
Software's Board:
On June 3, 2009, Richard Snyder of Asure Software ("ASUR") called David
Sandberg of the Pinnacle Fund LLLP ("Pinnacle") and informed him that ASUR's
directors would be willing to consider a presentation from Red Oak's nominees
regarding their intended business plan, pursuant to which discussions regarding
whether certain of Red Oak's nominees could be added to the Company's
recommended slate for the upcoming election of Directors would be made (by
ASUR's current directors). Mr. Sandberg informed Mr. Snyder that 1)
presentations to a Board were highly uncommon in these instances, 2) that he
believed his slate had far greater shareholder support, and 3) that he sought
replacement of the entire Board but that in the interest of avoiding another
costly proxy fight he would do everything he could to facilitate a productive
meeting. After coordinating with his nominees, on June 3 Mr. Sandberg sent an
email communication to Mr. Snyder with recommended logistics for such a
meeting, which is attached as Exhibit A.
Attached as Exhibit B is Mr. Snyder's June 4 reply via email in which he
suggested alternative meeting dates and locations, and attached as Exhibit C is
Mr. Sandberg's June 4 reply issued later that same day. Also on June 4,
Pinnacle Fund and Red Oak Partners issued a press release thanking ASUR
shareholders for their support in defeating the Go-Private effort attempted by
ASUR's management and Board. In the press release, Pinnacle and Red Oak also
expressed their interest in working with ASUR's Board "as soon as possible
towards cost reductions and Board elections." This press release is attached
as Exhibit D. There was no further response or communication to Mr. Sandberg's
June 4 email from ASUR or Mr. Snyder.
In an effort to attempt to work with ASUR's management and Board and "to not
have to engage ASUR in another costly proxy contest" (as stated explicitly in
Pinnacle' June 4 press release), Mr. Sandberg called Mr. James Gladney and
asked that he attempt to set up further dialogue through ASUR Director Lou
Mazzuchelli, who Mr. Gladney knew through common acquaintances. Mr. Gladney
informed Mr. Sandberg that he had spoken with Mr. Mazzuchelli, who had
expressed that ASUR's Board and Mr. Snyder were upset at Red Oak's June 4 press
release, that the Go-Private vote was not nearly as decided as the press
release had stated, and that they believed Red Oak had a side agenda to take
control of ASUR. After five days had elapsed without formal response from ASUR
since Mr. Sandberg's last email communication, on June 9 Mr. Sandberg issued a
follow-up email to Mr. Snyder directly addressing all three of these issues.
The email also provided detail as to what Mr. Sandberg's recommended course of
action to a new Board would be, additional background as to the complementary
capabilities of Red Oak's nominees, and still requested a meeting, inclusive of
a conference call that coming weekend. This June 9 email communication is
attached as Exhibit E. Attached to this communication was the final Go-Private
vote tally for non-objecting beneficial holders as provided from Broadridge to
Pinnacle. This tally is attached as Exhibit F.
Two days later, on June 11, Mr. Snyder's communication was emailed to Mr.
Sandberg through another ASUR employee (Lisa Flynn). In the communication, Mr.
Snyder referred to Red Oak's "efforts to gain control without paying a
premium," which Mr. Sandberg had thought he had assuaged by the very fact that
Red Oak employees only represented two of the six nominees and that there were
no other affiliations with any of the other nominees, three of whom had come
from other large shareholders. Accordingly, it would be impossible for Red Oak
to control ASUR's Board if its slate was elected. This communication is
attached as Exhibit G.
On June 12, Mr. Sandberg replied to Mr. Snyder's email and reiterated that
there was no search for control. He also stated "We do not agree that you have
an "effective strategy" and because of this, we are not confident that the
existing directors have any ability to carry out long-term profitability or to
maximize shareholder value. Further, our prior communications detailed a
comprehensive process for review as well as plans to reduce excessive
management compensation, excessive provider costs, and to enact a reverse split
coupled with a stock repurchase plan in order to maintain a NASDAQ listing and
to provide for potentially accretive share repurchases." Lastly, he informed
Mr. Snyder of his intent to submit a 220 demand letter requesting access to
ASUR information which he believed shareholders had a right to know, regarding
company expenses and the Go-Private vote count. This email is attached as
Exhibit H.
On June 15, Red Oak faxed and couriered the 220 demand letter, attached as
Exhibit I, which requires that information be provided within five business
days. Also attached to this demand letter was a true and correct copy of a DTC
report showing the Pinnacle Fund is the holder of record of 500,000 shares as
of May 15, 2009, attached as Exhibit J.
On June 18, ASUR held its earnings call. No questions were asked on the call,
and on June 19, Mr. Sandberg issued a communication, attached as Exhibit K,
asking: 1) for confirmation that ASUR intended to comply with the 220 demand
request, 2) why shareholders were not allowed to ask questions on the June 18
earnings call and informing ASUR that Red Oak knew of at least six individuals
who were unable to ask questions (only one of which was affiliated with Red Oak
or Pinnacle), and 3) ASUR to correct its public filings to include shares owned
by the Fenil Shah group per its May 28 Schedule 13D Filed with the SEC.
Finally, on June 22 Mr Sandberg issued an email communication directly to ASUR
director Lou Mazzuchelli. This communication, attached as Exhibit L, asked why
shareholders had not been permitted to ask questions on the June 18 call and
stated "As a large shareholder, communication with the management team of a
company I have invested real dollars with is of great importance, especially
given the expectation for this type of communication on at least a quarterly
basis. Given the contested proxy, I am happy to have Red Oak and Pinnacle
employees abstain from asking questions so as to not place Asure's management
in difficult situations facing tough questions from us in a public forum.
Again, our interest is in allowing shareholders as a whole to ask questions
about a company which they collectively own." No one at ASUR including Mr.
Snyder and Mr. Mazzuchelli responded to this or to any communication since June
11.
Attached as Exhibit M is ASUR's general counsel Mark Johnson's (from the firm
Winstead P.C.) June 22 letter issued to Pinnacle's legal counsel, Pete Tennyson
of Paul, Hastings, Janofsky, & Walker LLP stating "the Company will not be
providing Pinnacle access to the Company's books and records and other
documents as demanded." Attached as Exhibit N is Mr. Tennyson's June 24
response to Mr. Johnson, informing him of why the request was applicable and
citing relevant cases, finishing with "If the Company has an appropriate and
compelling reason to keep specific elements of the requested information
confidential, Pinnacle is willing to discuss these concerns. However, a
general denial of access to all information is not acceptable." On June 25,
Mr. Johnson issued Mr. Tennyson a letter (attached as Exhibit O) claiming "The
cases you cited as authority for your position are clearly off point. Given
that, I'm not sure what else need be said."
