The following constitutes Amendment No. 3 to the Schedule 13D filed by the undersigned (“Amendment No. 3”). This Amendment No. 3 amends the Schedule 13D as specifically set forth herein.
|
Item 2.
|
Identity and Background.
|
|
|
Item 2 is hereby amended and restated as follows:
|
|
|
(a)
|
This statement is filed by:
|
|
|
(i)
|
Balch Hill Partners, L.P., a Delaware limited partnership (the “Balch Hill Partnership”);
|
|
|
(ii)
|
Balch Hill Capital, LLC, a Delaware limited liability company (“Balch Hill”), an investment adviser registered with the Securities and Exchange Commission (“SEC”) and who serves as the general partner of, and investment adviser to, Balch Hill Partnership;
|
|
|
(iii)
|
Simon J. Michael (“Mr. Michael” and, together with Balch Hill Partnership and Balch Hill, the “Balch Hill Entities”), who serves as the sole manager of Balch Hill;
|
|
|
(iv)
|
Potomac Capital Partners, L.P., a Delaware limited partnership (“PCP I”);
|
|
|
(v)
|
Potomac Capital Management, L.L.C., a New York limited liability company (“Potomac Management I”), who serves as the general partner of PCP I;
|
|
|
(vi)
|
Potomac Capital Partners II, L.P., a Delaware limited partnership (“PCP II”);
|
|
|
(vii)
|
Potomac Capital Management II, L.L.C., a Delaware limited liability company (“Potomac Management II”), who serves as the general partner of PCP II;
|
|
|
(viii)
|
Potomac Capital Partners III, L.P., a Delaware limited partnership (“PCP III”);
|
|
|
(ix)
|
Potomac Capital Management III, L.L.C., a Delaware limited liability company (“Potomac Management III”), who serves as the general partner of PCP III;
|
|
|
(x)
|
Paul J. Solit (“Mr. Solit”), who serves as the co-managing member of each of Potomac Management II and Potomac Management III;
|
|
|
(xi)
|
Eric Singer (“Mr. Singer” and, together with PCP I, Potomac Management I, PCP II, Potomac Management II, PCP III, Potomac Management III, and Mr. Solit, the “Potomac Entities”), who serves as the co-managing member of each of Potomac Management II and Potomac Management III and is a nominee for election to the Board of Directors of the Issuer (the “Board”);
|
|
|
(xii)
|
Martin Colombatto (“Mr. Colombatto”), a nominee for election to the Board;
|
|
|
(xiii)
|
Adam Leventhal (“Mr. Leventhal”), a nominee for election to the Board;
|
|
|
(xiv)
|
Clark Masters (“Mr. Masters”), a nominee for election to the Board;
|
|
|
(xv)
|
Mark Schwartz (“Mr. Schwartz”), a nominee for election to the Board;
|
|
|
(xvi)
|
Dilip Singh (“Mr. Singh”), a nominee for election to the Board; and
|
|
|
(xvii)
|
Bernard Xavier (“Mr. Xavier”), a nominee for election to the Board.
|
Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing Agreement, as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.
(b) The principal business address of each of the Balch Hill Entities is 2778 Green Street, San Francisco, CA 94123. The principal business address of each of the Potomac Entities is 825 Third Avenue, 33rd Floor, New York, New York 10022. Mr. Colombatto’s principal business address is 4130 Calle Isabella, San Clemente, CA 92672. Mr. Leventhal’s principal business address is c/o Delphix Corp., 604 Mission St., Suite 400, San Francisco, CA 94105. Mr. Masters’ principal business address is c/o SAP Labs, LLC, 3410 Hillview Avenue, Palo Alto, CA 94304. Mr. Schwartz’s principal business address is 1493 Rancho View Dr., Lafayette, CA 94549. Mr. Singh’s principal business address is 333 NE 21
st
Avenue, Apt. 1110, Deerfield Beach, FL 33441. Mr. Xavier’s principal business address is 1930 Balboa Avenue, Del Mar, CA 92067.
