-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CIua1lTV46tJV6+skE4cTkDuAZsvEGBePDAZ6klTvdSjgtYMKS2DKUS7va9cZtAa cF2aNq+CvAigWnwoOTBz8g== 0000932799-07-000054.txt : 20070206 0000932799-07-000054.hdr.sgml : 20070206 20070206155847 ACCESSION NUMBER: 0000932799-07-000054 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20070206 DATE AS OF CHANGE: 20070206 GROUP MEMBERS: CHARTWELL CAPITAL INVESTORS II, LP GROUP MEMBERS: FURSA ALTERNATIVE STRATEGIES LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INTEGRAL SYSTEMS INC /MD/ CENTRAL INDEX KEY: 0000718130 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 521267968 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-55793 FILM NUMBER: 07584518 BUSINESS ADDRESS: STREET 1: 5000 PHILADELPHIA WAY CITY: LANHAM STATE: MD ZIP: 20706 BUSINESS PHONE: 3017314233 MAIL ADDRESS: STREET 1: 5000 PHILADELPHIA WAY CITY: LANHAM STATE: MD ZIP: 20706 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Fursa Alternative Strategies LLC CENTRAL INDEX KEY: 0001218315 IRS NUMBER: 134050836 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 200 PARK AVE STREET 2: 54TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10166-3399 BUSINESS PHONE: 2129228200 MAIL ADDRESS: STREET 1: 200 PARK AVE STREET 2: 54TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10166-3399 FORMER COMPANY: FORMER CONFORMED NAME: MELLON HBV ALTERNATIVE STRATEGIES LLC DATE OF NAME CHANGE: 20030211 SC 13D/A 1 integral13d.txt SCHEDULE 13D AMENDMENT NO. 12 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Amendment No. 12 -------- INTEGRAL SYSTEMS, INC. ------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share ------------------------------------------------------------------------------- (Title of Class of Securities) 45810H107 ------------------------------------------------------------------------------- (CUSIP Number) Fursa Alternative Strategies LLC 200 Park Avenue, 54th Floor New York, NY 10166-3399 (212) 922-8200 ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) February 2, 2007 ------------------------------------------------------------------------------- (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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) 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). Page 1 of 6 CUSIP No. 45810H107 - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Fursa Alternative Strategies LLC I.R.S. No.: 13-4050836 - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ](b)[ ] - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,330,000 - -------------------------------------------------------------------------------- 8 SHARED VOTING POWER 0 - -------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 1,330,000 - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,330,000 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions) [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.0% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (see Instructions) IA - ------------------------------------------------------------------------------- Page 2 of 6 CUSIP No. 45810H107 - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Chartwell Capital Investors II, LP (59-3506083) - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ](b)[ ] - ------------- ----------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 514,906 - -------------------------------------------------------------------------------- 8 SHARED VOTING POWER 0 - -------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 514,906 - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 514,906 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions) [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.7% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (see Instructions) PN - ------------------------------------------------------------------------------- Page 3 of 6 INTRODUCTION: Fursa Alternative Strategies LLC, a registered investment advisor ("Fursa"), which beneficially owns, on behalf of affiliated investment funds and separately managed accounts over which it exercises discretionary authority, approximately 12% of the Common Stock of Integral Systems, Inc. (the "Issuer"), and Chartwell Capital Investors II, L.P. ("Chartwell", and together with Fursa, the "Reporting Persons") are filing this joint Amendment No. 12 to Schedule 13D to disclose that they have reached an agreement with the Issuer (the "Letter Agreement"), pursuant to which, among other things, (i) the Issuer will repeal certain bylaw amendments relating to the staggered board of directors and procedures for calling of a special meeting and the removal of directors, (ii) Mr. William F. Harley, III, Chief Investment Officer of Fursa, will be appointed to the Board of Directors of the Issuer at the next meeting of the Board, currently scheduled for February 7, 2007, (iii) the Board of Directors will conduct a comprehensive analysis of all strategic options to maximize shareholder value, (iv) Fursa will vote for the slate of eight (8) directors, of which Mr. Harley will be one, agreed upon by the entire Board prior to mailing the proxy materials for the next annual meeting, and (v) Chartwell will withdraw the shareholder proposal submitted to the Issuer in November 2006 inasmuch as the objective of such proposal will have been accomplished prior to the annual meeting. The foregoing description is qualified in its entirety by the Letter Agreement attached hereto as Exhibit A. A press release announcing the Letter Agreement is attached hereto as Exhibit B. As fiduciaries for its investors, Fursa and Chartwell are not bound to vote their respective shares in any particular manner on any issue requiring shareholder action, except the agreement to vote its shares for the slate of directors at the Issuer's next annual meeting, as described above. The Reporting Persons may be deemed to constitute a "group" for purposes of reporting on Schedule 13D. This is amendment number 12 to the report on Schedule 13D that has been filed by Fursa and Chartwell. Each of Fursa and Chartwell retain their respective sole power to vote or to direct the vote and sole power to dispose or to direct the disposition of the number of shares reported herein as held by such person; as such, each of Fursa and Chartwell expressly disclaim beneficial ownership of the stock held by the other. The Reporting Persons have previously filed a joint amendment to Fursa's Schedule 13D as a group. This amendment no. 12 reflects no changes in the previously reported holdings of the Reporting Persons. ITEM 4. PURPOSE OF TRANSACTION The discussion under the heading "Introduction" above is incorporated herein by reference. Page 4 of 6 ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (i)(a) As of February 6, 2007, on behalf of affiliated investment funds and separately managed accounts over which it exercises discretionary authority, Fursa beneficially owns 1,330,000 shares of the Issuer's Common Stock, representing approximately 12.0% of the outstanding Common Stock (based on 11,058,306 shares outstanding as reported by the Issuer on its Form 10-K for its annual period ended September 30, 2006). There have been no changes in Fursa's interests in the Issuer since the date of its last amendment to Schedule 13D, filed with the SEC on January 18, 2007. (ii)(b) As of February 6, 2007, Chartwell beneficially owns 514,906 shares of the Issuer's Common Stock, representing approximately 4.7% of the outstanding Common Stock (based on 11,058,306 shares outstanding as reported by the Issuer on its Form 10-K for its annual period ended September 30, 2006). There have been no changes in Chartwell's interests in the Issuer during the past sixty (60) days. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The discussion under the heading "Introduction" above is incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS: Exhibit A Letter Agreement by and between the Reporting Persons and the Issuer Exhibit B Joint Press Release of the Reporting Persons and the Issuer announcing the Letter Agreement Page 5 of 6 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. Dated: February 6, 2007 FURSA ALTERNATIVE STRATEGIES LLC, a Delaware Limited Liability Company By: /s/ William F. Harley III -------------------------------- Name: William F. Harley III Title: Chief Investment Officer Page 6 of 6 EX-99 2 integral_exa.txt EXHIBIT A Fursa Alternative Strategies LLC 200 Park Avenue, 54th Floor New York, NY 10166-3399 January 31, 2007 Via Telecopy and Overnight Express Integral Systems, Inc. 5000 Philadelphia Way, Suite A Lanham, MD 20706-4417 Attention: Mr. Peter Gaffney Dear Pete: This will confirm that Fursa Alternative Strategies LLC ("Fursa"), William F. Harley, III ("Harley") and Chartwell Capital Investors II, L.P. ("Chartwell") will not initiate or support a change in the membership of the Board of Integral Systems, Inc. ("Integral") prior to 2008 in view of our mutual commitment to the following effect: o By prompt Board action, Integral will undo the by-law changes made by the Company in the Summer of 2006, including de-staggering the Board and reinstating the prior by-laws regarding the calling of special meetings and removing directors as they existed prior to March, 2006 (except that the changes made by Integral last summer to the section of the by-laws addressing the conduct of meetings (Section 8 of Article II) shall remain in effect). o Harley will join the Board at the next Board meeting, now scheduled for February 7, 2007 (but in any event, by a date sufficiently prior to the Annual Meeting this April to permit the Company to timely provide its proxy materials), and will be included in the Company's slate of Directors recommended for election at that Annual Meeting. o Prior to mailing proxy materials for the next Annual Meeting, the Board will agree upon a slate of eight (8) directors for election at such meeting, of which Harley will be one (1), and the remaining seven (7) other nominees will be currently serving Directors. A