On June 29, Pinnacle Fund sent a letter to ASUR - attached as Exhibit P -
asking them to initiate another call to allow shareholders to ask questions
about the company, calling for disclosure of information, and rejecting ASUR's
assertion that Pinnacle is "attempting to seize control of your Company without
a tender offer," as alleged in ASUR's June 17 press release. Also, on June 29
Pinnacle Fund and Red Oak Partners issued a press release reporting that it had
sent ASUR the letter attached as Exhibit N and requested that ASUR re-open the
earnings call, provide transparency regarding information which Pinnacle
believes shareholders have a right to know, and re-stated that it was not
seeking control of ASUR and that its slate of six nominees consisted of just
two employees of Red Oak or Pinnacle. This press release is attached as
Exhibit Q.
Pinnacle intends to file a definitive proxy statement soliciting votes for
Pinnacle's nominees to the Company's board of directors. Pinnacle is not
asking you at this time to vote on its slate of directors. Once Pinnacle's
definitive proxy statement for the annual meeting becomes available, Pinnacle
strongly advises stockholders to carefully read that definitive proxy
statement, as it will contain important information. Information concerning
Pinnacle and any other persons deemed participants in Pinnacle's solicitation
of proxies from stockholders in connection with the annual meeting will be
available in Pinnacle's definitive proxy statement for the annual meeting.
Once Pinnacle's definitive proxy statement for the annual meeting becomes
available, stockholders will be able to obtain, free of charge, copies of that
statement and any other documents Pinnacle files with or furnishes to the
Securities and Exchange Commission through the Securities and Exchange
Commission's website at www.sec.gov.
From: David Sandberg Sent: Wednesday, June 03, 2009 10:36 PM To: 'Richard Snyder' Cc: 'l.mazz@verizon.net'; 'James S. Gladney' Subject: meeting with Board nominees Richard, Again, we appreciate you reaching out and opening the channels of communication which we believe are essential in situations like this. I spoke with my Board nominees and note a few comments: 1. timeliness is important, especially as we attempt to cooperate and avoid another costly and public proxy contest 2. Pinnacle's nominees are almost entirely in the northeast with the exception of Bob Graham Given at least one of your Board members (Lou Mazzuchelli) is also in the northeast, I suggest we meet in Boston next Wednesday at 11am or 12pm, pending your agreement. Thus far, at least five of our nominees can attend a meeting there as well as large shareholders (such as Fenil and Snehal Shah and James Gladney) such that over 20% of ASUR's common stock outstanding would be present (on top of your 2% stake). This would represent an appropriately heavily attended meeting with respect to share ownership, which we believe is appropriate given the seriousness of our discussion as we - together - consider next steps for Asure. It'd be greatly appreciated if you can confirm if next Wednesday works on your end. We can also do 1 or 2pm if flight times from Austin result in later arrivals. Kind regards and thanks again for initiating communication in a constructive manner, David David Sandberg Portfolio Manager Red Oak Partners, LLC dsandberg@redoakpartners.com (212) 614-8952 direct (646) 773-6277 cell (646) 390-6784 fax 654 Broadway, Suite 5 New York , NY 10012
From: Richard Snyder [mailto:Dick_Snyder@asuresoftware.com] Sent: Thursday, June 04, 2009 1:55 PM To: David Sandberg Cc: l.mazz@verizon.net; James S. Gladney Subject: RE: meeting with Board nominees David, The Board appreciates your response and offer to host a meeting. We feel that it is very important that a majority of the Board be present to hear your plan so that they can be fully informed as we make decisions regarding the Proxy process going forward. Unfortunately, with other commitments we cannot get enough members to Boston next week. We can, however, offer the following: 1. Meet in Boston per your request on Wednesday, June 17. 2. Meet in Dallas on Tuesday, June 9. While it would be desirable to meet various members of your proposed slate of directors, the Board communicated their first priority as hearing the substance of your proposed business plan. We know that the logistics of any venue and meeting date for a sizable group is problematic. Please let me know your preference. Regards, Dick Richard Snyder Chairman / CEO Asure Software 512 437 2704
From: David Sandberg Sent: Thursday, June 04, 2009 4:33 PM To: 'Dick_Snyder@asuresoftware.com' Cc: 'l.mazz@verizon.net'; 'jim@libertycapitalpartners.com' Subject: Re: meeting with Board nominees Dick: I appreciate the proposal but June 17 does not work, both for logistics and timing reasons. And schedules prevent going to Dallas on the 9th. Please reach out to your group and try to get as many of them as possible to meet in Boston next week. We could arrange for conference telephone facilities for folks who cannot attend in person, if that helps. I could probably get several of my nominees to meet someplace a bit closer for you, such as NY or Chicago, which would both have flight schedules such that we would not need to lose more than a day. I think it is important for us to have a candid discussion, rather than a series of emails, as soon as possible. Even though I know of solid support for our slate, I'd prefer to avoid additional expense and delay, and a public airing of issues. As a stockholder, I'd like to keep any public controversy to a minimum because it can bother employees and customers. That said, we are prepared to seek a vote so we can begin our recovery efforts. In that regard, while we try to put together a meeting, I'd appreciate confirmation that Asure will provide me a copy of the record date holder list and any NOBO or DTC listings it obtains without the need for me to file a formal request letter and include it in SEC filings. Our press release of today says we are interested in discussion to work issues out, and we'd like to avoid the need for additional filings that increase the sense of controversy. I am available if you want to discuss the timing and logistics of a meeting by telephone. just give me a proposed time and number or try me at 646 773 6277. Regards, David
For Immediate Release
Red Oak Partners and Pinnacle Fund Thank Asure Holders for Support in
Successful Proxy Contest, Hope to Work with Asure Software to Enact Appropriate
Change in the Interests of Shareholders
NEW YORK, New York, June 4, 2009. Pinnacle Fund (controlled by Pinnacle
Partners, LLC which is partly controlled by Red Oak Partners, LLC) today
thanked the stockholders of Asure Software ("ASUR" or the "Company") for their
support of Pinnacle's successful efforts to oppose Asure's Go-Private
proposals. Pinnacle noted that, although only Asure has access to full voting
results and proxies could have been revoked, according to the information
available to Pinnacle more than 44% of the shares voted outright against the
Go-Private proposals and another 5% abstained. Further, Pinnacle was informed
that in addition approximately another 3% of shares voted or planned to vote
against the proposals as well, resulting in an estimated 52% to 32% margin of
victory.
