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UNITED STATES |
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SECURITIES AND EXCHANGE COMMISSION |
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Washington, D.C. 20549 |
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SCHEDULE 13D |
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Under the Securities Exchange Act of 1934
(Amendment No. 2)*
TheStreet, Inc.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
88368Q103
(CUSIP Number)
Ernest C. Mysogland
Spear Point Capital Management LLC
400 Poydras Street, Suite 2100
New Orleans, LA 70130
(203) 221-2641
FiveT Capital AG
Allmendstrasse 140
8041 Zurich, Switzerland
+41 43 3222510
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 29, 2016
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 88368Q103 | |||||
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Names of Reporting Persons | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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6. |
Citizenship or Place of Organization | |||
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Number of |
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Sole Voting Power | |||
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Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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14. |
Type of Reporting Person (See Instructions) | |||
CUSIP No. 88368Q103 | |||||
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1. |
Names of Reporting Persons | |||
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2. |
Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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4. |
Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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6. |
Citizenship or Place of Organization | |||
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Number of |
7. |
Sole Voting Power | |||
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8. |
Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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14. |
Type of Reporting Person (See Instructions) | |||
CUSIP No. 88368Q103 | |||||
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1. |
Names of Reporting Persons | |||
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2. |
Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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4. |
Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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6. |
Citizenship or Place of Organization | |||
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Number of |
7. |
Sole Voting Power | |||
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8. |
Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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14. |
Type of Reporting Person (See Instructions) | |||
CUSIP No. 88368Q103 | |||||
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1. |
Names of Reporting Persons | |||
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2. |
Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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4. |
Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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6. |
Citizenship or Place of Organization | |||
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Number of |
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Sole Voting Power | |||
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8. |
Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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14. |
Type of Reporting Person (See Instructions) | |||
CUSIP No. 88368Q103 | |||||
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1. |
Names of Reporting Persons | |||
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2. |
Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Number of |
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Sole Voting Power | |||
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8. |
Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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14. |
Type of Reporting Person (See Instructions) | |||
CUSIP No. 88368Q103 | |||||
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1. |
Names of Reporting Persons | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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4. |
Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Number of |
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Sole Voting Power | |||
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Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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14. |
Type of Reporting Person (See Instructions) | |||
CUSIP No. 88368Q103 | |||||
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1. |
Names of Reporting Persons | |||
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2. |
Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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4. |
Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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6. |
Citizenship or Place of Organization | |||
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Number of |
7. |
Sole Voting Power | |||
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8. |
Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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14. |
Type of Reporting Person (See Instructions) | |||
CUSIP No. 88368Q103 | |||||
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1. |
Names of Reporting Persons | |||
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2. |
Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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4. |
Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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6. |
Citizenship or Place of Organization | |||
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Number of |
7. |
Sole Voting Power | |||
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8. |
Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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14. |
Type of Reporting Person (See Instructions) | |||
CUSIP No. 88368Q103 | |||||
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1. |
Names of Reporting Persons | |||
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2. |
Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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4. |
Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Number of |
7. |
Sole Voting Power | |||
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8. |
Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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14. |
Type of Reporting Person (See Instructions) | |||
CUSIP No. 88368Q103 | |||||
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1. |
Names of Reporting Persons | |||
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2. |
Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
x | ||
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(b) |
o | ||
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3. |
SEC Use Only | |||
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4. |
Source of Funds (See Instructions) | |||
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5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Number of |
7. |
Sole Voting Power | |||
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8. |
Shared Voting Power | ||||
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9. |
Sole Dispositive Power | ||||
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10. |
Shared Dispositive Power | ||||
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11. |
Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x | |||
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13. |
Percent of Class Represented by Amount in Row (11) | |||
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Type of Reporting Person (See Instructions) | |||
Item 1. Security and Issuer
This statement relates to the common stock, par value $.01 per share (the Common Stock), of TheStreet, Inc., a Delaware corporation (the Issuer), having its principal executive offices at 14 Wall Street, 15th Floor, New York, NY, 10005.
The Reporting Persons filed a Schedule 13D relating to the Common Stock of the Issuer with the U.S. Securities and Exchange Commission on March 8, 2016 (the Initial Schedule 13D). The Initial Schedule 13D was amended by Amendment No. 1 filed on March 11, 2016. The Initial Schedule 13D, as amended by Amendment No. 1, is further amended by this Amendment No. 2 (this Amendment) which is being filed by the Reporting Persons to furnish additional information as set forth herein. All information set forth in the Initial Schedule 13D, as previously amended and as further amended hereby, is incorporated by reference. All capitalized terms not otherwise defined shall have the meanings ascribed to such terms in the Initial Schedule 13D, as amended by Amendment No. 1.