new outside Chairman would be selected from among the existing Directors by the Board prior to the Annual Meeting. o Beginning at the next Board meeting, the entire Board will work together to identify available strategic alternatives, and set goals for enhancing shareholder value, including potential acquisitions, mergers, dispositions, recapitalizations and plans for internal growth. o Chartwell agrees to withdraw its shareholder proposal submitted to Integral on November 17, 2006. o Harley will honor his responsibilities as a Director of Integral including confidentiality of Board deliberations and of Integral's proprietary information. Harley acknowledges that his responsibilities include compliance with Integral's Insider Trading Policy. o The next Annual Meeting will be conducted in accordance with the provisions of the Addendum attached hereto. While Harley is a member of the Board, and the Company agrees to include him in its slate for election at the upcoming Annual Meeting, Harley, Fursa and Chartwell will abide by the foregoing commitment with the understanding and on the condition that the Company will do likewise. As the obligations of the parties hereto are interdependent, any failure by the Company to honor the foregoing commitment shall release Harley, Fursa and Chartwell from their respective commitments. As fiduciaries for our investors, we note that nothing here binds Fursa to vote its shares in any particular manner on any issue requiring shareholder action, except that Fursa will agree to vote for the Slate of Directors described above. [Remainder of Page Intentionally Blank] Very truly yours, FURSA ALTERNATIVE STRATEGIES LLC By: /s/ William F. Harley, III ----------------------------------- Name: William F. Harley, III Title: Chief Investment Officer CHARTWELL CAPITAL INVESTORS II, L.P. By: /s/ Kenneth E. Purcell ----------------------------------- Name: Kenneth E. Purcell Title: Managing Director WILLIAM F. HARLEY, III, INDIVIDUALLY /s/ William F. Harley, III ----------------------------------- AGREED: INTEGRAL SYSTEMS, INC. By: /s/ Peter J. Gaffney ----------------------------- Name: Peter J. Gaffney Title: Chief Executive Officer ADDENDUM AGREEMENT GOVERNING CONDUCT OF ANNUAL MEETING 1. The chairman of the meeting (the "Chairman") of the 2007 Annual Meeting of Stockholders of Integral Systems, Inc., currently scheduled to be held in April 2007 (together with any adjournment(s) or postponement(s) of such Annual Meeting, the "Meeting"), who will preside at the Meeting, will be designated by a majority vote of Integral's Board of Directors. To the extent that this paragraph 1 is inconsistent with Section 7 of Article II of the Amended and Restated By-Laws of Integral, as amended and currently in effect (the "Bylaws"), such Section of the Bylaws shall be amended to the extent necessary to be consistent with this paragraph 1. 2. The Chairman will be impartial in the conduct of the Meeting, maintain the orderly conduct of the Meeting, and adhere to this Agreement Governing Conduct of Meeting. 3. Each of Fursa, Harley, Chartwell and Integral will conduct themselves in a professional manner and in accordance with this Agreement. 4. Each of Elaine M. Brown and Albert Alderete, or such other person(s) as may be designated by a majority vote of Integral's Board of Directors, will be appointed by Integral's Board of Directors, with full power of substitution and resubstitution in each of them, to serve as proxies on behalf of the stockholders of the Company in connection with the Meeting. 5. The only matters to be voted on by the stockholders of the Company at the Meeting, and the only business to be considered at the Meeting, shall be as follows: (1) the election of eight (8) directors and (2) consideration of any stockholder proposal previously made in accordance with the advance notice procedures set forth in the By-Laws and not withdrawn prior to the Meeting. Any other business shall be deemed to have not been properly brought before the Meeting and shall not be transacted. 6. The Chairman will not accept or consider any motions, nominations or proposals from the floor. 7. The agenda for the meeting shall be as follows: A. Meeting called to order B. Welcoming remarks C. Procedural matters, including proof of due notice of Meeting, determination of quorum and examination of proxies, reading and disposing of minutes of last meeting of stockholders; and announcement of purposes for which the meeting was called D. Election of Directors (as set forth in paragraph 5 above) E. Consideration of Stockholder Proposal (as set forth in paragraph 5 above) i F. Question and Answer Period G. Adjournment H. Report of Officers to Stockholders 8. During the Question and Answer Period specified in the Agenda set forth in paragraph 7 above, any stockholder or proxy holder may ask appropriate questions from the floor and receive appropriate answers, which questions shall not be more than three (3) minutes. All questions shall be directed to the Chairman