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 November 7, 2014 SYMBOL COMPANY INVESTOR AGN Allergan Inc. Pershing Square/Valeant AHT Ashford Hospitality Trust UNITE HERE BCOV Brightcove, Inc. Tenzing Global Management FLL Full House Resorts, Inc Concerned Stockholders of FLL GBCS Global Healthcare REIT Doucet Asset Management HTZ Hertz Global Holdings Jana Partners IEC IEC Electronics Corp Vintage Capital MLVF Malvern Bancorp PL Capital OPLK Oplink Communications, Inc. Engaged Capital/Voce Capital SFLY Shutterfly, Inc. Marathon Partners XWES World Energy Solutions Ardsley Partners; Maguire Asset Management (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 12

3 Allergan Inc. (AGN) Activist Investor: Pershing Square; Valeant Pharmaceuticals Shares % Outstanding 28,878, % Not Avail Catalyst: On November 3 it was reported that AGN has been approached by Actavis Plc as a possible white knight. On November 6 Pershing sent a letter to the board calling for a competitive bidding process now that there are at least two interested buyers. Share Price B 58B 56B Net Cash 1.8B 2.3B 52 wk. range EV/ 24.2 We initially covered AGN on April 21 when Pershing Square announced it was teaming up with Valeant to purchase Allergan, offering $46B ($48.30 cash and 0.83 Valeant shares). On May 19 Pershing Square issued an open letter concerning AGN s governance failures, including the CEO s conflict of interest in supporting a merger with Valeant since he will likely lose his job as a result. On May 13 Pershing Square called for a shareholder referendum on the merger proposal, requesting the company call a non-binding vote to hear what shareholders think about the deal. On June 2 Pershing Square called for a special meeting of AGN shareholders in an effort to change six directors. On May 27 Pershing Square/Valeant submitted a revised proposal to acquire AGN for 0.83 Valeant shares and $58.30 in cash per share (up from $48.30/share in cash). On May 30 Pershing Square/Valeant increased its offer for AGN a second time to $72/share in cash and 0.83 Valeant shares for a total consideration of $179.25/share based on Valeant s closing price of May 29. Pershing filed a lawsuit in Delaware seeking confirmation that Allergan's poison pill will not be triggered by efforts to call a special meeting. The lawsuit was settled, confirming that the solicitation of proxies to call a special meeting does not trigger the company's poison pill. On July 7 Pershing Square announced a slate of 6 nominees for election to the board at a special meeting. On July 17 Pershing Square hosted a webcast to discuss Allergan (info about this can be found at the website and issued a presentation it gave to ISS relating to its call for a special meeting to replace directors with those who will engage with Valeant on its acquisition offer. On July 30 Pershing Square sent a letter to ISS highlighting the Company's newly added onerous terms for calling a special meeting. On August 1 Allergan commenced a federal securities action against Pershing Square and Valeant, claiming insider trading violations when Valeant "tipped" Pershing to its intended offer for AGN. Pershing responded saying the claims are baseless. On August 6 ISS and Glass Lewis recommended shareholders support Pershing's call for a special meeting. On August 22 Pershing/Valeant delivered a request from 31% of shareholders to call a special meeting. Allergan issued a press release announcing that it has received written requests from more than 25% of shareholders to call a special meeting. The special meeting is now scheduled for Dec 18. On 9/9 Pershing sent a letter to the board to stop wasting corporate assets and engage with Valeant. On September 12 Pershing Square submitted additional special meeting requests representing 35% of AGN Pershing, Valeant and Allergan settled the litigation to hold a special meeting on December 18 Pershing Square is threatening to sue AGN if they go through with a deal to acquire Salix Pharma (SLXP) without a shareholder vote (which isn't required if AGN acquires SLXP with cash) On Oct. 7 we reported that Pershing Square and Valeant were planning to raise their bid to $191/share On Oct. 28 Valeant sent a letter to AGN saying it is prepared to increase its offer to at least $200 per share Page 3 of 12

