CATALYST EQUITY RESEARCH REPORT Weekly Research Highlighting Activist Investments

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1 Weekly Research Highlighting Activist Investments Subscribe to receive this FREE Report ed weekly.

2 HIGHLIGHTING ACTIVIST INVESTMENTS Week Ending December 2, 2011 SYMBOL COMPANY INVESTOR ABVT AboveNet Inc. Corvex Management ADGF Adams Golf Inc. Nantahala Capital Management CLSN Celsion Corp Mangrove Partners CMC Commercial Metals Company Carl Icahn CP Canadian Pacific Railway Pershing Square CTO Consolidated Tomoka Land Co Wintergreen Advisers DSCI Derma Sciences Inc. Raging Capital Management GET Gaylord Entertainment Co GAMCO Investors IL IntraLinks Holdings Discovery Group PBIB Porter Bancorp, Inc. Clinton Group PTI Patni Computer Systems Elliott Associates SNSTA Sonesta International Hotels GAMCO Investors WBMD WebMD Health Corp. Carl Icahn (HFS) provides investment research, strategy and stakeholder communications consulting to companies and investors interested in, or involved with, shareholder activist campaigns. Since 2001 HFS has become the trusted advisor to numerous institutional investors, CEOs and board members worldwide. HFS also administers The Official Activist Investing Blog, the definitive source for activist shareholder information. Catalyst Investment Research is a portfolio of activist investing research products that combine company-specific shareholder activism research with deep value investment analysis and access to industry insiders. PORTFOLIO OF ACTIVIST INVESTING RESEARCH INCLUDES: Daily Alerts Weekly Summary of Activist Investments Quarterly Buying Analysis of Top 50 Activist Investors Company-Specific Shareholder Activism Analysis (combining shareholder activism & deep value company analysis) Special Reports on Activist Investing 400+ Page Shareholder Activism Report & Regularly Updated Shareholder Activism Resource Portal To Learn More: Download a brochure Page 2 of 11

3 AboveNet Inc. (ABVT) Activist Investor: Corvex Capital Shares 1,327,005 Catalyst: % Outstanding 5.1% On December 1 Corvex Capital disclosed a 5.1% active ownership stake in ABVT and stated that they have had conversations and meetings with the management and members of the board to discuss their business. Share Price M 1.6B Enterprise Value 1.5B 55M 185M 52 wk. range EV/ 8.2 Corvex Capital is a newly-launched hedge fund managed by ex-icahn officer Keith Meister. This is the first active ownership stake disclosed by Corvex since its launch. Adams Golf Inc. (ADGF) Activist Investor: Nantahala Capital Management Shares % Outstanding 476, % 7.01 Catalyst: On November 29 Nantahala Capital disclosed a 6.1% active ownership stake in ADGF. Share Price 5.59 We previously covered ADGF in our November 18 Catalyst Research Report, highlighting SJ Strategic Investments 35% active ownership position and their announcement to (i) nominate up to four directors and (ii) submit a stockholder proposal to declassify the board. 97M 44M Enterprise Value 32M 11M 6M 52 wk. range EV/ 5.2 On November 28 Cleveland Capital issued a press release announcing its support of efforts to change the composition and structure of the Company s board of directors. Cleveland Capital s press release is available here: Change-Adams Celsion Corp. (CLSN) Activist Investor: Mangrove Partners Shares % Outstanding 2,095, % 3.05 Catalyst: On December 1 Mangrove Partners sent a letter to CLSN demanding that they appoint two people from Mangrove to the board, hire an investment bank to explore all strategic alternatives, and set measurable goals for management that carry the potential for termination if they are not met. Share Price M 58M Enterprise Value 37M 21M -22M 52 wk. range EV/ Negative Extracted from Mangrove s December 1 letter to CLSN: Let me start by assuring you that I am both persistent and unable to be corrupted, not even by your CEO who offered to direct Rodman and Renshaw to allocate a portion of the most recent equity raise to us in exchange for signing an agreement which would prevent us from becoming activists and therefore a threat to your management team. Please see the attached agreement and s as evidence of this fact. In my view this was equivalent to a bribe: I would be paid in exchange for going away. Mangrove s December 1 letter is available here: Page 3 of 11