(c) The principal business of the Balch Hill Partnership is investing in securities. The principal business of Balch Hill is serving as the general partner of, and investment adviser to, the Balch Hill Partnership. The principal occupation of Mr. Michael is serving as the sole manager of Balch Hill. The principal business of PCP I is investing in securities. The principal business of Potomac Management I is acting as the general partner of PCP II. The principal business of PCP II is investing in securities. The principal business of Potomac Management II is acting as the general partner of PCP II. The principal business of PCP III is investing in securities. The principal business of Potomac Management III is acting as the general partner of PCP III. The principal occupation of Mr. Solit is serving as the managing member of Potomac Management I and co-managing member of each of Potomac Management II and Potomac Management III. The principal occupation of Mr. Singer is serving as the co-managing member of each of Potomac Management II and Potomac Management III. The principal occupation of Mr. Colombatto is serving as a director of each of ClariPhy Communications, Inc. and Luxtera Corp. The principal occupation of Mr. Leventhal is Chief Technology Officer of Delphix Corp. The principal occupation of Mr. Masters is Senior Vice President, HANA Cloud Computing for SAP AG. The principal occupation of Mr. Schwartz is serving as a director of each of Pepex Biomedical, Inc. and PurchasePoint Design. The principal occupation of Mr. Singh is serving as interim Chief Executive Officer, President and as a director of InfuSystem Holdings Inc. The principal occupation of Mr. Xavier is serving as General Partner of Mangrove VC.
(d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Except as otherwise set forth below, no Reporting Person 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.
(f) Each of Balch Hill Partnership and Balch Hill is organized under the laws of the State of Delaware. Mr. Michael is a citizen of the United States of America. Potomac Management I is organized under the laws of the State of New York. Each of PCP I, PCP II, Potomac Management II, PCP III and Potomac Management III is organized under the laws of the State of Delaware. Messrs. Solit, Singer, Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier are each citizens of the United States of America.
|
Item 3.
|
Source and Amount of Funds or Other Consideration.
|
Item 3 is hereby amended to add the following:
The aggregate purchase price of the 25,000 Shares owned directly by Mr. Colombatto is approximately $118,489, including brokerage commissions. Such Shares were acquired with Mr. Colombatto’s personal funds. The aggregate purchase price of the 4,000 Shares held in trust for the benefit of Mr. Colombatto’s child who shares the same household is approximately $19,581, including brokerage commissions. Such Shares were acquired with the trust’s working capital.
|
Item 4.
|
Purpose of Transaction
|
Item 4 is hereby amended to add the following:
On February 8, 2013, Balch Hill Partnership delivered a letter to the Issuer nominating Messrs. Colombatto, Leventhal, Masters, Schwartz, Singer, Singh and Xavier (together, the “Nominees”), as set forth therein, for election to the Board at the Annual Meeting. The Reporting Persons believe that the Issuer has lost the trust of its key constituents, including its customers, shareholders, potential strategic partners and potential employees. The Reporting Persons believe that this lost of trust originates at the top, necessitating meaningful change to the Board and executive management team. The Reporting Persons have engaged and remain willing to engage in constructive discussions with management and the Board regarding the nomination of directors at the Annual Meeting and the composition of the Issuer’s Board in order to avoid a protracted and costly proxy contest. However, the Reporting Persons believe shareholder value is at risk without a reconstituted Board. The Reporting Persons believe they have nominated seven highly qualified candidates for election to the Board who will provide fresh perspective and restore trust to the Issuer. The Reporting Persons’ feel strongly that the Nominees would increase the quality and independence of the Board while ensuring that the interests of shareholders are adequately represented in the boardroom. The Reporting Persons have engaged and intend to continue to engage in discussions with shareholders regarding the nomination of directors at the Annual Meeting and the composition of the Issuer’s Board generally.
|
Item 5.
|
Interest in Securities of the Issuer.
|
Item 5 is hereby amended and restated as follows:
(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 46,726,318 Shares outstanding as of October 24, 2012, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the SEC on November 6, 2012.
As of the close of business on February 8, 2013, Balch Hill Partnership beneficially owned 4,100,000 Shares, constituting approximately 8.8% of the Shares outstanding. By virtue of their relationships with Balch Hill Partnership discussed in further detail in Item 2, each of Balch Hill and Mr. Michael may be deemed to beneficially own the Shares beneficially owned by Balch Hill Partnership.