Item 4. Purpose of Transaction
Item 4 is hereby amended to add the following:
As previously reported, on March 10, 2016 Reporting Persons Spear Point Capital Fund LP, Spear Point Condor LP, FiveMore Special Situations Fund Ltd, and FiveT Investment Management Ltd (collectively, the Stockholders) sent notice to the Issuer of their nominations of Mr. Johannes M. Roth and Mr. Alexius John Benedict Fenwick (the Nominees) for election to the Issuers Board of Directors at the Annual Meeting (the Nomination Notice). A copy of the Nomination Notice was attached to Amendment No. 1 as Exhibit 99.7.
In a letter dated April 15, 2016 addressed to Spear Point Capital Fund LP and Spear Point Condor LP, Sarah Fay, Chair of the Boards Nominating and Corporate Governance Committee, informed the Stockholders that the Issuers Chairman, Larry Kramer, had determined that the Nomination Notice was defective. The letter alleged the Stockholders did not demonstrate stock ownership as required by the Corporations policies governing stockholder nominations. In addition, the letter stated that no opportunity to cure the alleged defect was available and no waiver of the alleged defect would be offered. Further, the letter stated the Stockholders would not be permitted to proceed with their nominations of the Nominees at the Annual Meeting.
On April 29, 2016, Stockholders Spear Point Capital Fund LP and Spear Point Condor LP, on behalf of themselves and Stockholders FiveMore Special Situations Fund Ltd and FiveT Investment Management Ltd, wrote to the Board responding to such assertions. As expressed in the letter, there was no defect in the Nominating Notice; the Stockholders provided evidence of ownership of Common Stock in accordance with the Issuers policies governing stockholder nominations, in addition to all information required under such policies, prior to the deadline for stockholder nominations. The Stockholders demand to be permitted to proceed with their nominations at the Annual Meeting.
Pursuant to the requirements set forth in the Issuers policies, the Stockholders undertook to supplement certain information provided in the Nominating Notice regarding their ownership of Common Stock and derivative instruments, as well as other matters as provided in the policies, not later than ten (10) days after the record date for determining the stockholders entitled to notice of the Annual Meeting and/or to vote at the Annual Meeting.
In its Proxy Statement filed with the Securities and Exchange Commission (SEC) on April 29, 2016, the Issuer announced that the Board had fixed April 18, 2016 as the record date (the Record Date) with respect to determining stockholders entitled to notice of and to vote at the Annual Meeting. Since the Record Date was not disclosed until more than ten (10) days after the Record Date, the Issuer prevented the Stockholders from providing the supplemental ownership information required by the Issuers nominating policies within the ten (10) day period set forth in the policies. The Stockholders has provided such supplemental information in a letter dated May 2, 2016, to the Issuer.
A copy of the April 29, 2016 response letter sent by the Stockholders is attached hereto as Exhibit 99.10 and is incorporated herein by reference. A copy of the letter dated April 15, 2016 addressed to Spear Point Capital Fund LP and Spear Point Condor LP is attached hereto as Exhibit 99.11. A copy of the May 2, 2016 supplemental information letter sent by the Stockholders is attached hereto as Exhibit 99.12 and is incorporated herein by reference.
Item 7. Material to be Filed as Exhibits
Item 7 is hereby amended to add the following:
The following are filed herewith as exhibits to this statement:
Exhibit 99.10 |
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Letter dated April 29, 2016 from Stockholders |
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Exhibit 99.11 |
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Letter dated April 15, 2016 to Stockholders |
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Exhibit 99.12 |
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Letter dated May 2, 2016 from Stockholders |
In addition, Power of Attorney filed as Exhibit 24.1 to the Initial Schedule 13D is incorporated by reference.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: |
May 2, 2016 |
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SPEAR POINT CAPITAL MANAGEMENT LLC |
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By: |
/s/ Rodney A. Bienvenu, Jr. |
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Name: |
Rodney A. Bienvenu, Jr. |
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Title: |
Managing Member |
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SPEAR POINT CAPITAL PARTNERS LLC |
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By: |
/s/ Rodney A. Bienvenu, Jr. |
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Name: |
Rodney A. Bienvenu, Jr. |
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Title: |
Managing Member |
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SPEAR POINT CAPITAL FUND LP |
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By: |
Spear Point Capital Partners LLC |
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Its: |
General Partner |
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By: |
/s/ Rodney A. Bienvenu, Jr. |
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Name: |
Rodney A. Bienvenu, Jr. |
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Title: |
Managing Member |
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SPEAR POINT CONDOR LP |
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By: |
Spear Point Capital Partners LLC |
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Its: |
General Partner |
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By: |
/s/ Rodney A. Bienvenu, Jr. |
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Name: |
Rodney A. Bienvenu, Jr. |
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Title: |
Managing Member |
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/s/ Rodney A. Bienvenu, Jr. |
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Rodney A. Bienvenu, Jr. |
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/s/ Trevor L. Colhoun |
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Trevor L. Colhoun |
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/s/ Ernest C. Mysogland |
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Ernest C. Mysogland |
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FIVE MORE SPECIAL SITUATIONS FUND LTD |
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By: |
/s/ Rodney A. Bienvenu, Jr. |
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Name: |
Rodney A. Bienvenu, Jr. |
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by power of attorney |
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FIVET INVESTMENT MANAGEMENT LTD |
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By: |
/s/ Rodney A. Bienvenu, Jr. |
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Name: |
Rodney A. Bienvenu, Jr. |
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by power of attorney |
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FiveT Capital AG |
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By: |
/s/ Rodney A. Bienvenu, Jr. |
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Name: |
Rodney A. Bienvenu, Jr. |
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by power of attorney |
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ATTENTION |
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Intentional misstatements or omissions of fact constitute Federal Criminal Violations (See 18 U.S.C. 1001). |
Exhibit 99.10
Letter dated April 29, 2016 from Stockholders
Spear Point Capital Management LLC
400 Poydras Street, Suite 2100
New Orleans, LA 70130
April 29, 2016
Via Email, Facsimile and Federal Express
Board of Directors
TheStreet, Inc.