4 Commercial Metals Company (CMC) Activist Investor: Carl Icahn Shares 11,525,000 Catalyst: % Outstanding 9.98% On November 28 Icahn offered to acquire CMC for $15 per share in cash. Not Avail Share Price B 1.6B Enterprise Value 2.8B -1.2B 247M 52 wk. range EV/ 11.3 We previously covered CMC in our July 29 Catalyst Research Report, highlighting Icahn s 9.98% active ownership stake and the announcement that he planned to have conversations with the Company regarding strategic alternatives. On July 31 CMC adopted a poison pill with a 10% trigger. On December 5 CMC rejected Icahn s offer. Proxy Solicitor to Commercial Metals Canadian Pacific Railway Inc. (CP) Activist Investor: Pershing Square Capital Shares 21,057,428 Catalyst: % Outstanding 12.4% On December 1 Pershing Square announced they are engaged in discussions with representatives from CP Not Avail concerning changes to the business and operations, its executive management and its board composition. Share Price B 10.4B Enterprise Value 14.6B -4.2B 1.4B 52 wk. range EV/ 10.6 We previously covered CP in our October 28 Catalyst Research Report, highlighting Pershing Square s 12% active ownership stake. Continue to Next Page Page 4 of 11

5 Consolidated Tomoka Land Co. (CTO) Activist Investor: Wintergreen Advisers Shares % Outstanding 1,543, % Catalyst: On November 25 Wintergreen Advisers notified CTO of its intent to submit shareholder proposals asking shareholders to (i) request the resignation of a current board member and (ii) request that CTO adopt a policy that no individual may be nominated or continue to serve as a director of the company who has materially violated any applicable law or rule in relation to his or her duties at the company. Share Price M 153M Enterprise Value 164M -11M 2M 52 wk. range EV/ 74.9 We previously covered CTO in numerous Catalyst Research Reports (most recently on November 18, 2011), highlighting Carlson Capital 5.1% active ownership stake. Previously, we have tracked Wintergreen s investment going back to On March Wintergreen filed a proxy in order to replace three directors at the annual meeting (2 nominees were elected). On December Wintergreen delivered three shareholder proposals for inclusion in the Company s 2010 proxy materials: (i) nominate one independent candidate for election to the board (nominee was elected), (ii) implement an annual shareholder referendum on executive compensation (proposal was adopted), and (iii) require majority vote for election of all directors in uncontested elections (adopted). On November 23, 2010 Wintergreen nominated one individual for election to the board at CTO s annual meeting on April 27, Wintergreen also submitted a proposal to de-stagger the board so all directors are elected annually. On March 10 Wintergreen delivered a letter to the Board of CTO urging the CEO to resign, stating that his continued involvement with the Company could negatively impact the recruitment of a new CEO. On April 19 Wintergreen issued a press release stating its opposition to the re-election of the Company s outgoing CEO to the board of directors at the April 27, 2011 annual meeting. On November 18 Carlson Capital disclosed a 5.1% active ownership stake at an average cost of $27.68/share. Legal counsel to Carlson Capital Proxy Solicitor to Consolidated Tomoka Continue to Next Page Page 5 of 11