David Sandberg, the portfolio manager of the Pinnacle Fund, stated, "We are
pleased with the outcome but disappointed with the process because we believe a
significant amount of shareholder money was wasted on this effort and this
could have been avoided. Pinnacle kept its expenses to a minimum while Asure's
solicitation effort, which - according to numerous shareholders who contacted
Pinnacle - included as many as four phone calls per shareholder from Asure's
proxy solicitors, appears to have imposed a significant cost on the Company and
its shareholders. As an already large shareholder at the time, we openly
expressed our concerns to management regarding the Go-Private efforts,
beginning the day it was announced in January. They initially informed us that
we were the only shareholders to oppose this effort, something we did not
believe (clearly we were right). Nevertheless, we are happy to see the
proposals voted down and appreciate ASUR's Board at least canceling its special
meeting to save some costs." Mr. Sandberg continued, "Sometimes change is good,
whether it be at a successful or a struggling company. I believe shareholders
have a clear interest in pursuing a different direction. This is not so much a
criticism of management as it is a preference to pass the torch, and to this
effect, we recently named a superb slate of Board candidates which includes two
prior Board members of Iemployee who served while it was a thriving and growing
company; two individuals with a history of successfully building and growing
technology companies and two representatives from Red Oak who possess
significant public market and micro-cap knowledge and have a highly vested
interest in Asure's success. We are excited with our slate, believe that change
is both wanted by Asure's shareholders and is a good thing, and hope that
Asure's management and Board will consider that their duty is to represent the
best interests of their shareholders and recognize it's their shareholders who
are pursuing this. Although clearly prepared to do so, we hope to not have to
engage ASUR in another costly proxy contest and instead wish to work with its
Board as soon as possible towards cost reductions and Board elections."
If you have further questions please contact David Sandberg at (212) 614-8952
or dsandberg@redoakpartners.com.
Pinnacle intends to file a definitive proxy statement soliciting votes for
Pinnacle's nominees to the Company's board of directors. Pinnacle is not asking
you at this time to vote on its slate of directors. Once Pinnacle's definitive
proxy statement for the annual meeting becomes available, Pinnacle strongly
advises stockholders to carefully read that definitive proxy statement, as it
will contain important information. Information concerning Pinnacle and any
other persons deemed participants in Pinnacle's solicitation of proxies from
stockholders in connection with the annual meeting will be available in
Pinnacle's definitive proxy statement for the annual meeting. Once Pinnacle's
definitive proxy statement for the annual meeting becomes available,
stockholders will be able to obtain, free of charge, copies of that statement
and any other documents Pinnacle files with or furnishes to the Securities and
Exchange Commission through the Securities and Exchange Commission's website at
www.sec.gov.
From: David Sandberg Sent: Tuesday, June 09, 2009 10:39 PM To: 'Richard Snyder' Cc: 'James S. Gladney'; 'l.mazz@verizon.net' Subject: follow up communication Dick: The lack of communication since my email to you last Thursday suggests that you have either been unable to find a date and time that works for our mutual schedules or are no longer interested in attempting to work together. I have also heard through the grapevine (if you will) a) that you were upset with last Thursday's press release thanking shareholders for their votes against the Go-Private; b) that you believe the vote was much closer than we stated in that press release; and c) that you are concerned we at Red Oak and Pinnacle have a side agenda. I prefer to be open and direct so I'd like to address these head-on: 1. At the time you called me last Wednesday, the first words I said to you were "good timing, I was just drafting a press release," which is exactly what I was doing at the time. In my experience, it's standard to issue such a release thanking shareholders for their support and to re-state our beliefs, especially given the potential for another proxy campaign. Beyond this, I suspect your side would have done the same thing had the results been different. More importantly, our release, although necessary to preserve our position, has absolutely nothing to do with our openness to working together. In fact the very title of our press release included our interests in working with Asure's Board and management. Our goal remains to try to create value-this was not just industry "jargon". We have real dollars invested here and are intent on value creation. 2. Regarding the vote, we would not have made the statements we did without support. The last results we received from Broadridge include complete NOBO results and are attached to this email as a courtesy. As you can see, according to Broadridge greater than 44% of the votes they tallied were cast AGAINST the Go-Private proposals while fewer than 32% were cast in favor. Importantly, even proposal 3 was outvoted by a wide margin. Not included in this report was Bob Graham - voting on behalf of record holder Global Accelerator as well as shares held in his name - who indicated he voted nearly 900,000 shares AGAINST all proposals, adding roughly 3% to the AGAINST count. Additionally, Fenil Shah informed us that on Sunday night, May 31, he voted roughly 5% of all of ASUR's shares outstanding AGAINST all proposals. As his vote was not reflected in Broadridge's report, we omitted his shares when computing the figures used in our press release. Given the aggregate votes among record holders was negligible exclusive of votes controlled by Bob Graham or Fenil Shah and given that there is always a very real percentage of shares outstanding which do not vote, we see no plausible reasoning to indicate that all proposals were not defeated by the percentages we detailed in our press release. In fact, we believe that had our proxies been mailed with any greater advance time (please note they will be mailed with significantly more advance time in any upcoming vote) the votes would have swayed even further AGAINST all proposals. This is evidenced by the fact that ASUR lost a full 3% of its FOR votes in the less than two day period from Friday, May 29 through the end of Monday, June 1st which coincided perfectly with shareholders receiving our proxy mailings on the afternoon of Friday, May 29. If you still think we are wrong on our numbers I'd be glad to review your information, but it's more important in our view to see if we can work together going forward. 