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 July 16, 2010 SYMBOL COMPANY INVESTOR BNHN Benihana, Inc. Benihana of Tokyo, Inc. BNHNA Benihana, Inc. Coliseum Capital Management CASA Mexican Restaurants Inc. Cross River Capital Management CRL Charles River Laboratories Intl. Jana Partners DTG Dollar Thrifty Automotive PAR Investment Partners ELMG EMS Technologies Inc. MMI Investments EZEN.OB Ezenia! Inc. North & Webster NAVI NaviSite, Inc. Atlantic Investors PLFE Presidential Life Corp Herbert Kurz RMX RMX Holdings, Inc. Insight Equity Holdings RRGB Red Robin Gourmet Burgers Clinton Group; Spotlight Capital RRGB Red Robin Gourmet Burgers Biglari Holdings TPGI Thomas Properties Group Lyle Weisman VITC Vitacost.com, Inc. Great Hill Investors LLC HEDGE FUND SOLUTIONS (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. HEDGE FUND SOLUTIONS 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 Benihana Inc. (BNHN) Activist Investor: Benihana of Tokyo Inc. Shares 2,153,744 % Outstanding 38.1% Share Price (B) M 98M Enterprise Value 117M Net Cash -20M 25M 52 wk. range EV/ 4.6 On July 16 Benihana of Tokyo [owners of 38.1% series B convertible preferred stock a 2:1 Class A convertible preference] nominated two individuals to the board of Benihana at the Sept. 12 annual meeting. We previously covered BNHN in our May 28 Catalyst Research Report, highlighting Coliseum Capital s (12.9% Class A shareholder) February 17 letter to Benihana s CEO outlining their opposition to the Company s announcement that they were seeking shareholder approval to issue 12.5M additional Class A common shares. On May 25 Coliseum Capital met with a board member at BNHN to discuss the possibility of the appointment or nomination of individuals designated by Coliseum to the board. Legal counsel to Benihana of Tokyo on this investment For more information about Olshan see the Firm s description and Benihana Inc. (BNHNA) Activist Investor: Coliseum Capital Management Shares 1,263,883 % Outstanding 12.9% Share Price (A) M 98M Enterprise Value 117M Net Cash -20M 25M 52 wk. range EV/ 4.6 On July 15 Coliseum Capital (12.9% Class A shareholder) sent a letter to the President and CEO of Benihana stating their intention to formally nominate individuals to the board for election at the next annual meeting. On July 13 Benihana announced they have retained a qualified financial advisor to formally review strategic alternatives, including a possible sale. In the press release, the Company s CEO suggested a divergent view of shareholders as the primary reason for the review. In their letter to Benihana, Coliseum stated that the Company is massively undervalued and that it has substantial opportunities to improve its business and increase shareholder value whether or not a sale is pursued. See additional comments above Mexican Restaurants Inc. (CASA) Activist Investor: Cross River Capital Management Shares 344,532 % Outstanding 10.09% Share Price M 7M Enterprise Value 11M Net Cash -4M 3M 52 wk. range EV/ 4.30 On July 14 Cross River changed their filing status from passive investor to active investor and disclosed they plan to have substantive conversations with other minority shareholders and CASA s special committee of the board regarding the company s recent decision to explore a delisting process for the purpose of saving costs. Approximately 65% of CASA shares are held by insiders. Page 3 of 12