6 Derma Sciences Inc. (DSCI) Activist Investor: Raging Capital Management Shares 1,462,286 Catalyst: % Outstanding 13.5% On November 29 Raging Capital disclosed a 13.5% active ownership stake in DSCI. Not Avail Share Price M 83M Enterprise Value 61M 23M 1M 52 wk. range EV/ 61.3 Gaylord Entertainment Co. (GET) Activist Investor: GAMCO Shares 4,737,436 Catalyst: % Outstanding 9.78% On December 1 GAMCO submitted a shareholder proposal requesting GET remove their poison pill if a Not Avail majority of shareholders vote against it at the annual meeting. Share Price M 1.1B Enterprise Value 2.2B -1B 148M 52 wk. range EV/ 14.7 We previously covered GET in our February 6, 2009 January 30, 2009, January 23, 2009 January 16, 2009 and August 22, 2008 Catalyst Research Reports, highlighting GAMCO s shareholder proposal (submitted on August 12, 2008) to redeem the poison pill installed by the Company without shareholder approval. We also reported on the fact that TRT (currently a 22% shareholder) sent GET a letter demanding to review the Company s list of shareholders for the purpose of communicating with them about replacing four board members at the 2009 annual meeting. On January TRT sent a letter nominating four individuals for election at the next annual meeting. On February GAMCO nominated four individuals for election to the nine member board. On March GET entered into a settlement agreement with GAMCO and TRT. Under the terms of the agreement GET increased the size of the board by four and included two individuals nominated by GAMCO and two individuals nominated by TRT. GET also increase the threshold on the poison pill from 15% to 22%. IntraLinks Holdings (IL) Activist Investor: Discovery Capital Shares 3,168,057 Catalyst: % Outstanding 5.8% On December 2 Discovery disclosed a 5.8% active ownership stake in IL 7.29 Share Price M 281M Enterprise Value 307M -26M 24M 52 wk. range EV/ 12.9 Page 6 of 11

7 Porter Bancorp, Inc. (PBIB) Activist Investor: Clinton Group Shares % Outstanding 1,135, % 5.58 Catalyst: On November 28 Clinton sent a letter to PBIB s Lead Independent Director stating their belief that the Company s Risk Policy and Oversight Committee s conclusions of its investigation (see details below) are incorrect and that the Company continues to obfuscate problem assets on its balance sheet, threaten the safety and soundness of the bank, and operate in a manner contrary to the interests of its public shareholders. Share Price M 26M Enterprise Value -37M 63M N/A 52 wk. range EV/ N/A A copy of Clinton s November 28 letter is available here: We previously covered PBIB in our October 28, August 5 and July 15, 2011 Catalyst Research Reports, highlighting Clinton s July 11 letter expressing their concerns about the executive leadership team and its ability to properly manage the Bank s operations. Clinton suggested the Company take the following steps to increase shareholder value: (i) Replace the bank s CEO, (ii) Augment the board by expanding to eight members and filling the vacancy with a Clinton representative, (iii) Create a special committee (including the Clinton representative) to oversee asset sales, (iv) Raise additional capital, if necessary. A copy of Clinton s July 11 letter is available here: On August 2 Clinton attempted to meet with PBIB management at a scheduled investor conference. According to Clinton, PBIB management refused to meet with them and requested that they leave the conference. On August 5 Clinton sent a letter to the Chairman of PBIB s Risk Policy and Oversight Committee of the Board of Directors, calling on the Committee to study a number of issues at the Bank including: (i) underwriting standards; (ii) due diligence and documentation processes; (iii) appraisal process; (iv) failure to recruit and retain qualified personnel to handle NPAs; (v) the Friends of the Bank policy; (vi) restructuring of loans on favorable terms; (vii) methodology for valuing real estate on the balance sheet; (viii) concentration of construction and development loans; and (ix) the late recognition of real estate trends in Kentucky. The letter also requested that Clinton be permitted to present their concerns to the Committee and that the Committee report to shareholders on its activities regularly. The letter furthermore called on the Board to replace the Chief Executive Officer. A copy of the August 5 letter is available here: On October 24 Clinton sent a letter to the Chairman of PBIB offering to invest up to $25 million at a price equal to the Company s tangible book value per share (at the close of the second quarter PBIB s tangible book value per share was $9.47). Clinton offered to make this investment to ensure the Company complies with its obligations to the Federal Reserve Bank of St. Louis. Legal counsel to Clinton Group Continue to Next Page Page 7 of 11

