Exhibit 10.1


 


Execution Copy


 


SETTLEMENT AND VOTING AGREEMENT


 


THIS
SETTLEMENT AND VOTING AGREEMENT (this “Agreement”) is made and executed as of
the 22nd day of May, 2009 (the “Effective Date”),
by, between and among Nature’s Sunshine Products, Inc., a Utah corporation
organized under the Utah Revised Business Corporation Act (“URBCA”) (the “Company”);
Prescott Group Aggressive Small Cap Master Fund, G.P., an Oklahoma general
partnership (the “Shareholder”); Kristine F. Hughes, Pauline Hughes Francis and
Eugene L. Hughes (collectively, the “Hughes Parties”).


 


RECITALS


 


A.                                   As of the date of this Agreement, the
Shareholder Beneficially Owns 1,865,383 shares of common stock of the Company,
representing approximately twelve percent (12%) of the issued and outstanding
common stock of the Company, and previously has been granted proxies described
on Exhibit A hereto to vote an aggregate of 6,151,675 shares of common
stock of the Company (the “Proxies”).


 


B.                                     By letter dated February 27, 2009,
the Shareholder made a written demand (the “Meeting Demand”) pursuant to Section 16-10a-702(1)(b) of
the URBCA that the Company hold a special meeting of shareholders, or in
lieu thereof an annual meeting of the shareholders, for the purpose of electing
the slate of directors proposed by the Shareholder.


 


C.                                     By letter dated March 10, 2009,
the Shareholder or its Affiliates made a written demand (the “Inspection Demand”)
pursuant to Section 16-10a-1602(2) of the URBCA that the
Shareholder be allowed to inspect and copy the record of shareholders required
to be maintained by the Company pursuant to Section 16-10a-1601(3) of
the URBCA.  The Company provided to
the Shareholder the information requested in the Inspection Demand.


 


D.                                    The Shareholder filed but has not served
an action in the Fourth Judicial District Court for Utah County, Utah,
styled Prescott Group Aggressive Small Cap Master Fund, G.P. v. Nature’s
Sunshine Products, Inc., Civil No. 090401518 (the “Civil Action”),
asking the court to order an annual meeting of the Company’s shareholders.


 


E.                                      The Company, the Shareholder and the
Hughes Parties have agreed that, among other things, if the Company’s Board of
Directors (the “Board”) is reconstituted as set forth herein, the Shareholder
will withdraw the Meeting Demand, the Shareholder will terminate, withdraw or
dismiss all legal actions taken with respect to the Company or the Board; the
Shareholder and the Hughes Parties will release the Shareholder, the Hughes
Parties, the Company and the Board from all claims relating to the Meeting
Demand, the Inspection Demand and the Civil Action; and the Shareholder and the
Hughes Parties will vote its shares for the election of the members of the
reconstituted Board in the next annual meeting of the Company’s
shareholders.  The parties desire to
memorialize their compromise in this Agreement.


 





















 


AGREEMENT


 


NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as
follows:


 


1.                                       Certain Definitions.
For purposes of this Agreement:


 


1.1                                  “Affiliate” has the meaning set forth in Rule 12b-2
promulgated by the SEC under the Exchange Act.


 


1.2                                 “Beneficial Owner,” “Beneficial Ownership” and “Beneficially
Own” have the same meaning as set forth in Rule 13d-3 promulgated by
the SEC under the Exchange Act.


 


1.3                                 “SEC” means the Securities and Exchange Commission.


 


1.4                                 “Voting Shares” means (i) all equity securities of
the Company Beneficially Owned by the Shareholder or the Hughes Parties,
respectively, as of the date of this Agreement less any such shares disposed of
by the Shareholder after the Effective Date in compliance with Section 8.10
and (ii) all additional equity securities of the Company of which the
Shareholder or the Hughes Parties may acquire Beneficial Ownership during the
period from the date of this Agreement through the Voting Agreement Termination
Date.