14 Wall Street, 15th Floor
New York, New York 10005
Attention: Sarah Fay, Chair, Nominating and Governance Committee (the Committee)
Re: Notice of Nomination of Directors for Election
at the 2016 Annual Meeting of Stockholders of TheStreet, Inc. (the Corporation)
Ladies and Gentlemen:
In a letter dated March 10, 2016 (the Notice), Spear Point Capital Fund LP, Spear Point Condor LP, FiveMore Special Situations Fund Ltd, and FiveT Investment Management Ltd (each a Stockholder and collectively, the Stockholders) provided due notice of their determination to nominate Johannes Minho Roth and Alexius John Benedict Fenwick (the Nominees) for election to the Board of Directors (the Board) of the Corporation at the 2016 Annual Meeting of Stockholders of the Corporation (the Annual Meeting). Reference is hereby made to such Notice and to the letter addressed to Spear Point Capital Fund LP and Spear Point Condor LP dated April 15, 2016, from Sarah Fay, Chair, Nominating and Governance Committee (the Deficiency Letter). This letter is submitted on behalf of all the Stockholders by the undersigned Stockholders in response to the Deficiency Letter.
Notice Complied With Requirements
The Deficiency Letter claims that the nomination set forth in the Notice (the Nomination) was not in accordance with the advance notice requirements for stockholder nominations. To the contrary, the Notice was intended to, and did, comply with the various requirements set forth in Corporations Corporate Governance Guidelines, the Corporations Policy Governing Director Qualifications and Nominations, and the Amended and Restated By-Laws of the Corporation (collectively, the Policies). Accordingly, the Stockholders must be permitted to proceed with the Nomination at the Annual Meeting, as they intend to do, and the stockholders of the Corporation must be permitted to vote to elect the Nominees to the Board.
The requirements set forth in the Policies are extensive and burdensome. The By-Laws and other Policies, which were adopted by the Board without stockholder approval or ratification, purport to restrict the stockholders inherent rights to nominate directors for election to the Board. The Policies condition stockholder nominations of directors on the compliance with certain advance notice procedures including the making of disclosures and provision of agreements and other documentation pertaining to the Nominees background and qualifications, as well as information regarding the nominating Stockholders ownership interests in the Corporation. These requirements exceed information reasonably necessary for the Board to review stockholder nominations, especially where the nominating stockholders are not seeking to include their nominees in the Corporations proxy statement. Nevertheless, the Stockholders complied with the Policies and provided all such information and documentation by
the nomination deadline.(1) The Stockholders specifically stated in the Notice that in the event the Corporation believes any further information is necessary, the Stockholders will provide any reasonably required information. The Stockholders were never informed any information was missing from the Notice.
Ownership Requirements
The Deficiency Letter acknowledges receipt of the Notice but claims the Notice was not in accordance with the Policies, alleging a single defect. This alleged defect was that, according to the Deficiency Letter, no Stockholders were listed by Corporations transfer agent as record holders on the date of the Notice, March 10, 2016.
Surely, if this was a fatal defect, the Board would not have waited for more than a month to inform the Stockholders. Nor would the Committee have interviewed the Nominees or taken any steps to consider the Nominees (even if the Committee was just going through the motions).