8 Patni Computer Systems (PTI) Activist Investor: Elliott Associates Shares 12,011,909 Catalyst: % Outstanding 8.9% Elliott has recently increased their active ownership stake in PTI from 4.4% to 8.9% We previously covered PTI in our October 28 Catalyst research Report, highlighting Elliott s 4% active ownership stake. Share Price M 1.2B Enterprise Value 1.1B 42M 113M 52 wk. range EV/ 9.9 Sonesta International Hotels (SNSTA) Activist Investor: GAMCO Investors Shares 1,098,066 Catalyst: % Outstanding 29.69% On December 2 GAMCO announced they have retained a law firm to file an action on behalf of all Not Avail shareholders to obtain fair value for their shares. Share Price M 117M Enterprise Value 138M -20M 6M 52 wk. range EV/ 22.2 We previously covered SNSTA in our October 28, 2011 and November 28, 2008 Catalyst Research Reports highlighting GAMCO s announcement that they planned to nominate two people to the Board at the 2009 annual shareholders meeting. On October GAMCO sent a letter to the board clarifying their policy with regards to a business sale. In the letter GAMCO stated that a fully shopped offer subject to open market visibility and bidding by a third party would generally draw their support. On October 28 SNSTA announced that it is engaged in discussions about a possible sale transaction. On November 3 SNSTA announced an agreement to be acquired by a REIT for $31/share in cash. WebMD Health Corp (WBMD) Activist Investor: Carl Icahn Shares 5,692,274 Catalyst: % Outstanding 9.99% On November 30 Icahn proposed WBMD use their cash to repurchase up to one billion dollars of its Not Avail outstanding shares through a Dutch tender offer with $36 per share as the high-end of the range. Share Price M 2.0B Enterprise Value 1.7B 300M 150M 52 wk. range EV/ 11.4 We previously covered WBMD in our November 4 and November Catalyst Research Reports, highlighting Icahn s increase in ownership to 9.5% and subsequent increase to 9.9%. Page 8 of 11

9 CONTACT INFORMATION: Hedge Fund Solutions, LLC Damien J. Park Tel FREE Subscription to the weekly report: or The Catalyst Equity Research Report is a general circulation weekly. Hedge Fund Solutions and/or its affiliates (the Firm ) may have a consulting relationship with the companies featured in this report (the Companies ). The Firm may also actively trade in the securities of the Companies for its own account. At any time, the Firm, funds it manages and/or its employees or their family members may have a long or short position in registered or non-registered securities or in options on any such security of any company mentioned in this report. The information contained in this report is not a complete analysis of every material fact with respect to the company, industry, or security and is not an offer or solicitation to buy or sell any security. Although opinions and estimates expressed in this report reflect the current judgment of the Firm, the information upon which such opinions and estimates are based is not necessarily updated on a regular basis. In addition, opinions are subject to change without notice. The Firm from time to time may perform consulting services for companies mentioned in this report and may occasionally possess material, nonpublic information regarding such companies. This information is not used in the preparation of this report. Facts and other information contained in this report have been obtained from the public sources considered reliable but are not guaranteed in any way. Hedge Fund Solutions Portfolio of Activist Investing Products Catalyst Investment Research Daily: Alerts Weekly: Catalyst Equity Research Report Quarterly Buying Analysis Top 50 Activist Investors Specific Activist Target Catalyst Investment Research Special Reports Shareholder Activism Report & Resource Portal Download a Brochure Page 9 of 11