4 Charles River Laboratories International (CRL) Activist Investor: Jana Partners Shares 4,780,695 % Outstanding 7.2% Share Price B 2.2B Enterprise Value 2.5B Net Cash -240M 272M 52 wk. range EV/ 9.2 On July 16 Jana sent another letter to the Chairman & CEO of CRL reiterating their belief that the proposed acquisition of WuXi PharmaTech is the wrong choice for shareholders. In the letter Jana highlights analyst skepticism about the synergies between the two companies. They also stated that the Return on Capital is inadequate even under the most optimistic scenarios. Finally, Jana suggests that a share repurchase or a sale of the business would create substantial value immediately without integration risk. We previously covered CRL in our July 9, June 18 and June 11 Catalyst Research Reports, highlighting Jana s opposition to the Company s April 26 announcement to purchase WuXi PharmaTech, a Chinese pharmaceutical outsourcing company, for $1.6B. On June 3 Jana met with the Chairman, President & CEO of CRL and the Chairman & CEO of WuXi to discuss the transaction. On June 7, Jana sent a letter to CRL expressing their concern about the combined businesses and, as a result, announced their plans to vote against the transaction. In an earlier letter, Jana noted that CRL could employ the same multiple of leverage to trailing it would assume in a WuXi acquisition to repurchase approximately 19% of its currently undervalued outstanding shares at a 10% premium to the current Charles River share price, without any integration risk. We believe that a share repurchase of this magnitude would result in accretion to 2011 earnings per share of approximately 14%, and growing thereafter. On June 16 Jana sent another letter to CRL. In this letter Jana highlighted than an analyst from Jeffries says approximately 35% of the current shareholder are opposed to CRL s acquisition of WuXi Pharma. Furthermore, Jana suggested that if the company redesigned the acquisition to avoid a shareholder approval vote they would attempt to replace the board at next year s annual meeting. On June 16 Neuberger Berman (6.26% shareholder) changed their filing statues from passive investor to active investor and sent a letter to CRL s board stating that the proposed transaction with WuXi is not in the best interest of shareholders based on the elevated financial and operational risks it will bring to the company. On July 8 Jana sent CRL a DE220 Demand Letter requesting to review the company s shareholder list. Legal counsel to Jana Partners on this investment For more information about SRZ see the Firm s description and contact information at the end of this report. Proxy Solicitor to CRL on this transaction For more information about Innisfree see the Firm s description and Dollar Thrifty Automotive (DTG) Activist Investor: PAR Investment Partners Shares 2,191,800 % Outstanding 7.65% Share Price B 1.3B Enterprise Value 2.6B Net Cash -1.2B 213M 52 wk. range EV/ 12.0 PAR has increased their investment in DTG from 6.2% to 7.65% since early May. We previously covered DTG in our May 7 Catalyst Research Report, highlighting PAR s April 28 press release stating, In light of the strong earnings results and prospective guidance released by Dollar Thrifty this morning, we believe that Hertz's acquisition proposal, which currently values the Company at around $42 per share, is woefully inadequate Based on our assessment of Hertz's current offer, if a shareholder vote were held today, PAR would vote against the acquisition proposal. On July 12 The WSJ reported Avis Budget Car is preparing a higher bid. As a result, the merger vote has been rescheduled to September 16 with an August 12 record date. Page 4 of 12

5 EMS Technologies Inc. (ELMG) Activist Investor: MMI Investments Shares 950,000 % Outstanding 6.2% Share Price M 238M Enterprise Value 211M Net Cash 26M 37M 52 wk. range EV/ 5.7 On July 16 MMI filed a 6.2% active ownership position with ELMG. Legal counsel to MMI on this investment For more information about Olshan see the Firm s description and Ezenia! Inc. (EZEN.OB) Activist Investor: North & Webster LLC Shares 748,157 % Outstanding 5.1% 0.09 Share Price M 1M Enterprise Value 0 Net Cash 4M -3M 52 wk. range EV/ N/A On June 30 Ezenia! entered into a settlement agreement with North & Webster (NW). Under the terms of the agreement NW will have the right to appoint one individual to the board in January 2011 in the event that the Company does not meet the revenue and the operating income targets in its operating budget for fiscal NW must also continue to own 500,000 shares. target is $4,736,774 and OI target is $(708,006). We previously covered EZEN in our December 4, 2009 Catalyst Research Report, highlighting NW December letter to the board on November 16 urging them to (i) immediately appoint two independent representatives committed to taking actions that are in the best interests of all shareholders, (ii) rescind the shareholder rights plan, and (iii) begin an immediate process of enhancing shareholder value. Legal counsel to North & Webster on this investment For more information about Olshan see the Firm s description and NaviSite Inc. (NAVI) Activist Investor: Atlantic Investors Shares 13,841,028 % Outstanding 36.7% On July 12 Atlantic sent a letter to NAVI offering to acquire the company for $3.05 in cash. The deal is subject to a financing contingency. Share Price M 105M Enterprise Value 156M Net Cash -51M 31M 52 wk. range EV/ 5.0 Page 5 of 12