Imposing an ownership requirement on the date a stockholder provides notice of its intent to nominate a director candidate is not necessarily unreasonable. However, limiting nominations to record shareholders on the date of Notice is a requirement without a statutory basis. Requiring this formality at the time of Notice serves no legitimate purpose - certainly none that outweighs the importance of the stockholders voting franchise of which nomination rights are an essential part. To be clear, we do not debate the necessity of ensuring nominations and votes are made only by record stockholders at an annual meeting. But that is not at issue here. The issue is whether the Board and/or the Chairman should be able to block an otherwise proper stockholder nomination solely due to whether the nominating stockholder was a record holder more than 90 days before the meeting, and before any record date has been set for the meeting. The fact that such requirement was set forth in a By-Law is not determinative, especially where, as here, the By-Law was not adopted by the stockholders. While the Board may have the legal ability to adopt such a By-Law, that does not mean such By-Law is enforceable if it unreasonably impinges on stockholder rights or is inequitable in application.
Nevertheless, even under the By-Laws, as written, the alleged defect cannot stand. Interpretation of the By-Laws is not as simplistic as the Deficiency Letter contends. First, the By-Laws do not define stockholder of record in the nomination context. This term has different meanings in different contexts in corporate and securities matters. Reference to other By-Law provisions which state that the Corporation may recognize persons registered on its books as the owner entitled to vote and exercise other rights (Art. 5, Sec. 6) does not end the inquiry. By-Laws cannot exceed applicable law. In Delaware, issuers and their transfer agents are obligated to register stock transfers when instructions are made in accordance with the procedures of the applicable clearing and transfer system. In such events, the issuer and transfer agent cannot treat record holders as the person exclusively entitled to vote or exercise other rights. In other words, the Corporation cannot limit itself to checking a stockholder list and ignore the instructions and records of the electronic transfer system in which it participates. Stockholder records for public companies include electronic communications among various participants in the system, including the Depository Trust Corporation (DTC), the clearing and prime brokers, as well as the Corporations transfer agent.
The By-Laws recognize this reality and subject all other provisions - including the nomination provisions - to the provisions adopting this system. The By-Laws specifically provide that:
Notwithstanding any other provision in these By-Laws, the Corporation may adopt a system of issuance,
(1) In addition to the overly burdensome requirements, the Corporations advance notice By-Laws impose a deadline on nominations of 90 days prior to the anniversary of the last annual meeting. Institutional Shareholder Services, Inc. (ISS) Proxy Voting Guidelines state that shareholders should be able to submit nominations as close to the meeting date as possible and that To be reasonable, the companys deadline for shareholder notice of a proposal/ nominations must not be more than 60 days prior to the meeting . . . . The Corporation would be well advised to adopt more reasonable By-Laws to avoid the unnecessary time and expense of these disputes. The By-Laws used to provide for a 60 day deadline but the Board amended the By-Laws, without stockholder approval, and extended the notice deadline to 90 days. While the Notice was proper under the current By-Laws, this dispute would not have been remotely conceivable if the By-Laws provided for a 60 day deadline.
recordation and transfer of shares of the Corporation by electronic or other means not involving any issuance of certificates, including provisions for notice to purchasers in substitution for any required statements on certificates, and as may be required by applicable corporate securities laws, which system has been approved by the Securities and Exchange Commission. (Art. 5, Sec. 6).
In other words, the Bylaws recognize the reality of public corporations and trading in uncertificated stock. Participation in this system is required for publicly traded companies. In this system, the only act which a stockholder with beneficial ownership can undertake in order to register ownership of shares is to issue an instruction to transfer shares into direct ownership, which is made by book entry by the Corporations transfer agent. The undersigned Stockholders completed those steps, prior to the nomination deadline, and the recordation of ownership has been duly made. Since the Bylaw provisions regarding the electronic direct ownership and recordation system supersede any other By-Law including the record stockholder requirement of the advance notice sections, such requirement is satisfied if the nominating stockholder has taken the necessary recordation steps. Accordingly, the requirement was satisfied and the Notice is not defective.
Just as significantly, the Board adopted a policy governing stockholder nominations (aptly titled, Policy Governing Director Qualifications and Nominations (the Nominating Policy)) and represented that it will act according to this policy. Having adopted the Nominating Policy, the Board must now abide by it in the administration of the nomination process including in its interpretation and enforcement of By-Laws and other Policies.(2)
The Nominating Policy specifically addresses the ownership requirement for stockholders making nominations, requiring the stockholder to provide a representation that the stockholder is a record holder of the Companys securities, or if the stockholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b) of the Securities Exchange Act of 1934. That Rule, in turn, provides for various methods including delivering a stockholders Schedule 13-D to the corporation. The Stockholders provided their Schedule 13-D as part of the Notice, thereby establishing ownership in accordance with the Policy. Thus, again, the Notice is not defective.
Cure
For the avoidance of doubt, even if one were to consider the transfer instructions and delivery of Schedule 13-D as ineffective to establish ownership, the Stockholders note that in the Notice, they reserved the right to make any necessary corrections or supplements to the Notice to resolve any deficiencies. Since the undersigned Stockholders have been duly recorded as record holders, the defect identified in the Deficiency Letter, to the extent it existed, has been cured.