4 Ashford Hospitality Trust (AHT) Activist Investor: UNITE HERE Shares % Outstanding Not Avail Not Avail Catalyst: On November 3 UNITE HERE published a website Not Avail AHT sent a letter to shareholders regarding UNITE's request for a special meeting Share Price M 1.0B 2.7B Net Cash -1.7B 190M 52 wk. range EV/ On November 5 ISS supported the call for a special meeting. On November 7 Glass Lewis recommended shareholders not consent to call for a special meeting We initially covered AHT on October 9 when UNITE HERE (a labor union representing represents workers at Ashford's Sheraton Anchorage location) requested a record date to solicit a special meeting of shareholders On October 16 UNITE HERE issued a press release asking several questions relating the AHT's spinoff of Ashford, Inc. Proxy Solicitor to Ashford Hospitality Trust Brightcove, Inc. (BCOV) Activist Investor: Tenzing Global Management Shares % Outstanding 1,675, % 8.11 Catalyst: Tenzing disclosed a 5.2% "active" stake in BCOV Tenzing is a new 13D/Activist filer. Share Price M 215M 195M Net Cash 20M -2M 52 wk. range EV/ Negative About Tenzing Global: Chet Kapoor is the co-founder and CIO at Tenzing Global Investors LLC. Previously, he served as a Partner and Head of the Equity Long/Short Group at Perry Capital. Prior to business school at Rice University, Chet worked as an Associate at Blum Capital and as a Financial Analyst in investment banking at CS First Boston. Continue to Next Page Page 4 of 12

5 Full House Resorts (FLL) Activist Investor: Brad Tirpak & Craig Thomas (SAVE Partners); Dan Lee (together, The Concerned Stockholders ) Shares 1,161,432 Catalyst: % Outstanding 6.2% On November 4 The Concerned Stockholders issued a letter addressing several misleading claims made by FLL Share Price M 24M 78M Net Cash -54M 11M 52 wk. range EV/ 6.8 We initially covered FLL on October 8 when the Concerned Stockholders issued a press release stating their intention to call a special meeting to expand the board to 10 and add 5 new directors. On Oct. 13 FLL commented stating it intends to continue to evaluate strategic alternatives (as it has been doing for several months). On October 20 the Paulson Living Trust (9%) issued a press release supporting the call to convene a special meeting On October 22 The Concerned Stockholders issued a statement on the Company's announcement to initiate a sale process, welcoming the development. On October 24 The Concerned Stockholders issued a press release commenting on the Company s decision to amend its bylaws to reduce the right to call a special meeting On October 28 The Concerned Stockholders filed its definitive solicitation statement to obtain 40% shareholder support to call a special meeting. Legal counsel to Tirpak, Thomas, Lee Global Healthcare REIT (GBCS) Activist Investor: Doucet Asset Management Shares 3,230,842 Catalyst: % Outstanding 16.38% On November 4 Doucet changed its filing status from "passive" to "active" and sent a letter to the board 1.25 introducing a potential board candidate with extensive sale-leaseback experience with senior living and senior care facilities. Share Price M 20M 36M Net Cash -16M 0.2M 52 wk. range EV/ Page 5 of 12