3. We have repeatedly stated there is no side agenda. Significant information about our goals already has been made publicly available by us through SEC filings. We don't know each other well so if you question us then that's entirely reasonable - but I would hope you could review what we have said before forming opinions which materially factor into decisions affecting all of ASUR"s shareholders. If you can't find the information please call me and I will direct you to it because I want you to reach an independent and informed opinion. Further, if your concern about a "side agenda" is making you reluctant to cooperate with us and other large shareholders then I'd also ask you to research the Female Health Company, of which we own 6% and have always supported management including in public conference calls. We are not an openly hostile firm - we want to pursue the right things for value creation. Our preference is to avoid a fight, yet we are unwilling to move away from decisions we firmly believe give ASUR the best chance to succeed going forward, such as electing an entire new slate of qualified, experienced, successful, and highly vested directors. So with all of this said, where do we go from here? First, we are fully prepared to pursue a proxy solicitation for Board elections and remain extremely confident we will win. As opposed to our opposition to the Go-Private, we will mail our proxies well in advance of the vote and expect this to have a materially positive impact on voting results beyond what was witnessed in the Go-Private votes. In a solicitation for Board votes we will reach out to far more individual investors as well. The current Board and members of senior management have been in place a long time, and - without disrespect - have had a tough time of it with significant accumulated net losses in the tens of millions. We need not remind you that almost every institution voted against ASUR and most message boards indicate that individual investors are thoroughly unhappy with the 90% decline in stock value since the time most Board members joined the company. Additionally, both leading advisory services recommended voting AGAINST all proposals and regularly support Board slates comprised of highly vested directors via direct share ownership. Clearly you must recognize that many stockholders believe things need to change, and I don't believe you'd have contacted me last Wednesday if you were not open to this. So I'd like to discuss what we can do to achieve this while avoiding a public fight and instead upholding the best interests of shareholders. Let's talk this week and take steps forward - I assume we are both highly prepared to engage in another proxy fight but perhaps we can work together in areas where it remains appropriate, including: * You have asked us to "present" to ASUR's Board. We are dissatisfied with ASUR's Board, which we note is one member smaller via Mrs. Cote's recent resignation. We instead want ASUR's Board to present to its largest shareholders. I'll give you my views, and as noted below try to set up some means of dialogue. * You want us to fly to Dallas or Austin, we'd like you to come to the Northeast. We note that a) 4 of ASUR's largest shareholders recently flew on very short notice to Dallas to meet with ASUR's board and management on April 27, where only two Board members showed up and the two members of management showed up hours late; b) our entire slate is in the Northeast and perhaps more importantly, a significant concentration of ASUR's shareholders and thus owners of the Company are in the Northeast and would wish to attend this meeting; and c) one of your directors resides in the Northeast and following Mrs. Cote's resignation this leaves just yourself and 3 other directors who would need to travel here. It makes more sense to come here. Proposed Approach: I am traveling all of next week which is why I had hoped for us to meet as soon as possible in the area where we could have the greatest attendance. If you, Lou Mazzuchelli, and whatever other Directors are able to fly to Boston this Thursday or Friday then we could hold a useful meeting. We could also conference in any directors unable to attend. If this is simply not doable, then I believe a lengthy conference call among you, Lou Mazzuchelli, Jim Gladney, and me would still be of great value. I am available this weekend as well and willing to meet or speak then. I understand the desire of your board to meet the others I will nominate in person or by telephone and we can try to set up such a meeting while I am out of town if it seems helpful. To help you evaluate the agenda I'd propose, although we should both recognize that our proposed slate of nominees is independent and will have its own views, some of which may differ from what I am saying below, I have provided below what my recommendations to the Board will be, but want to note that these recommendations to ASUR's Board would need to involve a full assessment of the Company's strengths, weaknesses, costs, assets, and liabilities, involving detailed presentations from the CEO, CFO, and COO regarding: * all company expenses and costs across all employees, by location and product (Netsimplicity vs. Iemployee) * all costs not related directly to Netsimplicity and Iemployee products, ie public costs * all legal liability related to the $3mm liability and suit * the $5mm lease obligation and structure for ASUR's 50% equity ownership in the building * ability to use tax loss carryforwards per rule 382 IRS calculation * all costs related to legal providers * all costs related to the audit * all costs related to added employee benefits, inclusive of cooper clinic costs, etc * all severance and change of control packages and liabilities * the D&O policy for purposes of drastically reducing it * all consulting fees and agreements related to insiders or board members * consideration to implement a reverse split to regain NASDAQ compliance, my recommendation is 8 for 1 resulting in nearly 4 million shares outstanding and a $1.45 per share price as of today...may consider 10 for 1 but decision to be made by new Board with vested ownership * consideration to implement a share repurchase program of $5mm. If traders wish to trade ASUR stock down after the reverse split (as many do- common trading phenomenon as traders see a reverse split rightfully as a sign of weakness), this allows for extremely accretive while also ensuring ASUR's stock price stays above $1/share for NASDAQ listing compliance. For the math, buying stock at $1/share equates to buying at 12.5c today - easily compelling in my opinion * depending on the 382 calculation and NOL viability data we get, consider implementing an NOL-oriented poison pill limiting shareholders to no greater than 4 to 4.9% ownership in the stock (grandfathered in for those already above 5%). This is to protect ASUR's ability to use its tax losses. In total, I would expect this review to produce material reductions in headcount, compensation, public costs, and provider costs. I'd want to discuss these issues with you, and hope you would support these efforts and would note that we have a superb and complementary mix among our Board nominees: - - Pat Goepel has direct Iemployee usage experience as a large customer and possesses sizable payroll industry experience. He was the person at Ceridian responsible for bringing the Iemployee business to them - - Bob Graham (along with Mr. Goepel) was an Iemployee Board member and has an extensive and successful past technology background with both large and small companies - - Neil Ferris has operational expertise in technology companies and a successful history of running and building technology businesses inclusive of selling them for hundreds of millions of dollars - - Jeff Vogel has a successful record of building, growing, and running technology businesses - - Adrian Pertierra and I have significant public market and financial experience and will keep the Board ROI and $s/ costs-focused while shouldering the load on public company and corporate finance issues. Please let me know your thoughts about trying to hold a meeting or call in the near-term. I think a discussion would be much more productive than emails and I apologize for the length of this message. Regards, David David Sandberg Portfolio Manager Red Oak Partners, LLC dsandberg@redoakpartners.com (212) 614-8952 direct (646) 773-6277 cell (646) 390-6784 fax 654 Broadway, Suite 5 New York , NY 10012
MacKenzie Partners, Inc. June 2, 2009 FORGENT NETWORKS, INC. Special Meeting June 2, 2009 Total Outstanding 31,106,298 Quorum 80.13% Prop 1 - Reverse Stock Split For Against Abstain Total Voted Shares Voted: 9,815,953 13,846,051 1,264,871 24,926,875 % of O/S 31.56% 44.51% 4.07% 80.13% % of Voted 39.38% 55.55% 5.07% Prop 2 - Forward Stock Split For Against Abstain Total Voted Shares Voted: 9,871,348 13,779,401 1,276,126 24,926,875 % of O/S 31.73 44.30% 4.10% 80.13% % of Voted 39.60% 55.28% 5.12% Prop 3 - Adjourn Meeting For Against Abstain Total Voted Shares Voted: 9,946,790 13,617,182 1,362,903 24,926,875 % of O/S 31.98% 43.78% 4.38% 80.13% % of Voted 40% 55% 5%