Waiver
The Deficiency Letter goes on to state Moreover, we do not believe it would be appropriate to treat the Stockholders differently from our other stockholders by waiving the requirements of the Companys advance notice bylaw. We agree Board should be even handed in the administration of the nomination process and that it should treat stockholders consistently. However, the Boards actions in administering this process must be based on the best interest of the stockholders and must not disenfranchise stockholders from exercising their nomination rights. We are not aware of any prior stockholder nomination which was rejected by the Board under the same circumstances as in the present case. Regardless, even if the circumstances in a prior case were the same, if the Board erred in its administration of the nomination and election process previously, such error does not
(2) Lest the Board contend the Policy was directed at proxy access proposals governed by Rule 14a-8(b) alone and therefore inapplicable to nominations not made under that Rule, it is clear the Policy is not so limited. Rather, the Board decided to incorporate the methods of establishing ownership contained in the Rule to the nomination requirements whether or not the nominating stockholder is seeking such proxy access.
authorize the Board to repeat the same mistake with the Nomination presented by the Stockholders. The Board needs to act in accordance with its duties to allow stockholders to exercise their nomination rights, and must let our Nominations proceed at the Annual Meeting. If, to the Boards way of thinking, this would constitute a waiver of nomination conditions, then it should grant such waiver and permit the Nomination to proceed.
Usurpation of Stockholder Rights
The Board has been disenfranchising the stockholders of the Corporation, and the determinations set forth in the Deficiency Letter are the latest examples of this trend.
The Corporations Proxy Statement filed April 29, 2015 in connection with the 2015 annual stockholder meeting, informed stockholders that the Board had determined the appropriate size was five directors, reducing the Board by one seat, an action recommended by the Committee. However, on May 22, 2015, less than one month later, and still prior to the 2015 annual meeting, the Board wrote to stockholders that the Board had determined at the beginning of this year, i.e. 2015, that the Corporation would benefit from an additional director. The Board went on to state that the Board would appoint a new director, Mr. Zacharias, after the 2015 annual meeting. Despite informing stockholders in the 2015 Proxy Statement that five seats was the appropriate Board size, the Board had already determined to increase its size to six.
After the 2015 annual meeting, the Board appointed Mr. Zacharias to the Board and the Board was once again comprised of six members. But the Board did not stop there. In October 2015, the Board appointed Larry Kramer to the Board following recommendation by the Committee. Since there was no vacancy at the time, apparently the Board had determined it should be expanded again adding a seventh seat for Mr. Kramer, although the Corporation did not explain such determination. Subsequently, in January 2016 the Board appointed Bowers Espy to the Board, filling the vacancy created by the resignation of director Mark Walsh.
Accordingly, the Board is currently comprised of six members, with one vacant seat (created by the departure of former CEO Elisabeth DeMarse in February). Of the six members, three have been appointed by the Board since the 2015 annual meeting and have never stood for election. While one of the unelected directors was appointed due to a vacancy created by an elected directors resignation, two of the unelected directors occupy seats created by the Board without stockholder approval and after informing stockholders that the Boards size should be reduced.
This is not commentary on the qualifications of any of the appointed directors. They may prove to be worthwhile additions to the Board. But the stockholders rights to elect directors must not be circumvented by the Boards exercise of its appointment powers. The right to elect directors is a right of the stockholders. The Boards permissive authority to fill director vacancies cannot be used to undermine the stockholders rights.
We see a further example of this overreaching in the nomination of Mr. Kramer as a Class II director to stand for election at the Annual Meeting, when he is simultaneously serving under his appointment as a Class I director. While the announcement of this unusual nomination states that Mr. Kramer will resign his current Class I seat (so that he would not be occupying two board seats at the same time), the resignation from his current seat is conditioned on his election as a Class II director at the Annual Meeting. Thus, even if Mr. Kramer were to lose in the Class II election to be held at the Annual Meeting, he will remain on the Board in his Class I seat. In other words, the Board and the Committee believe that even if the stockholders reject Mr. Kramer, he should nevertheless remain on the Board in his unelected seat. Of course, if the Board has its way and our Nomination is prohibited, the election will be uncontested. In such event, there will be no competing candidates and a single vote for Mr. Kramer will ensure his election regardless of whether the majority of stockholders withhold their votes from him.
Conclusion
The decisions conveyed in the Deficiency Letter show again the Boards utilization of the shareholder election apparatus for the self-interest of insiders and incumbents in contravention of the obligations of the Board, the Committee and the Chairman to the stockholders. For the benefit of all stockholders, the Board, the Committee and the Chairman must either (i) rescind these actions and acknowledge there was no defect in the Notice, (ii)
acknowledge the alleged defect was cured, or (iii) waive the alleged defect. In any event, the Nomination must be permitted to proceed at the Annual Meeting.