6 Hertz Global Holdings (HTZ) Activist Investor: Jana Partners Shares % Outstanding 32,046, % Not Avail Catalyst: On November 6 Jana sent a letter to the board outlining what the next CEO must be able to address, and why Dollar Thrifty's former CEO is more than capable. Share Price B 9B 25B Net Cash -16B 2B 52 wk. range EV/ 13.6 We initially covered Hertz on December 31, 2013 when the Company adopted a poison pill citing "unusual and substantial activity in the Company's shares", particularly with respect to its options trading. At that time, Icahn, Corvex and Third Point were all rumored to be buying HTZ shares/options On August 20, 2014 Icahn disclosed an 8.5% "active" stake and announced he may seek board representation On September 11, Hertz reached an agreement with Icahn to add 3 new directors to a 9-person board and amend the poison pill On October 17 Jana disclosed a 7% stake in HTZ and said it may discuss with management capital allocation, strategy and future plans. Jana owns 20,667,893 shares (approx. 4.6% shares outstanding) + 11,378,815 options. Legal counsel to Jana Partners IEC Electronics Corp (IEC) Activist Investor: Vintage Capital Shares 710,960 Catalyst: % Outstanding 7.1% On November 7 Vintage sent a letter to IEC's CEO declining his request to interview Vintage's Director 3.80 nominees Share Price M 61M 86M Net Cash -34M 8M 52 wk. range EV/ 10.8 We initially covered IEC on February 13, 2014 when Vintage disclosed a 5.6% "active" stake. On May 28 Vintage increased its "active" ownership from 5.6% to 6.3% On August 14 Vintage increased its "active" ownership from 6.3% to 7.1% and sent a letter to the Board demanding they rescind the NOL Poison Pill immediately and refresh the board membership. A copy of Vintage Capital s letter is available here: On October 27 Vintage nominated 7 individuals for election to the board of IEC Continue to Next Page Page 6 of 12

7 Malvern Bancorp (MLVF) Activist Investor: PL Capital Shares % Outstanding 637, % 9.48 Catalyst: PL sent a letter to the board supporting the new CEO as a "very positive development" and suggested several ways to improve the business. Share Price M 71M 77M Net Cash -6M N/A 52 wk. range EV/ N/A We initially covered MLVF in our April Catalyst Research Report, highlighting Joseph Stilwell s (9.8% shareholder) belief that MLVF s shares were undervalued. On August 31, 2010 Stillwell announced he was mailing a letter to shareholders expressing his continued dissatisfaction with the company and its directors. On January 17, 2012 Stilwell announced he was dropping a lawsuit against MLVF because the Company announced plans to do a second step conversion. On October 22, 2012 PL Capital disclosed a 7.2% active ownership stake in MLVFD and highlighted several concerns they have with the company. On November 16 we reported that PL Capital had increased its active ownership from 7.2% to 8.3%.On March 15, 2013 we reported PL Capital had increased its active ownership from 8.3% to 9.8% ($9.47 cost basis). On June 4 Stilwell announced plans to seek board representation and push for dividends and share buybacks. On September 11 we reported that Stilwell nominated 1 person for election to the MLVF board. On October 15, 2013 MLVF entered into a settlement agreement with Joseph Stilwell. Under the terms of the Agreement one Stilwell representative was added to the board and the Company agrees to examine alternatives if the ROE falls below the ROE of the average thrift bank. On May 14 PL Capital sent a letter to the board suggesting the best way to fix all of the company's problems is to find a strategic partner to combine with. On August 8 PL Capital sent a letter to the board commenting on the Company s Q3 results, stating the "earnings release reinforces our view that Malvern is not a viable independent company, as it will never earn the types of returns necessary to justify independence". Continue to Next Page Page 7 of 12