10 PLATINUM SPONSORS Legal Advisers Olshan Grundman Frome Rosenzweig & Wolosky LLP is a law firm dedicated to providing personal service tailored to the specific requirements and concerns of the firm s clients. Olshan is widely recognized as a preeminent law firm in the activist strategy area, and represents experienced activist investors, funds new to the activist area, as well as other investment and hedge funds. Olshan has extensive experience advising clients in a wide range of activist strategies, from private negotiations with management to public, high profile proxy contests, including expertly and efficiently handling litigation relating to activist matters. We also specialize in mergers and acquisitions and hostile takeovers, with extensive expertise in these matters. Olshan s highly regarded attorneys provide a full range of legal services and are uniquely positioned to provide expert advice regarding the complicated and nuanced legal issues facing activist investors today. Steve Wolosky, Partner swolosky@olshanlaw.com Tel: Schulte Roth and Zabel LLP, one of the leading law firms in the activist investing area, has been involved in some of the highest-profile campaigns facing the business world in recent years. Serving both activist-only and occasional activists, the firm advises on federal securities law, state corporate law, Hart-Scott-Rodino, proxy rules and related matters, as well as handling investigations and litigations arising out of clients' activist activity. The firm, with over 450 lawyers in offices in New York, Washington, D.C., and London, has a long history of serving private equity and hedge fund clients. Marc Weingarten, Partner marc.weingarten@srz.com Tel: Page 10 of 11

11 PLATINUM SPONSORS Proxy Advisors Alliance Advisors LLC is a multi-faceted shareholder communications firm specializing in proxy solicitation, corporate governance consulting, and information agent services. Our in-depth view of the investor communities and governance environment allows us to prepare for successful outcomes. Alliance Advisors fight team has built a distinguished reputation by successfully completing countless contested assignments. The team will complete a comprehensive analysis of the shareholder base and build a calculated battle plan accordingly. We will assist in the crafting and delivery of your message to the target audience, ensuring the message is heard and understood. Alliance Advisors consistently delivers successful outcomes to our clients. Peter Casey, Executive Vice President pcasey@allianceadvisorsllc.com Tel: Georgeson Inc. is the world s leading provider of strategic proxy and corporate governance advisory services to corporations and shareholder groups working to influence corporate strategy. For over half a century, Georgeson has specialized in complex solicitations such as hostile and friendly acquisitions, proxy contests and takeover defenses. For eight consecutive years, Georgeson has been ranked the No. 1 proxy solicitor for M&A transactions in the US. Georgeson s experts include former corporate secretaries who have worked toward successful outcomes with activist investors, former directors of US research at RiskMetrics, M&A attorneys, and the most experienced proxy solicitation team in the industry. Rachel Posner, Senior Managing Director and General Counsel rposner@georgeson.com Tel: Innisfree M&A Incorporated is a full service proxy solicitation/investor relations firm providing clients with sound tactical and strategic advice and results-oriented implementation in proxy and consent solicitations (whether friendly or contested), tender and exchange offers, mergers, rights offerings, strategic restructurings and other domestic and cross-border transactions requiring action by public security-holders. We provide expert consulting services on a wide range of matters, including executive compensation proposals, corporate governance issues and investor relations. Innisfree s reputation derives from our success in complex and/or contested situations. Key to that success is our ability to track, identify and understand the shifting dynamics of a company s security-holder base and provide battle-tested advice based on that information. We are convinced, and our unrivaled record demonstrates, that this refined, analytical based approach enables us to deliver the extraordinary results our clients expect. Arthur Crozier, Co-Chairman acrozier@innisfreema.com Tel: MacKenzie Partners, Inc. is a full-service proxy solicitation, investor relations and corporate governance consulting firm specializing in mergers-and-acquisitions related transactions. The firm has offices in New York City, Los Angeles, Palo Alto and London. MacKenzie's services include corporate governance consulting, security holder solicitations, information agent services for tender and exchange offers, beneficial ownership identification, market surveillance and associated financial, investor and media relations services. We work in close partnership with our client's attorneys, investment bankers and other consultants, providing advice and counsel at each stage of the transaction. Mark Harnett, President mharnett@mackenziepartners.com Tel: Page 11 of 11