The Corporations business is in large part aimed at investors in public companies. As part of its mission, it should be at the forefront of responsive and accountable corporate governance for its investors, rather than a laggard. The advance notice By-Laws, while in general not uncommon, must be limited so as not to impede stockholders rights, while providing for the orderly conduct of the Corporations governance. Reforms such as those outlined in ISS Guidelines, for example, should be the norm at the Corporation. The relics of the classified Board, plurality vote and other defensive measures should also be reformed or eliminated. It would be beneficial for all stockholders if the Board were to take these steps proactively rather than fighting to entrench its position. In our opinion, a proactive, responsive and accountable Board would be more likely to lead the Corporation to enhanced value.
Note that neither the delivery of this letter, the Notice nor any delivery by any Stockholder or Nominee of additional information to the Corporation prior to, on or after the date hereof shall be deemed to constitute an admission by any Stockholder, Nominee or any of their respective affiliates (if any) that such delivery is required or that each and every item or any item of information is required or as to the legality or enforceability of any notice requirement or any other matter, or a waiver by any Stockholder, Nominee or any of their respective affiliates (if any) of their right to contest or challenge, in any way, the validity or enforceability of any notice requirement, the actions described, the determination of the defect described in the Deficiency Letter, the stated intention to declare the Notice to be defective at the Annual Meeting, the stated intention to prevent the Nomination from proceeding at the Annual Meeting, or any other matter (including actions taken by the Board in anticipation of, or following receipt of, this letter or the Notice).
Very truly yours, |
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SPEAR POINT CAPITAL FUND LP |
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SPEAR POINT CONDOR LP |
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By: SPEAR POINT CAPITAL MANAGEMENT LLC | |||
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By: |
/s/ Ernest C. Mysogland |
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Name: |
Ernest C. Mysogland |
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Title: |
Managing Member |
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Cc: FiveMore Special Situations Fund Ltd
FiveT Investment Management Ltd
Exhibit 99.11
Letter dated April 15, 2016 toStockholders
Sarah Fay
Chairman, Nominating and Corporate Governance Committee
TheStreet, Inc.
14 Wall Street, 15th Floor
New York, New York 10005
April 15, 2016
VIA EMAIL (JR@SPEARPOINTLLC.COM) AND COURIER
SPEAR POINT CAPITAL FUND LP SPEAR POINT CONDOR LP
c/o Spear Point Capital Management LLC 400 Poydras Street, Suite 2100
New Orleans, LA 70130
Attention: Ernest C. Mysogland
Re: Your recommendations for the Board of Directors of TheStreet, Inc.
Dear Mr. Mysogland:
As you know, the Nominating and Corporate Governance Committee (the Committee) of TheStreet, Inc. (the Company ) received a letter from Spear Point Capital Management LLC on behalf of Spear Point Capital Fund LP, Spear Point Condor LP, FiveMore Special Situations Fund Ltd, and FiveT Investment Management Ltd (each a Stockholder and collectively, the Stockholders) dated March 10, 2016 (the Notice) in which the Stockholders proposed to nominate Johannes Minho Roth and Alexius John Benedict Fenwick for election to the Companys Board of Directors (the Board) at the 2016 Annual Meeting of Stockholders of the Company (the Nomination Proposal). We have discussed the Notice with counsel and the Chairman of the Board, Larry Kramer, who will also serve as chairperson of the 2016 Annual Meeting of Stockholders (the Annual Meeting). Pursuant to Article II, Section 7(a)4 of the Companys Amended and Restated By-Laws (the Bylaws), Mr. Kramer has determined, and will so declare at the Annual Meeting, that the Nomination Proposal was not made in accordance with Article II, Section 7(a) of the Bylaws and thus will not be considered at the Annual Meeting.
Article II, Section 7(a)l of the Bylaws provides that [n]ominations of persons for election to the Board of Directors and the proposal of other business to be considered by the stockholders at an annual meeting of stockholders may be made only . . .(c) [as] otherwise properly brought before the annual meeting by any stockholder of the Company (i) who is a stockholder of record (Record Stockholder) on the date of the giving of the notice provided for in this Section 7(a) and on the record date for determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 7(a); clause (c) of this sentence shall be the exclusive means for a stockholder to make nominations or to submit other business . . . before an annual meeting of stockholders (emphasis added).
In the Notice, you provide that As set forth in the Schedule 13D....the Stockholders own, in aggregate, 3,440,384 shares of common stock, par value $.01 per share . . . of the Corporation . . .. After reviewing a certified list of the Companys record holders as of March 10, 2016, produced by American Stock Transfer & Trust Company, LLC, the Companys transfer agent, we have confirmed that none of the Stockholders were stockholders of record on such date. Because none of the Stockholders were stockholders of record on the date notice of the nomination was given, the Notice does not comply with the advance notice provisions in Article II, Section 7(a) of the Bylaws. As you may know, the advance notice period for the Annual Meeting closed on March 13, 2016, and therefore the defect in your Notice cannot be cured. Moreover, we do not believe it would
be appropriate to treat the Stockholders differently from our other stockholders by waiving the requirements of the Companys advance notice bylaw. Consequently, the Nomination Proposal included in the Notice will not be considered at the Annual Meeting.