As of the close of business on February 8, 2013, PCP I beneficially owned 65,659 Shares, constituting less than 1% of the Shares outstanding. By virtue of their relationships with PCP I discussed in further detail in Item 2, each of Potomac Management I and Mr. Solit may be deemed to beneficially own the Shares beneficially owned by PCP I.
As of the close of business on February 8, 2013, PCP II beneficially owned 234,134 Shares, constituting less than 1% of the Shares outstanding. By virtue of their relationships with PCP II discussed in further detail in Item 2, each of Potomac Management II and Messrs. Solit and Singer may be deemed to beneficially own the Shares beneficially owned by PCP II.
As of the close of business on February 8, 2013, PCP III beneficially owned 108,377 Shares, constituting less than 1% of the Shares outstanding. By virtue of their relationships with PCP III discussed in further detail in Item 2, each of Potomac Management III and Messrs. Solit and Singer may be deemed to beneficially own the Shares beneficially owned by PCP III.
As of the close of business on February 8, 2013, Mr. Colombatto directly owned 25,000 Shares and may be deemed to beneficially own an additional 4,000 Shares held in trust for the benefit of his child who shares the same household, constituting less than one percent of the Shares outstanding.
Each of the Reporting Persons, as a member of a “group” with the other Reporting Persons for purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), may be deemed to beneficially own the Shares owned by the other Reporting Persons. The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any Shares he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that are not directly owned by such Reporting Person, except to the extent of their pecuniary interest therein.
(b) Each of Balch Hill Partnership, Balch Hill and Mr. Michael has shared voting and dispositive power over the Shares owned directly by the Balch Hill Partnership. PCP I, Potomac Management I and Mr. Solit share the power to vote and dispose of the Shares beneficially owned by PCP I. PCP II, Potomac Management II and Messrs. Solit and Singer share the power to vote and dispose of the Shares beneficially owned by PCP II. PCP III, Potomac Management III and Messrs. Solit and Singer share the power to vote and dispose of the Shares beneficially owned by PCP III. Mr. Colombatto has sole voting and dispositive power over the Shares he owns directly.
(c) Schedule A annexed hereto lists all transactions in the Shares by the Reporting Persons during the past sixty days. All of such transactions were effected in the open market.
(d) 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.
(e) Not applicable.
|
Item 6.
|
Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
|
Item 6 is hereby amended to add the following:
On February 8, 2013, each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier entered into a joinder agreement to the Joint Filing Agreement dated as of January 25, 2013 by and among the Potomac Entities and the Balch Hill Entities, pursuant to which each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier agreed to be bound by the terms and conditions set forth therein, including, among other things, the joint filing on behalf of each of them of statements on Schedule 13D, and any amendments thereto, with respect to the securities of the Issuer. Copies of each of the joinder agreements are attached hereto as Exhibit 99.1 and are incorporated herein by reference. A copy of the Joint Filing Agreement was filed as Exhibit 99.1 to Amendment No. 2.
Pursuant to letter agreements, the Balch Hill Partnership has agreed to indemnify each of the Nominees 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.
Balch Hill Partnership has signed compensation letter agreements with each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier, pursuant to which Balch Hill Partnership agrees to pay each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier : (i) $10,000 in cash as a result of the submission by Balch Hill Partnership of its nomination of each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier to the Issuer and (ii) $10,000 in cash upon the filing of a definitive proxy statement with the Securities and Exchange Commission by the Balch Hill Partnership relating to the solicitation of proxies in favor of each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier ’s election as a director at the Annual Meeting. Pursuant to the compensation letter agreements, each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier has agreed to use the after-tax proceeds from such compensation to acquire securities of the Issuers (the “Nominee Shares”) at such time that each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier shall determine, but in any event no later than 14 days after receipt of such compensation. If elected or appointed to serve as a director of the Board, each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier agrees not to sell, transfer or otherwise dispose of any Nominee Shares within two (2) years of his election or appointment as a director; provided, however, in the event that the Issuer enters into a business combination with a third party, each of Messrs. Colombatto, Leventhal, Masters, Schwartz, Singh and Xavier may sell, transfer or exchange the Nominee Shares in accordance with the terms of such business combination. A form of the compensation letter agreements is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
|
Item 7.