From: Lisa Flynn [mailto:lisa_flynn@asuresoftware.com] Sent: Thursday, June 11, 2009 7:47 PM To: David Sandberg Subject: Sent On Behalf Of Richard Snyder - Response To Your Email David, Thank you for your email. The Asure Board continues to value constructive ways to communicate, which also formed the basis for my reaching out to you on June 3, 2009. As you know, the Board has a robust nominating process that provides opportunities to shareholders to appoint director nominees and for the Board to consider such duly proposed candidates. The Nominating Committee also has the responsibility to our shareholders to vet any proposed directors and to understand the strategy and plans any new board nominees intend to implement. We have offered you several alternatives to meet with you and your nominees and to listen to your plans, but you have declined all of those. We have an effective strategy and very detailed operational plans with an objective to be profitable by year end. However, we are restricted from providing you any non-public information. Nonetheless, in spite of your public opposition to the Company's board and desire to seek its replacement, we remain open to discuss any plans that you may have to create shareholder value. We have continued to aggressively reduce expenses and plan to continue to do so and would be interested in any of your ideas beyond cutting costs. If you and your slate are unable to offer any superior plans and continue to engage in a costly proxy fight, the Board has no choice but to vigorously defend shareholders against your efforts to gain control without paying a premium. We look forward to having a responsible and constructive dialogue. Sincerely, Richard Snyder Chief Executive Officer Asure Software
From: David Sandberg Sent: Friday, June 12, 2009 4:39 PM To: 'Richard Snyder' Cc: 'James S. Gladney'; 'l.mazz@verizon.net' Subject: Response to most recent email Dick, Thanks for your reply. I am disappointed that your message talks about "efforts to gain control without paying a premium" because 1) as you know we are not seeking a majority stake and 2) our nominees are independent, because only two are our affiliates and the others are not controlled by us. If all our nominees were elected there would be a board that answers only to holders. We seek only to benefit from a new board with more industry experience and which owns shares, and thus has a common interest, with Asure's stockholders. I truly feel that new members with these characteristics should be elected and should replace the current Board, which has led Asure to significant expenditures towards a Go-Private effort which shareholders did not want and which - in the last six years alone - has overseen tens of millions of dollars in losses, consistently missed forecasts, and led a 90% decline in Asure's stock price, all while maintaining a cost structure that only now is being addressed by Asure's Board and management team. We do not agree that you have an "effective strategy" and because of this, we are not confident that the existing directors have any ability to carry out long-term profitability or to maximize shareholder value. Further, our prior communications detailed a comprehensive process for review as well as plans to reduce excessive management compensation, excessive provider costs, and to enact a reverse split coupled with a stock repurchase plan in order to maintain a NASDAQ listing and to provide for potentially accretive share repurchases. If you or your nominating committee would be interested in meeting any or all of our proposed nominees to see if they should become the company nominees, that can be productive. However I do not detect openness to that in your message. If I am misunderstanding your position and the board is open to new talent, please let me know so we can set up some discussions. If there is not a bona fide willingness to consider substituting our slate for the current board, then perhaps the best thing for the stockholders is to set the record date so there can be an orderly attempt to present our positions to the stockholders. In accordance with this desire to present our positions to stockholders, we will be submitting a section 220 demand letter requesting that you provide certain information which we wish to use in communicating with other shareholders about our desire to replace members of the existing board of directors. Very truly yours, David Sandberg David Sandberg Portfolio Manager Red Oak Partners, LLC dsandberg@redoakpartners.com (212) 614-8952 direct (646) 773-6277 cell (646) 390-6784 fax 654 Broadway, Suite 5 New York , NY 10012
PINNACLE FUND, LLLP
654 Broadway, Suite 5 | New York, New York 10012
Telephone (212) 614-8952 | Facsimile (646) 390-6784
June 15, 2009
VIA FACSIMILE AND CERTIFIED MAIL
Forgent Networks, Inc.
108 Wild Basin Road
Austin, TX 78746
Attn: Corporate Secretary
Dear Corporate Secretary:
Pinnacle Fund, LLLP ("Pinnacle") is the owner of record of 500,000 shares of
common stock, par value $.01 per share ("Common Stock"), of Forgent Networks,
Inc., a Delaware corporation (the "Company"). Pinnacle is also the beneficial
owner of 1,059,950 shares of Common Stock. Pinnacle is the Company's largest
reported shareholder as of the date of this letter.
Attached as Exhibit A is a true and correct copy of a DTC report showing the
Pinnacle Fund is the holder of record of 500,000 shares as of May 15, 2009.
Additionally, recent Schedule 13D filings made with the SEC confirm Pinnacle's
share ownership.
Pursuant to Section 220 of the Delaware General Corporation Law, Pinnacle
hereby demands to inspect the following books and records and other documents
of the Company:
1. Final vote tallies for each proposal announced as to be voted
upon at the June 2, 2009 special meeting related to proposed Go-Private
transactions.
2. All board and management correspondence related to the
cancellation of the June 2nd meeting.
3. The amounts spent or incurred with respect to the effort to
Go-Private, including legal fees, fairness opinions, proxy solicitor
fees, printing and mailing expenses, special meeting costs, and all
other expenses related to this effort.
4. The aggregate cash compensation paid to Richard Snyder's son,
Jeremy, since he first joined Asure software, along with his last three
year's base salaries, itemized per year.
5. The aggregate amount spent by Asure software for its executives
and employees related to visits to the "Cooper Clinic," inclusive of
all fees paid to the Cooper clinic as well as all costs related to
travel, lodging, or any other related expenses associated with such
visits, since Richard Snyder was first named Chairman of Asure
Software.
Pinnacle wishes the requested information for use in communicating with other
stockholders concerning the next election of directors for the corporation and
to verify the information it will communicate.
Pinnacle will bear the reasonable costs incurred by the Company in connection
with the production of the information demanded.
Pinnacle hereby authorizes and designates Red Oak Partners, its general partner
and agent, and its officers and employees and any other persons designated by
them, acting singly or in combination, to conduct the inspection and copying
herein demanded.
We request that the Company reply and provide the above information within five
business days from the date of this demand as mandated by Section 220.
If you so desire, you may send the requested information directly to Peter J.
Tennyson, Esq., Paul, Hastings, Janofsky & Walker LLP, 695 Town Center Drive,
Seventeenth Floor, Costa Mesa, California, 92626.
Pinnacle is making this demand for books and records under oath and affirms
such demand, including the attachment hereto, to be true and correct under
penalty of perjury under the laws of the United States of America and under the
laws of the States of Delaware and New York.
Executed this 15th day of June, 2009, in New York, New York.
Thank you for you anticipated cooperation.
Very truly yours,
PINNACLE FUND, LLLP
By: PINNACLE PARTNERS, LLC,
its general partner
By: RED OAK PARTNERS, L.P.,
its general partner
By: ______________________________
David Sandberg, Managing Member
cc: Peter J. Tennyson, Esq.