Notwithstanding the defect in the Notice, I would like to inform you that the Committee carefully considered both Mr. Roth and Mr. Fenwick as potential director candidates, and interviewed each of them at length by telephone. Our Chairman Mr. Kramer is also aware of Mr. Fenwicks business experience given their industry experience and he has also spoken with both Mr. Fenwick and Mr. Roth at length. After assessing the information provided in the Notice, as well as information the Company obtained through its own research, and after completing a review of the recommended candidates in light of those persons credentials, suitability, skills, capabilities, experience and knowledge of the Company and applying the Committee members views of the criteria our Board is seeking in Board members as set forth in the Boards Policy Governing Director Qualifications and Nominations(the Policy), the Committee has concluded that neither of your recommended nominees possesses the combination of attributes sought by the Committee, as informed by the Policy, in evaluating a potential director candidates ability to make a meaningful contribution to the Boards oversight of the business and affairs of the Company. As a result the Committee has recommended to the Board, and the Board has approved, the nomination of Keith Hall and Larry Kramer for election to the Board at the Annual Meeting.
We remain open to dialogue with you, as we have throughout the course of your ownership in the Company, and hope for a constructive conversation as we move forward. We understand that you have requested an additional meeting with management in May to share your views on the Companys business and we look forward to your thoughts and input at that meeting.
Very truly yours, |
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/s/ Sarah Fay |
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Sarah Fay |
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Chair, Nominating and Corporate Governance Committee |
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TheStreet, Inc. |
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cc: FiveMore Special Situations Fund Ltd
FiveT Investment Management Ltd
c/o FiveT Capital AG
Allmendstrasse 140
8041 Zurich, Switzerland
Fax: +41 43 3222510
Exhibit 99.12
Letter dated May 2, 2016 from Stockholders
Spear Point Capital Management LLC
400 Poydras Street, Suite 2100
New Orleans, LA 70130
May 2, 2016
Via Email, Facsimile and Federal Express
Board of Directors
TheStreet, Inc.
14 Wall Street, 15th Floor
New York, New York 10005
Attention: Eric F. Lundberg, Chief Financial Officer and Corporate Secretary
Sarah Fay, Chair, Nominating and Governance Committee
Re: Supplement of Notice of Nomination of Directors for Election
at the 2016 Annual Meeting of Stockholders of TheStreet, Inc. (the Corporation)
Ladies and Gentlemen:
Reference is made to the letter dated March 10, 2016 (the Notice) submitted by and on behalf of Spear Point Capital Fund LP, Spear Point Condor LP, FiveMore Special Situations Fund Ltd, and FiveT Investment Management Ltd (each a Stockholder and collectively, the Stockholders) which provided due notice of the Stockholders determination to nominate Johannes Minho Roth and Alexius John Benedict Fenwick (the Nominees) for election to the Board of Directors (the Board) of the Corporation at the 2016 Annual Meeting of Stockholders of the Corporation (the Annual Meeting). As described herein, this letter (this Supplement) hereby supplements the Notice and the information provided therein.
Pursuant to the requirements set forth in the Corporations Corporate Governance Guidelines, the Corporations Policy Governing Director Qualifications and Nominations, and the Amended and Restated By-Laws of the Corporation (collectively, the Policies), the Stockholders undertook to supplement certain information regarding their ownership of common stock, par value $.01 per share (the Common Stock), of the Corporation, derivative instruments, and certain other matters as provided in the Policies, not later than ten (10) days after the record date for determining the stockholders entitled to notice of the Annual Meeting and/or to vote at the Annual Meeting, in order to disclose such ownership as of such record date. (See, Corporations By-Laws, Art. II, Sec. 7(a)2.(C)(2)).
In its Proxy Statement filed with the Securities and Exchange Commission (SEC) on April 29, 2016, the Corporation announced that the Board fixed April 18, 2016 as the record date (the Record Date) with respect to determining stockholders entitled to notice of and to vote at the Annual Meeting. Since the Record Date was not disclosed until more than ten (10) days after the Record Date, the Corporation prevented the Stockholders from providing the supplemental ownership information required by the Policies within the ten (10) day period set forth in the Policies. The Stockholders are providing such supplemental information herein.
Therefore, please be advised that, as of the Record Date, Spear Point Condor LP owns 1,167,802 shares of Common Stock, Spear Point Capital Fund LP owns 572,582 shares of Common Stock, FiveMore Special Situations Fund Ltd owns 1,200,0000 shares of Common Stock and FiveT Investment Management Ltd owns 500,0000 shares of Common Stock. Each Stockholder owns such respective shares of Common Stock directly and of record.