6 Presidential Life Corp. (PLFE) Activist Investor: Herbert Kurz Shares 2,432,284 % Outstanding 8.2% Share Price M 265M Enterprise Value 31M Net Cash 230M 18M 52 wk. range EV/ 1.7 Kurz has nominated eight people to the board of PLFE for election at the August 18, 2010 annual meeting. We previously covered PLFE in our February 19, January and November Catalyst Research Reports, highlighting that on November 6, 2009 Herbert Kurz filed a consent solicitation for the purpose of (i) removing the current board members other than himself, (ii) fix the size of the board at nine members, and (iii) elect eight new members to the Board. On January 8 Kurz issued a press release in which he stated that if his nominees are elected, they intend to explore strategic alternatives in an effort to maximize value. Despite obtaining 44% of the outstanding shares, Kurz did not receive enough consents to remove the current directors. PLFE has approximately $7.78/share in net cash and is currently trading around $8.86. Note: An additional 5,364,371 shares, equivalent to 18% of PLFE shares outstanding, are held Mr. Kurz s family charitable foundation. Proxy Solicitor to PLFE For more information about Innisfree see the Firm s description and RMX Holdings, Inc. (RMX) Activist Investor: Insight Equity Holdings Shares 2,645,212 % Outstanding 69.4% Share Price M 7M Enterprise Value 11M Net Cash -5M -8M 52 wk. range EV/ Negative On July 9, 2010 Insight Equity sent another letter to RMX urging the board to declare a special cash dividend of $5,000,000. We previously covered RMX in our May 14 Catalyst Research Report, highlighting Insight Equity s letter to the board encouraging them to (i) promptly declare a special cash distribution in the amount of $5,000,000 and (ii) undertake immediate action to conduct a 1 for 2,645,212 reverse stock split. If successful, completion of the transaction would (i) cause Insight to become the sole stockholder, (ii) cause the delisting of the stock from the NYSE Amex and (iii) cause the stock to become eligible for termination of registration. Insight encouraged the Board to form a special committee to determine what is in the best interests of all of the stockholders and stated that is was ready to work with the special committee to complete the transaction quickly and cost effectively. On June 30 RMX formed a special committee of the board to review Insight s demands. - Continue to Next Page - Page 6 of 12

7 Red Robin Gourmet Burgers (RRGB) Activist Investor: Clinton Group; Spotlight Advisors Shares 1,114,227 % Outstanding 7.14% Share Price M 317M Enterprise Value 477M Net Cash -157M 81M 52 wk. range EV/ 5.9 Clnton and Spotlight continue to increase their ownership in RRGB. They now own 7.14%. We previously covered RRGB in our June 25, June 11, March 5, February 19, January 15, 2010; and December 25, 2009 Catalyst Research Reports, highlighting Clinton and Spotlight s December 21 group filing with the SEC for the purpose of communicating with each other about their investment in RRGB. On March 4 the parties entered into a settlement agreement, which included the following: RRGB will add three new directors with deep industry experience and commit to add at least one more board member with industry experience; Two directors will retire; The board will form a committee to search for a new CEO; The board will adopt a majority voting standard for election of directors; and the company will change its stock plan to prohibit re-pricing and cash tenders without shareholder approval. On June 23 Clinton and Spotlight spoke with two directors from RRGB (including the newly appointed chairwoman) about (i) the substantial upside in the stock, (ii) the role and responsibility of the board in the event the company receives a buyout offer, and (iii) the importance of rapidly concluding the various initiatives outlined in their settlement agreement (as far as we can tell, two issues remain outstanding: 1. the appointment of a new CEO and 2. the appointment of an additional independent director). Legal counsel to Clinton/Spotlight on this investment For more information about SRZ see the Firm s description and contact information at the end of this report. Red Robin Gourmet Burgers (RRGB) Activist Investor: Biglari Holdings Shares 941,189 % Outstanding 6.0% On July 1 Biglari Holdings disclosed a 6.0% ownership position in RRGB. Biglari Holdings controls the Western Sizzlin and the Steak n Shake restaurant chains. Share Price M 317M Enterprise Value 477M Net Cash -157M 81M 52 wk. range EV/ 5.9 See additional comments above Legal counsel to Bilgari on this investment For more information about Olshan see the Firm s description and Page 7 of 12