Exhibit A
Exhibit
99
|
O 0000001900-000484
|
|||||
|
P T
S P A R T I C I P A N T D M A / D M D R E P O
R T ( D R ’ S ) 05 / 15 / 09
|
|||||
|
PART
NAME: JEFFERIES
|
PART NO: 0019
|
MAILED
BY: AMERICAN STOCK TRANS
|
PAGE:
001
|
||
|
SCL
ID: 913484300101501
|
CUSIP: 34629U103
|
DESCRIPTION:
FORGENTNETWKSINC-
|
|||
|
BROKER
REFERENCE: 4310038718
|
RETURN
CODE: 00
|
||||
|
ACCT:
|
CORR
NAME: 0
|
||||
|
SHARE
QUANTITY:
|
500,000.00000
|
ISSUE
DATE: 05/15/09
|
MAIL
DATE:
05/15/09
|
||
|
DRS
TRANS ID
|
NUM
|
DENOM
|
CERTIFICATE
#
|
NUM
|
DENOM
|
|
BK*
00000070
|
001
/
|
500,000.00000
|
|
ASSIGNMENT
(NAME + ADDRESS)
|
THIRD
PARTY ADDRESS
|
|
OINNACLE
FUND LLLP
32065
CASTLE COURT
SUITE
100
EVERGREEN
CO 80439-3501
|
|
|
ITEM
CHARGE: 000.00 OTHER
CHARGE: 000.00
|
From: David Sandberg Sent: Friday, June 19, 2009 2:30 PM To: 'l.mazz@verizon.net'; 'Richard Snyder' Cc: 'James S. Gladney'; apertierra@redoakpartners.com Subject: 3 things Dick, A few things here: 1. we have yet not received confirmation that you intend to comply with our section 220 demand letter issued as per our right under Delaware law. The deadline per law is 5 days which would be this Monday. Your confirmation would be appreciated. 2. please note, we know of at least six different people (only one affiliated with Red Oak or Pinnacle) who attempted to dial in for questions on your earnings conference call this past Thursday. Additionally, message boards indicate others who attempted to do so and were rejected. Can you please confirm whether this was intentional or whether you intend to hold another call permitting shareholders and interested investors and individuals to ask questions? Given that this is the last call before the important annual meeting - and given Asure's activity on the press release and SEC filing front, we would appreciate a response to the extent you believe it is important to communicate with shareholders, investors, and individuals. 3. in your preliminary proxies you omit the Fenil Shah group among the list of large shareholders. Their 13D filing, dated May 28, 2009, predates the June 12, 2009 date listed as the effective date of the list. As the Shahs in total represent greater than 5% of Asure's shares outstanding and their filing was made public with the SEC and is listed in EDGAR, we ask that you correct your proxies in order to ensure that you are accurately informing shareholders as to Asure's ownership. Additionally, Red Oak has filed two recent Schedule 13D/A's with the SEC indicating increased ownership. Please confirm if your next proxies will attempt to present the most current information to shareholders, inclusive of these filings. Kind regards, David David Sandberg Portfolio Manager Red Oak Partners, LLC dsandberg@redoakpartners.com (212) 614-8952 direct (646) 773-6277 cell (646) 390-6784 fax 654 Broadway, Suite 5 New York , NY 10012
From: David Sandberg Sent: Monday, June 22, 2009 12:22 PM To: 'l.mazz@verizon.net' Cc: 'James S. Gladney'; 'Tennyson, Peter J.' Subject: response? Dear Lou, Jim Gladney informed me that you proactively emailed him immediately pursuant to last Thursday's earnings call informing him you had been looking forward to his questions (you emailed him 23 minutes after the call's start time, writing: "Was looking forward to your questions. L." Unless I am mistaken - and if so, please correct me - I will assume your email reflected your expectation that Mr. Gladney (and others) would be provided with an opportunity to communicate with management on this call. As you are aware, on Friday (the day after the earnings call), I cc'd you on an email I wrote to Dick Snyder where I inquired - - among other things - as to why at least six individuals (and others from message boards) were not permitted to ask questions on Asure's earnings call on Thursday. As I am sure you are also aware, opening calls for questions from the audience is customary with public earnings calls and is consistent with every earnings call Asure has provided at least since you personally joined the Board back in 2003. Assuming your email to Mr. Gladney confirms the intent was to maintain industry (and Asure) standard practice and allow questions on the earnings calls, can you inform us as to when a new call will be held which offers shareholders (such as Mr. Gladney and others) this opportunity? Alternatively, if callers were intentionally blocked from asking questions we would appreciate this information as well as we need to understand why this is the first time since you joined the Board that shareholders have been denied their right to ask questions. Given your pro-active, real-time communication and interaction with Jim Gladney I felt that you would be the right person to contact, especially as Dick Snyder has not replied to this same inquiry. For reference, as Asure set a July 10 record date (just 20 days prior to the upcoming Annual Meeting vs. 50 days prior for all other meetings decided by this same Board) and recently reported its earnings, we believe there is plenty of time for management to hold this important call with the investing public in the near-term. Consistent with past calls, we expect this would take under one hour. As a large shareholder, communication with the management team of a company I have invested real dollars with is of great importance, especially given the expectation for this type of communication on at least a quarterly basis. Given the contested proxy, I am happy to have Red Oak and Pinnacle employees abstain from asking questions so as to not place Asure's management in difficult situations facing tough questions from us in a public forum. Again, our interest is in allowing shareholders as a whole to ask questions about a company which they collectively own. Your timely reply as to whether this was intentional or was an error - and will be corrected - is appreciated. A brief email will suffice. David David Sandberg Portfolio Manager Red Oak Partners, LLC dsandberg@redoakpartners.com (212) 614-8952 direct (646) 773-6277 cell (646) 390-6784 fax 654 Broadway, Suite 5 New York , NY 10012
June 22, 2009 direct dial: 214/745-5600 mgjohnson@winstead.com Peter J. Tennyson, Esq. ` VIA FACSIMILE AND Paul, Hastings, Janofsky & Walker LLP CERTIFIED MAIL 695 Town Center Drive, 17th Floor Costa Mesa, CA 92626 Dear Mr. Tennyson: This firm represents Forgent Networks, Inc. d/b/a Asure Software. Reference is made to the June 15, 2009 letter from Pinnacle Fund, LLLP to Forgent (copy attached). Forgent has asked us to respond to you, as counsel for Pinnacle. Pinnacle's demand to inspect certain books and records of the Company is deficient in that it fails to state a proper purpose as required under Delaware law. Consequently, the Company will not be providing Pinnacle access to the Company's books and records and other documents as demanded. Very truly yours, Mark G. Johnson MGJ:sb Encl. cc: Nancy Harris, President and CEO
June 24, 2009
Mark G. Johnson
Winstead P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, TX 75270
Dear Mr. Johnson:
I am in receipt of your June 22, 2009 letter denying the request by
Pinnacle Fund, LLLP ("Pinnacle") to inspect corporate records of Forgent
Networks, Inc. (the "Company") pursuant to Section 220 of the Delaware General
Corporation Law.
Your letter inadequately claims that Pinnacle failed to state a proper
purpose to receive the requested information in its June 15, 2009 letter to the
Company. If the letter was unclear, Pinnacle's purpose is to communicate the
requested information to the Company's stockholders in connection with
Pinnacle's proxy solicitation for the Company's upcoming annual meeting. As
you know, the information Pinnacle requested would confirm or rebut facts that
stockholders would find very material in deciding how to vote at the annual
meeting.