who shall answer them or, if the Chairman shall determine, refer them to the appropriate person or persons for response. The questioners shall be asked to identify themselves by name and to state on whose behalf they are speaking, if other than themselves. ii EX-99 3 integral_exb.txt EXHIBIT B FOR IMMEDIATE RELEASE CONTACT: Tory Harris Investor Relations Integral Systems Tel: 301-731-4233 x1109 Email: info@integ.com Web: www.integ.com INTEGRAL SYSTEMS ANNOUNCES AGREEMENT TO DE-CLASSIFY THE BOARD OF DIRECTORS Lanham, MD, February 6, 2007 - Integral Systems, Inc. (the "Company") (NASDAQ-ISYS) today announced its agreement, after consultations with various Company stockholders, to de-classify its board of directors. After this change is effected, the Board will consist of a single class of directors in which all directors will stand for election every year. The Company also announced that it intends to add Mickey Harley, as a representative of Fursa Alternative Strategies LLC, the largest stockholder of the Company, to its Board of Directors at the next regular Board meeting, which is scheduled for February 7, 2007. "I believe that the Company's decision to de-classify the Board of Directors at this time is in the best interests of the Company and its stockholders," stated Pete Gaffney, Chief Executive Officer of the Company. "These actions demonstrate the Company's commitment to strong, stockholder-focused, contemporary corporate governance practices which I believe are consistent with the Company's goal of maximizing stockholder value. Since the annual stockholder meeting in April, 2006, the Board has been reconfigured significantly to address stockholder requests. Messrs Harley, Leimkuhler, Baldwin (all stockholder recommendations), Albertine, and Casner have been added providing greater depth and independence to the previously elected Board. The resulting Board composition is well constituted to evaluate and guide the Company in directions to maximize stockholder value" added Mr. Gaffney. "I am pleased that the Company is listening to its shareholders, and believe that these recent actions will facilitate steps toward realizing the maximum potential for the Company," Mickey Harley stated. "I look forward to working with my fellow directors to explore strategic alternatives for the Company," he added. In connection with the Company's decision to de-classify the Board, Fursa Alternative Strategies LLC and Chartwell Capital Investors II, L.P., another large stockholder of the Company, has agreed not to initiate or pursue a change in the Board before 2008. In light of the actions being taken by the Company, Chartwell agreed to withdraw its stockholder proposal. -more- ABOUT INTEGRAL SYSTEMS Founded in 1982, Integral Systems, Inc. is a leading provider of satellite systems and has supported over 205 different satellite missions for communications, science, meteorological and earth resource applications. The Company was the first to offer an integrated suite of COTS (Commercial-Off-The-Shelf) software products for satellite command & control, the EPOCH IPS product line. EPOCH has become a world market leader in commercial applications with successful installations on 5 continents. The Company's subsidiary Real Time Logic, Inc. builds telemetry processing systems for military applications including tracking stations, control centers, satellite manufacturers and range operations. The Company's subsidiary Lumistar, Inc. is a provider of system-level and board-level telemetry acquisition products. The Company also provides software for equipment monitoring and control to satellite operators and telecommunications firms through its subsidiary Newpoint Technologies, Inc. Through its subsidiary SAT Corporation, the Company provides satellite and terrestrial communications signal monitoring systems to satellite operators and users throughout the world. Integral Systems has approximately 430 employees working at Company headquarters in Lanham, Maryland, and at other locations in the U.S. and Europe. For more information, visit http: //www.integ.com. Except for statements of historical facts, this news release contains forward-looking statements about the Company, all of which are based on the Company's current expectations. The forward-looking statements contained in this news release are subject to additional risks and uncertainties, including the Company's reliance on contracts and subcontracts funded by the U.S. government, intense competition in the ground systems industry, the competitive bidding process to which the Company's government and commercial contracts are subject, the Company's dependence on the satellite industry for most of its revenues, rapid technological changes in the satellite industry, the Company's acquisition strategy and those other risks noted in the Company's SEC filings. The Company assumes no obligation to update or revise any forward-looking statements appearing in this news release. ### -----END PRIVACY-ENHANCED MESSAGE-----