8 Oplink Inc. (OPLK) Activist Investor: Engaged Capital; Voce Capital (Oplink Shareholders for Change; OSC) Shares % Outstanding 1,155, % Catalyst: Engaged/Voce sent a letter to shareholders criticizing the board for not holding its annual meeting and says it will pursue all legal remedies available. Share Price M 353M 231M Net Cash 123M 9M 52 wk. range EV/ 27.1 We initially covered OPLK on July 14 when Engaged/Voce disclosed a 6.2% group ownership and announced they are discussing (a) strategic alternatives for the Oplink Connected business, including a separation or a sale, (b) halting the earnings dilution from the Oplink Connected business (OPLK estimates spending on Oplink Connected will reduce the non-gaap earnings per share by approximately $0.40 in Fiscal 2014), (c) improving the capital allocation discipline given the $161 million of cash and equivalents on the balance sheet (representing approximately 52% of the current market capitalization as of July 11, 2014); and (d) enhancing the corporate governance. On July 29 OPLK issued a press release announcing it is evaluating strategic alternatives for Oplink Connected, authorizing a $40M increase in its buyback program, initiating a $0.05 quarterly dividend and the retention of the National Association of Corporate Directors (NACD) to identify 2 new Directors to an expanded board. On July 31 Engaged Capital and Voce Capital formed Oplink Shareholders for Change (OSC) and nominated 2 to the board, stating that the company's recently announced initiatives appear to be a thinly veiled attempt to placate shareholders. A copy of OSC s July 31 press release is available here: Engaged/Voce issued a press release calling on the board to refrain from setting a new strategic course until the board is reconstituted. A copy of the press release is available here: Engaged/Voce filed its preliminary proxy statement seeking to elect 2 directors and released a Sept. 8 letter expressing its openness to negotiating a solution for shareholder representation. Legal counsel to Engaged Capital Legal counsel to Voce Capital Continue to Next Page Page 8 of 12

9 Shutterfly Inc. (SFLY) Activist Investor: Marathon Partners Shares 2,030,000 Catalyst: % Outstanding 5.27% Marathon announced it had sent SFLY a letter recommending new strategies to enhance shareholder value in Not Avail light of the Board's decision to remain independent Share Price M 1.6B 1.6B Net Cash -6M 73M 52 wk. range EV/ 22.1 On July 2 SFLY announced it had hired an investment bank to examine a sale. On July 18 Marathon disclosed a 5.07% "active" stake in SFLY. Marathon sent a letter to SFLY stating that they would be willing to support the sale of SFLY, but only at a price that fairly compensates the shareholders for the upside they would forgo. They also indicated that the first quarter 2014 share repurchases at approximately $52 were viewed or should have been viewed by fiduciaries as having been made at well below fair value. This implies that the Board believes the current fair value of the common shares is significantly above $52 per share. World Energy Solutions (XWES) Activist Investor: Ardsley Partners; Maguire Asset Management Shares 1,247,860 Catalyst: % Outstanding 9.9% XWES announced a sale to EnerNOC (ENOC) for $5.50/share Share Price M 68M 75M Net Cash -8M 3M 52 wk. range EV/ 21.9 We initially covered XWES on January 9, 2014 when Ardsley (7.5% shareholder at an average cost of $3.74/sh) sent a letter to the Chairman highlighting several initiatives to improve value. In the letter Ardsley stated that the Company would benefit from new directors. A copy of Ardsley s January 9 letter is available here: On March 11 World Energy entered into a settlement agreement with Ardsley agreeing to expand the board by two, adding two new directors recommended by Ardsley and one new independent director. On April 28 Maguire Asset Management disclosed an 8.5% "active" stake in XWES On May 27 Maguire increased its "active" ownership stake from 8.5% to 9.9% Strategy & Communications to Ardsley Partners Legal counsel to Ardsley Partners; Legal counsel to Maguire Asset Management Page 9 of 12

10 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 10 of 12

11 PLATINUM SPONSORS Broker-Dealer APB Financial Group is a Special Situations Brokerage Firm tailored to investors seeking fundamental value and catalyst-driven activist investments. Contact: Steven Abernathy, Principal sabernathy@abbygroup.com Tel: PLATINUM SPONSORS Legal Advisers Olshan Frome 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. Contact: 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 375 lawyers in offices in New York, Washington, D.C., and London, has a long history of serving private equity and hedge fund clients. Contact: Marc Weingarten, Partner marc.weingarten@srz.com Tel: David Rosewater, Partner david.rosewater@srz.com Tel: Page 11 of 12

12 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. Contact: Peter Casey, Executive Vice President pcasey@allianceadvisorsllc.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. Contact: 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. Contact: Mark Harnett, President mharnett@mackenziepartners.com Tel: Page 12 of 12