Posts Tagged ‘standstill agreement’

Activist Investor Heiland Become CEO at KIT Digital

SEC Filings | Posted by Joe Zaller
Aug 30 2012

 

KIT Digital said in a filing with the SEC that activist investor Peter Heiland has been appointed CEO of the company. 

Heiland, the managing director of JEC Capital Partners, replaces interim CEO Barak Bar-Cohen, who became CEO of KIT Digital in April 2012 following the departure of Kaleil Isaza Tuzman, who in his resignation letter cited difference with the company’s board of directors over strategic issues.

This is the second time in recent months that Heiland’s JEC Capital Partners has become involved with a broadcast technology company.  Earlier this year, JEC created activist shareholder drama at Miranda Technologies, which was ultimately sold to Belden – resulting in a tidy profit for JEC.

JEC Capital Partners, which owns 8 percent of KIT Digital, recently signed a “standstill agreement” with KIT.   Under the terms of the standstill agreement, Heiland and another activist investor were given KIT Digital board seats in exchange for supporting KIT digital’s Board, and refraining from taking “certain adverse actions” against KIT digital’s Board.

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KIT Digital SEC Filing: Heiland Takes Over CEO Role from Barak Bar-Cohen

KIT Digital Posts $102.6 Million GAAP Loss in Q2 2012, Sells Sezmi and Content Solutions Businesses at Steep Loss          

Activist Investors Claim Board Seats at KIT Digital, Will Refrain From Adverse Actions Against KIT Digital’s Board

Text of Standstill Agreement Between KIT Digital, JEC Capital Partners, and Costa Brava

KIT Digital Exploring Strategic Options for Company Sale, Fails to Reach Agreement with JEC Capital

KIT Digital Chairman Resigns, Cites Differences With Board of Directors Over Strategic Sales Process

Streaming Media.Com Article: What’s Going on with KIT Digital?

Management and Board Shake Up at KIT Digital Sends Stock Down 22.3 Percent

Activist Shareholder Drama Continues at Miranda Technologies

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© Devoncroft Partners. All Rights Reserved.

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Activist Investors Claim Board Seats at KIT Digital, Will Refrain From Adverse Actions Against KIT Digital’s Board

broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
Aug 07 2012

KIT Digital announced that it entered into a standstill agreement with Seth Hamot,  Managing Member of Roark, Rearden & Hamot, LLC, the General Partner of Costa Brava Partnership III L.P., and K. Peter Heiland, Managing Director of JEC Capital Partners, LLC.

As part of the deal, both Hamot and Heiland will join KIT digital’s Board as new directors. KIT also said that Joseph E. Mullin III has resigned from the company’s board.

Hamot owns approximately 7% of the outstanding shares of KIT digital.  Heiland who was also an activist shareholder in Miranda Technology prior to its sale to Belden, owns approximately 8% of the outstanding shares of KIT digital.

In connection with Hamot and Heiland joining the KIT digital Board, KIT digital, Mr. Hamot, Costa Brava, Mr. Heiland, JEC, and their related parties have entered into a standstill agreement. Under the agreement, the Costa Brava parties and JEC parties will support KIT digital’s Board nominees for the 2012 annual meeting of shareholders and they will refrain from taking “certain adverse actions” against KIT digital’s Board.

According to the agreement, these “adverse actions” include the following:

(i)                nominate or propose any candidates for the Board or seek to change or alter the composition or size or membership of the Board or the removal or replacement of any director or call or seek the call of any meeting of stockholders;

 

(ii)              submit a shareholder proposal under Rule 14a-8 of the Securities Exchange Act of 1934, directly or indirectly, to the Company or seek any referendum or the like by the shareholders of the Company;

 

 (iii)             file a proxy or consent statement in opposition to the Company or otherwise obtain or solicit proxies or consents from any shareholders of the Company or be a participant in or make any solicitation for a matter relating to the Board;

 

(iv)             enter into any contract, arrangement or understanding with any person (other than an Affiliate or Associate, subject to the percentage ownership limitation below, for which K. Peter Heiland (in the event of an Affiliate or Associate of a JEC member), or for which Seth Hamot (in the event of an Affiliate or Associate of a Costa Brava member), has and maintains all voting and investment and other applicable authority or which Affiliate or Associate signs a joinder to this Agreement agreeing to be bound by all the terms and conditions hereof as a JEC member or a Costa Brava member as applicable) with respect to any securities of KIT, including but not limited to any acquisition of any securities (or beneficial ownership thereof), joint venture, loan or option agreement, put or call, guarantee of loans, guarantee of profits or division of losses or profits, it being understood that Costa Brava members’ and JEC members’ aggregate holdings in KIT’s securities shall not exceed 9.9% and 9.9% beneficial ownership under Section 13(d) of the Exchange Act, respectively, of the common stock of the Company;

 

(v)              commence or enter into any tender offer or exchange offer, merger, acquisition or other business combination or extraordinary transaction involving the Company or any of its subsidiaries;

(vi)             form, join or in any way participate in a “group” (as defined under the Exchange Act) with respect to the Company or its securities;

 

(vii)            otherwise act, alone or in concert with others, to seek to influence the management, Board or policies of KIT or take any action to seek the removal of any member of the Board, change the size of the Board, obtain additional representation on the Board, or take any other action related to the management or the Board;

 

(viii)          disclose any intention, plan, proposal or arrangement or other matter inconsistent with its obligations under this Section 8(a) (provided that this clause (viii) shall not prohibit a confidential, non-public disclosure with respect to the matters for which a waiver may be sought under clause (xi) below);

 

(ix)             effect or seek (including, without limitation, entering into any discussions, negotiations, agreements or understandings with any third person), offer or propose (whether publicly or otherwise) to effect, or cause or participate in, or in any way, advise, assist or encourage any other person or entity in connection with any action which it is prohibited from taking under this Section 8(a) or which is inconsistent with its obligations under this Section 8(a) (including via any supporting public statement with respect thereto or any adverse public statement regarding the Company or the Board or any of its members);

 

(x)              knowingly take any action which would, or would reasonably be expected to, force the Company to make a public announcement (or result in the Company making a public announcement) regarding any of the types of the foregoing matters; or

 

(xi)             request, directly or indirectly, any amendment or waiver or modification of, or deviation from, any provision of this Section 8 (including this sentence) or any other provision of this Agreement by the Company or any of its agents or representatives (provided that this clause (xi) shall not prohibit a JEC member or a Costa Brava member from confidentially requesting from the Board of the Company an amendment, waiver or modification, or deviation, from this Section 8 to permit the JEC members or the Costa Brava members (respectively) to engage in a transaction subject to clause (v) above or for them to exceed the ownership limitation set forth in clause (iv) above).

 

KIT digital also said its Board will nominate and support each of Mr. Hamot and Mr. Heiland for the 2012 annual meeting of shareholders. The restrictions and nomination provisions will run at least through KIT digital’s 2012 annual meeting of shareholders and will potentially apply through the 2013 annual meeting. The standstill agreement itself will terminate following the 2013 annual meeting of shareholders and is subject to various other terms and conditions.

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Related Content:

Press Release: KIT digital Adds Shareholder Representation to Board of Directors

Text of Standstill Agreement Between KIT Digital, JEC Capital Partners, and Costa Brava

Activist Shareholder Drama Continues at Miranda Technologies

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© Devoncroft Partners. All Rights Reserved.

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