Delaware courts have consistently supported open and informed elections
and have held that seeking information for the purpose of communicating with
shareholders is a permissible purpose. See Credit Bureau Reports, Inc. v.
Credit Bureau of St. Paul, Inc., 290 A.2d 691 (Del. 1972) and Food and Allied
Service Trades Dept., AFL-CIO v. Wal-Mart Stores, Inc., 18 Del. J. Corp. L. 651
(Del.Ch. 1992). As the Credit Bureau Reports court clearly stated, "under
Section 220, the desire to solicit proxies for a slate of directors in
opposition to management is a purpose reasonably related to the stockholder's
interest as a stockholder."
We urge the Company to reconsider its denial of Pinnacle's request. It
appears that the Company's refusal to provide the information requested is
motivated by the belief that the requested information would cast management in
an unfavorable light. If management has nothing to hide, the Company may
demonstrate this by delivering the information that Pinnacle has requested.
If the Company has an appropriate and compelling reason to keep
specific elements of the requested information confidential, Pinnacle is
willing to discuss these concerns. However, a general denial of access to all
information is not acceptable.
Sincerely,
Peter J. Tennyson
of PAUL, HASTINGS, JANOFSKY & WALKER LLP
June 25, 2009 direct dial: 214/745-5600 mgjohnson@winstead.com Peter J. Tennyson, Esq. Paul, Hastings, Janofsky & Walker LLP 695 Town Center Drive, 17th Floor Costa Mesa, CA 92626 Dear Mr. Tennyson: I am in receipt of your letter dated June 24, 2009. Frankly, I have struggled with how best to respond. The cases you cited as authority for your position are clearly off point. Given that, I'm not sure what else need be said. The Company remains prepared to consider any request for access to the Company's books and records that it receives from any stockholder. If the request states a proper purpose and otherwise satisfies the requirements of Section 220 of the Delaware General Corporation Law, the Company will diligently comply with its duties and obligations in accordance with applicable law. Thank you. Very truly yours, Mark G. Johnson MGJ:sb cc: Nancy Harris, President and CEO
PINNACLE FUND, LLLP
654 Broadway, Suite 5 | New York, New York 10012
Telephone (212) 614-8952 | Facsimile (646) 390-6784
June 29, 2009
VIA OVERNIGHT DELIVERY AND FACSIMILE
Management and Board of Directors
Forgent Networks, Inc.
108 Wild Basin Road
Austin, TX 78746
Re: Request to Give Shareholders an opportunity to Communicate with You
Dear Management and the Board of Directors:
I am writing to request - for a third time - that you not deprive Asure
shareholders of an open question and answer session for shareholders,
individuals, and interested parties relating to the release of quarterly
earnings. It has been Asure's (and the industry's) long-established practice
to do this, and in your June 12 announcement of the June 18 call you gave
instructions for participation, but those who tried could not comment,
according to at least seven holders we are aware of. Two recent
communications - one sent to Asure's Chairman Dick Snyder and one sent to
Asure's Director Lou Mazzuchelli directly addressing this same topic have gone
unanswered.
In our recent communications to Mr. Snyder and Mr. Mazzuchelli (which we have
attached), we informed them we've heard from several (now at least seven)
individuals who attempted to ask questions during the June 18th earnings call
and were unable to. Importantly, only one of these individuals was affiliated
with Red Oak or Pinnacle. Message boards indicate other shareholders were
similarly denied the chance to speak.
Given one of Asure's largest shareholders, James Gladney, informed us that he
contacted Mr. Snyder in advance of the June 18th call in order to confirm
whether he would be permitted to ask questions and given Asure Director Lou
Mazzuchelli pro-actively emailed Mr. Gladney just 23 minutes after the earnings
call started to inquire about Mr. Gladney's questions, it appears possible that
there may have been an intent to provide a question and answer session and that
an error occurred. However, the lack of any response from Mr. Snyder, Mr.
Mazzuchelli, or anyone at ASUR now more than one week after being informed of
this starts to suggest that the failure to hold a Q&A session may not have been
an error. As such, if there was an error please rectify it by holding a new
question and answer session as soon as possible - we believe anytime in the
next few days would work well and further believe that ASUR's shareholders care
enough about their company that only two days advance notification is necessary
to ensure a well-attended call. We already informed Mr. Mazzuchelli in our
email to him that we want what's best for all shareholders and have offered
that Red Oak and Pinnacle employees will refrain from asking questions in a new
call - all we want is for shareholders and interested individuals to be given
their expected chance to ask about the business which they collectively own and
have interest in.
Frankly, speaking, given that you are recommending that shareholders re-ratify
the appointment of an auditor who billed ASUR what we believe is an absurd
$420,000 in 2008, we view the 45-60 minutes of expected question and answer
time as perhaps one of your most reasonable expenses and uses of time. If Mr.
Snyder, Mr. Peterson, or Mrs. Harris are traveling, they can easily be
conferenced in as the call has always taken one hour or less. Lastly, we
remind you that your effort to take ASUR private failed by a wide enough margin
that you called off the entire special meeting, a fact you may not appreciate
but which clearly indicates that shareholders want the public accountability,
visibility, and communication expected from a public company. We believe
shareholders are owed the same opportunity to ask questions as they have
received, consistent with industry practice, and would hope that you agree. As
this is the last chance for shareholders and interested parties to ask
questions before the scheduled Annual Meeting, you really ought to hold this
call.
Further, as an owner of record of Asure's shares, Pinnacle Fund wrote you a
letter on Monday, June 15th requesting information which Red Oak and Pinnacle
clearly believe shareholders have a right to know. You replied - one week
later - that you would not provide this information. This behavior coupled
with the absence of a response or correction to the skipped June 18 question
and answer session is making us increasingly concerned with the intent of
Asure's management team and Board to communicate with its shareholders and
provide the transparency for which you have publicly patted yourselves on the
back (please refer to your May 18, 2009 press release). We ask that you
provide this transparency and further reinforce that anything less indicates
poor governance.
Lastly, we wish to again address your assertion that we are seeking control of
ASUR without a tender offer. Because Red Oak and Pinnacle employees comprise
just two of the six nominees, we reject this claim entirely. Instead, Pinnacle
asked other large ASUR shareholders to refer qualified nominees, and in this
manner Pat Goepel, Bob Graham, and Jeffrey Vogel were introduced to Pinnacle.