The Stockholders filed a Schedule 13D (as may be amended from time to time, the Schedule 13D) with the SEC on March 8, 2016, filed an amendment thereto on March 11, 2016 and have filed or will file a further
amendment thereto on the date hereof. Reference is hereby made to the Schedule 13D. A copy of the amendment to the Schedule 13D which has been or will be filed today is attached hereto as Exhibit A and is incorporated herein by reference.
Furthermore, as of the Record Date, except as stated in the Schedule 13D, or as otherwise stated in this Supplement, each of the Stockholders hereby states that it (i) it does not, directly or indirectly, own beneficially any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a Derivative Instrument), and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (ii) it is not party to any proxy, contract, arrangement, understanding, or relationship pursuant to which either party has a right to vote, directly or indirectly, any shares of any security of the Corporation other than to the extent to which that certain Agreement, dated March 8, 2016, by and among the Stockholders and the other persons identified therein, which is attached to the Schedule 13D as Exhibit 99.2, could be characterized as such, (iii) it does not have any short interest in any security of the Corporation held by each such party (with the understanding that for these purposes, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (iv) it does not have any rights to dividends on the shares of the Corporation owned beneficially directly or indirectly by each such party that are separated or separable from the underlying shares of the Corporation, except to the extent, and in the same manner, that such rights are afforded to holders of Common Stock pursuant to the Corporations certificate of incorporation, (v) it does not have any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which it is a general partner nor does it, directly or indirectly, beneficially own an interest in a general partner, and (vi) it does not have any performance-related fees (other than an asset-based fee) that it is directly or indirectly entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice. The terms of the Stockholders partnership agreements include customary incentive allocations to their general partners based on increases in the net asset value.
All Exhibits or other attachments hereto, and any other information or documents referred to herein or therein, are hereby incorporated into, and made part of, this Supplement. Accordingly, all matters disclosed in any part of this Supplement, including the Exhibits, attachments or other documents or information incorporated herein, should be deemed disclosed for all purposes of this Supplement and the Notice.
Unless expressly indicated otherwise herein, information is set forth herein as of the close of business on the date hereof. Neither the delivery of this Supplement, the Notice, any other correspondence or communication from the Stockholders, nor any delivery by any Stockholder or Nominee of additional information to the Corporation from and after the date of the Notice shall be deemed to constitute an admission by any Stockholder, Nominee or any of their respective affiliates (if any) that such delivery is required or that each and every item or any item of information is required or as to the legality or enforceability of any notice requirement or any other matter, or a waiver by any Stockholder, Nominee or any of their respective affiliates (if any) of their right to contest or challenge, in any way, the validity or enforceability of any notice requirement or any other matter (including actions taken by the Board in anticipation of, or following receipt of, the Notice, this Supplement, or any other correspondence or communication from the Stockholders).
In the event any statement or other information in this Supplement or in the Notice is not correct, or to the extent any applicable information has been omitted from this Supplement or the Notice, the Stockholders and Nominees reserve the right to correct and/or supplement any such statement or other information set forth in this Supplement or in the Notice.
[Signature pages follow]
* * * * *
Stockholder Signature Page
IN WITNESS WHEREOF, the Stockholders have caused this Notice to be duly executed and delivered on the date and year first above written:
SPEAR POINT CAPITAL FUND LP |
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SPEAR POINT CONDOR LP |
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By: SPEAR POINT CAPITAL MANAGEMENT LLC | |||
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By: |
/s/ Ernest C. Mysogland |
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Name: |
Ernest C. Mysogland |
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Title: |
Managing Member |
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Addresses for Notices:
SPEAR POINT CAPITAL FUND LP
SPEAR POINT CONDOR LP
c/o Spear Point Capital Management LLC
400 Poydras Street, Suite 2100
New Orleans, LA 70130
Phone: (504) 252-1369
Fax: (203) 621-3180
Attention: Ernest C. Mysogland
Stockholder Signature Page
IN WITNESS WHEREOF, the Stockholders have caused this Notice to be duly executed and delivered on the date and year first above written:
FIVEMORE SPECIAL SITUATIONS FUND LTD |
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FIVET INVESTMENT MANAGEMENT LTD |
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By: FIVET CAPITAL AG |
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By: |
/s/ Johannes M. Roth |
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Name: |
Johannes M. Roth |
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CEO |
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Address for Notices:
FiveMore Special Situations Fund Ltd
FiveT Investment Management Ltd
c/o FiveT Capital AG
Allmendstrasse 140
8041 Zurich, Switzerland
+41 43 3222510
Exhibit A
Copy of Schedule 13D Amendment No. 2 dated May 2, 2016
[Copy of this Amendment No. 2 provided]