|
Material to be Filed as Exhibits
.
|
Item 7 is hereby amended to add the following exhibits:
|
|
99.1
|
Joinder Agreements to the Joint Filing Agreement
|
|
|
99.2
|
Form of Indemnification Letter Agreement
|
|
|
99.3
|
Form of Compensation Letter Agreement
|
SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: February 12, 2013
|
|
BALCH HILL PARTNERS, L.P.
|
|
|
|
|
|
By:
|
Balch Hill Capital, LLC
General Partner
|
|
|
|
|
|
By:
|
/s/ Simon J. Michael
|
|
|
|
Name:
|
Simon J. Michael
|
|
|
|
Title:
|
Manager
|
|
|
BALCH HILL CAPITAL, LLC
|
|
|
|
|
|
By:
|
/s/ Simon J. Michael
|
|
|
|
Name:
|
Simon J. Michael
|
|
|
|
Title:
|
Manager
|
|
|
/s/ Simon J. Michael
|
|
|
SIMON J. MICHAEL
Individually and as attorney-in-fact for Martin Colombatto, Adam Leventhal, Clark Masters, Mark Schwartz, Dilip Singh, and Bernard Xavier
|
|
|
POTOMAC CAPITAL PARTNERS L.P.
|
|
|
|
|
|
By:
|
Potomac Capital Management, L.L.C.
|
|
|
|
General Partner
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
Paul J. Solit
|
|
|
Title:
|
Managing Member
|
|
|
POTOMAC CAPITAL MANAGEMENT, L.L.C.
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
Paul J. Solit
|
|
|
Title:
|
Managing Member
|
|
|
POTOMAC CAPITAL PARTNERS II, L.P.
|
|
|
|
|
|
By:
|
Potomac Capital Management II, L.L.C.
|
|
|
|
General Partner
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
Paul J. Solit
|
|
|
Title:
|
Co-Managing Member
|
|
|
POTOMAC CAPITAL MANAGEMENT II, L.L.C.
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
Paul J. Solit
|
|
|
Title:
|
Co-Managing Member
|
|
|
POTOMAC CAPITAL PARTNERS III, L.P.
|
|
|
|
|
|
By:
|
Potomac Capital Management III, L.L.C.
|
|
|
|
General Partner
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
Paul J. Solit
|
|
|
Title:
|
Co-Managing Member
|
|
|
POTOMAC CAPITAL MANAGEMENT III, L.L.C.
|
|
|
|
|
|
By:
|
/s/ Paul J. Solit
|
|
|
Name:
|
Paul J. Solit
|
|
|
Title:
|
Co-Managing Member
|
SCHEDULE A
Transactions in the Shares During the Past Sixty Days
Shares Purchased / (Sold)
|
|
|
BALCH HILL PARTNERS, L.P.
|
(70,000)
|
5.2147
|
12/18/2012
|
|
(2,800)
|
5.2918
|
12/19/2012
|
|
(17,200)
|
5.3027
|
12/20/2012
|
BALCH HILL CAPITAL, LLC
None
SIMON J. MICHAEL
None
POTOMAC CAPITAL PARTNERS, L.P.
None
POTOMAC CAPITAL MANAGEMENT, L.L.C.
None
POTOMAC CAPITAL PARTNERS II, L.P.
|
(5,017)
|
5.1142
|
01/11/2013
|
|
(20,000)
|
5.2601
|
01/14/2013
|
POTOMAC CAPITAL MANAGEMENT II, L.L.C.
None
POTOMAC CAPITAL PARTNERS III, L.P.
None
POTOMAC CAPITAL MANAGEMENT III, L.L.C.
None
PAUL J. SOLIT
None
ERIC SINGER
None
MARTIN COLOMBATTO
|
4,000
|
4.8790
|
12/31/2012
|
|
10,000
|
4.8367
|
12/31/2012
|
|
|
4.8790
|
12/31/2012
|
ADAM LEVENTHAL
None
CLARK MASTERS
None
MARK SCHWARTZ
None
DILIP SINGH
None
None
2
Held in trust for the benefit of Mr. Colombatto’s child who shares the same household.