8 Thomas Properties Group (TPGI) Activist Investor: Lyle Weisman Shares 3,049,458 % Outstanding 8.65% Share Price M 111M Enterprise Value 391M Net Cash -281M 7M 52 wk. range EV/ 58.5 On July 8 Lyle Weisman sent a letter to TPGI s board asking to meet in order to discuss and evaluate ways in which the Company s stock price may more accurately reflect the underlying value of the Company and how fair value to shareholders may be enhanced from current dismal levels. Such proposals would include a strategic review of the Company s individual properties to determine whether or not individual properties should continue to be part of the Company s portfolio and ways to maximize the Company s property management efficiency and a presentation relating to taking the Company private, at a significant premium to the current stock price. The Weisman Group's letter noted in summary that: it is our preferred approach to structure and present a going-private transaction with Jim Thomas and other senior members of the Company s management at a fair price that allows the Company to unlock the superb long-term potential of the enterprise while at the same time providing fuller current value to the Company s shareholders. Should that preference prove not to be an available course of action, we nevertheless are prepared to move forward with the transaction on our own, possibly with one or more additional investment partners. Vitacost.com, Inc. (VITC) Activist Investor: Great Hill Investors Shares 5,419,697 % Outstanding 19.58% Share Price M 247M Enterprise Value 204M Net Cash 34M 11M 52 wk. range EV/ 19.5 On July 15 Great Hill delivered enough written consents to remove and replace the company s board of directors. We previously covered VITC in our May 14 and May 7 Catalyst Research Report, highlighting Great Hill s April 30 nomination of four people for election to VITC s board at the next annual meeting. On May 11 Great Hill commenced a consent solicitation for the purpose of removing and replacing four directors. Proxy Solicitor to Great Hill Investors For more information about MacKenzie see the Firm s description and Proxy Solicitor to Vitacost.com, Inc. For more information about TAG see the Firm s description and contact information at the end of this report. Page 8 of 12

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 12

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 12

11 PLATINUM SPONSORS Proxy Advisors The Altman Group is a full service proxy solicitation firm whose senior professionals have over 250 years of industry experience. We have developed one of the most experienced proxy fight teams in the industry, having been retained in 46 contested solicitations over the past 3 years alone and our 80% win record is unequaled. We were presented with the 2008 TOPS Award recognizing the firm with the highest rated proxy solicitation practice (the third consecutive win for us). We provide strategic consulting, shareholder identification, institutional and proxy advisory firm insight and advanced proxy solicitation services. Paul Schulman, Executive Managing Director pschulman@altmangroup.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 12

12 GOLD SPONSORS Laurel Hill Advisory Group is a full service, cross-border proxy solicitation firm whose partners and associates are highly recognized in the areas of corporate governance, shareholder activism, and mergers & acquisitions. Laurel Hill was founded in late 2007 by a team of experienced professionals who have worked on over a hundred proxy fights and deals in the U.S. and Canada in the past two years. We are the fastest growing proxy firm in North America providing expertise in corporate governance consulting, shareholder identification, corporate actions (tender offers, consent solicitations), strategic proxy solicitation advisory services, and shareholder asset recovery programs. Tom Cronin, Partner tcronin@laurelhillag.com Tel: SSG Capital Advisors, LLC ( SSG ) is a nationally recognized independent investment bank that assists public companies, as well as their stakeholders in providing strategic alternatives analysis including sales and acquisitions, optimizing capital structures, evaluating dividends and share buyback programs, business unit divestitures, monetization of intellectual property, preservation of NOL s, PIPEs, and strategic investments such as joint ventures. As a specialist in maximizing shareholder value we offer the expertise our clients need in today's complex and ever changing financial markets. Since 2001, SSG has successfully completed over 160 investment banking assignments on behalf of clients throughout North America and Europe. Mark Chesen, Managing Director mchesen@ssgca.com Tel: Page 12 of 12