Beyond this, Pinnacle and Red Oak have no relationships with nor have ever
worked with any of the four unaffiliated nominees. As such, nominees Goepel,
Graham, Vogel, and Ferris are truly independent of Pinnacle and Red Oak. The
last time we checked, four out-votes two. If your math tells you differently
then that perhaps explains why instead of attempting to reduce costs you are
seeking to re-appoint Ernst & Young and saddle shareholders with yet another
egregious audit bill.
Sincerely,
PINNACLE FUND, LLLP
By: PINNACLE PARTNERS, LLC,
its general partner
By: RED OAK PARTNERS, L.P.,
its general partner
By: ______________________________
David Sandberg, Managing Member
cc: Corporate Secretary
For Immediate Release
Red Oak Partners and Pinnacle Fund Ask Asure to Re-open Earnings Call to Allow
Shareholders to Ask Questions About the Company and Call for Disclosure of
Information.
New York, New York, June 29, 2009. Pinnacle Fund announced today that it wrote
a letter to Asure's ("ASUR's") Board of Directors and management requesting
that they re-open their recent earnings call and allow shareholders,
individuals, and interested parties to ask the company questions in an open
question and answer session. Red Oak sent its letter after two communications,
one to Asure's Chairman Dick Snyder and one to Asure's Director Lou
Mazzuchelli, directly addressing this same topic went unanswered.
Additionally, Pinnacle Fund asked why Asure has refused to answer questions
about its recent abandoned stockholder meeting and about compensation practices
raised in a letter sent on June 15th.
David Sandberg, the portfolio manager of the Pinnacle Fund, states, "We are
increasingly concerned with Asure's unwillingness to communicate with its
shareholders even though they pat themselves on the back for a "history of
transparency" per their May 18, 2009 press release. We informed ASUR of at
least seven individuals who were not permitted to ask questions on the
Company's June 18th earnings call (importantly, only one of these individuals
was affiliated with Red Oak or Pinnacle). For essentially every quarter in the
past, ASUR provided a question and answer session for shareholders, consistent
with company and industry practice. Its June 12 announcement of the recent
earnings call even provided instructions for participating, but when people
tried to speak they could not. The net effect of this is that shareholders
were denied the chance to ask questions about the company they own. We would
like to see ASUR correct this."
Mr. Sandberg continued, "We asked ASUR to hold another call and even informed
them that Red Oak and Pinnacle employees would refrain from asking any
questions on a new call provided other shareholders and interested parties are
permitted to ask questions. We still received no response. If this is good
corporate governance then - along with appointing a non-independent Nancy
Harris to replace resigning independent Director Kathleen Cote and with Mr.
Snyder remaining as executive chairman instead of as non-executive chairman -
Mr. Snyder's idea of upholding 'the highest corporate governance standards' per
his June 18 press release leaves much to be desired. Perhaps ASUR's memory is
short, but their Go-Private effort failed by a wide enough margin that they
called off the entire special meeting. It seems obvious that shareholders want
the accountability, visibility, and communication of a public company and we
see no reason they do not deserve this. We are disappointed that ASUR is
trying to deprive shareholders of their chance to question management."
Separately, ASUR indicated it will not provide information requested by
Pinnacle on June 15. The request asked for:
1. Final vote tallies for each proposal scheduled to be voted upon at the
June 2, 2009 special meeting related to proposed Go-Private transactions.
Pinnacle asked for the company's tally after ASUR's director Lou Mazzuchelli
indicated that the voting results stated in Pinnacle's June 4 press release
were incorrect. Pinnacle believes that if Asure wants to claim Pinnacle's
count was incorrect, shareholders have a right to see the "official" voting
results and assess whether there was considerable support outside of shares
owned or controlled by Red Oak. This important information about shareholder
preferences regrettably represents the sole tangible product from what Pinnacle
questioned as a wasteful effort and spend from the outset.
2. All board and management correspondence related to the cancellation of
the June 2nd meeting. Pinnacle believes the shareholders should know why the
meeting was cancelled.
3. The amounts spent or incurred with respect to the effort to Go-Private,
including legal fees, fairness opinions, proxy solicitor fees, printing and
mailing expenses, special meeting costs, and all other expenses related to this
effort. Pinnacle believes that a comparison of ASUR's expenditures with its
own will provide shareholders with valuable insight about the current Board's
and management's ability to manage costs in the best interests of shareholders.
Given the discussion of ASUR's inability to manage costs, this information is
clearly relevant.
4. The aggregate cash compensation paid to Richard Snyder's son, Jeremy,
since he first joined Asure software, along with his last three year's base
salaries, itemized per year. If Asure is going to promote its "history of
transparency" in public press releases (see their June 18 press release), why
is the chairman's son's salary a secret?
5. The aggregate amount spent by Asure software related to visits by its
executives and employees to the "Cooper Clinic" in Dallas. Pinnacle has been
told that ASUR has annually sent its executives and certain employees to this
celebrity-caliber health facility, which advertises its "luxurious amenities"
and its "elegant 62-room boutique." Information on amounts spent related to
this "perk" are directly relevant to assessing how ASUR's Board and management
have managed costs and prevented corporate waste. Pinnacle tried to determine
the amounts spent, but the Company apparently prefers to keep this a secret.
If no amounts were ever spent, Pinnacle would appreciate this information as
well. Regardless, Pinnacle believes shareholders have a right to know how
their money has been spent.
Pinnacle's letter also addressed ASUR's assertion that Pinnacle is attempting
to seek control of Asure without paying a premium. Pinnacle rejects this claim
and pointed out that its slate will not allow Red Oak to control Asure because
Red Oak and Pinnacle employees comprise just two of the six nominees.
Pinnacle's June 29 letter, its June 15 request for information, and all
communications with Asure since the June 2 Go-Private vote date have been filed
as proxy solicitation communications pursuant to the SEC rules. These filings
can be found at www.sec.gov by selecting "Search" at the top right and then
typing "forgent" into the box asking for the Company Name, and are dated the
same date as this press release.
If you have further questions please contact David Sandberg at (212) 614-8952
or dsandberg@redoakpartners.com.
Important Information
Pinnacle intends to file a definitive proxy statement soliciting votes for
Pinnacle's nominees to the Company's board of directors. Pinnacle is not
asking you at this time to vote on its slate of directors. Once Pinnacle's
definitive proxy statement for the annual meeting becomes available, Pinnacle
strongly advises stockholders to carefully read that definitive proxy
statement, as it will contain important information. Information concerning
Pinnacle and any other persons deemed participants in Pinnacle's solicitation
of proxies from stockholders in connection with the annual meeting will be
available in Pinnacle's definitive proxy statement for the annual meeting.
Once Pinnacle's definitive proxy statement for the annual meeting becomes
available, stockholders will be able to obtain, free of charge, copies of that
statement and any other documents Pinnacle files with or furnishes to the
Securities and Exchange Commission through the Securities and Exchange
Commission's website at www.sec.gov.