 


2.                                       Withdrawal of Meeting Demand and
Acknowledgement Regarding Inspection Demand.  The Shareholder hereby irrevocably withdraws
the Meeting Demand and acknowledges the Company satisfied the Inspection
Demand.


 


3.                                       Distribution of Section 14(f) Statement. Within three (3) business days following the
execution of this Agreement, the Company will distribute to its shareholders
the information statement (the “Section 14(f) Statement”) required by
Section 14(f) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) and Rule 14f-1 promulgated pursuant thereto.


 


4.                                       Board Changes.  The following
actions shall be effective immediately following the tenth (10th) day
after the Company distributes to its shareholders the Section 14(f) Statement:


 


4.1                                 The number of directors constituting the Board shall be
increased to eight (8) in accordance with Section 3.2 of the
Bylaws of the Company and one of the newly created vacancies shall be assigned
to Class II and the other newly created vacancy shall be assigned to Class III
in accordance with Article IX of the Company’s Restated Articles of
Incorporation.


 


4.2                                 The resignations of Robert K. Bowen, Larry K.
Deppe, Pauline Hughes Francis, and Eugene L. Hughes as members of the
Board attached as Exhibits B-1 though B-4 and previously tendered to
the Company shall become effective in accordance with their terms leaving
Kristine F. Hughes as the sole remaining incumbent director assigned to Class III
and creating four vacancies on the Board in addition to the fifth vacancy
previously created by


 


2





















 


Franz Cristiani’s
prior resignation as a director effective March 1, 2007 and the sixth
and seventh vacancies created by the increase in the size of the Board of
directors as described in Section 4.1.


 


4.3                                 Each of the seven persons identified on Exhibit C as an
“Appointee” (collectively, the “Appointees”) shall be appointed, pursuant to Section 3.10
of the Bylaws of the Company and Section 16-10a-810(1)(c) of
the URBCA, to fill the seven vacancies on the Board and serve as directors
until the next shareholders’ meeting at which directors are elected and until
their respective successors shall be duly elected and qualified, unless they
resign, are removed or are otherwise disqualified from serving as a director of
the Company, and each such Appointee shall serve in the class set forth next to
his or her name on Exhibit C.


 


5.                                       Annual Meetings of the Shareholders.  The Company shall
use commercially reasonable efforts to hold an annual meeting of the
shareholders no later than December 31, 2009 unless otherwise agreed
by the then serving Board of Directors (the “Next Annual Meeting”).


 


6.                                       Voting Agreement.


 


6.1                                 The Shareholder and the Hughes Parties agree that from the
date of this Agreement and until immediately following the Next Annual Meeting
or any adjournment or postponement thereof or December 31, 2009, whichever
is earlier (the “Voting Agreement Termination Date”), at the Next Annual
Meeting or any other meeting of shareholders of the Company or any adjournment
or postponement thereof, and on every action or approval by written consent of
the shareholders of the Company, if any, the Shareholder and the Hughes Parties
will take such actions as are necessary to effect the intent of this Agreement,
including but not limited to the following:


 


6.1.1                        Vote all of the Voting Shares in favor of the Director
nominees recommended to the shareholders by the Board, which Director nominees
shall be the individuals listed in Exhibit C for the terms listed in Exhibit C
(unless they or any of them prior thereto shall have resigned or been removed
as a director or otherwise shall have refused to stand for election);


 


6.1.2                        Appear, or cause the holder of record of any Voting Shares
on any applicable record date to appear at such meeting or otherwise cause the
Voting Shares to be counted as present for purposes of establishing a quorum;
and


 


6.1.3                        None of the Shareholder or the Hughes Parties shall take any
position, make any statement or take any action inconsistent with the
foregoing.


 


6.2                                 In order to secure the performance of the Shareholder’s and
the Hughes Parties’ obligations under this Agreement, each such party hereby
irrevocably grants a proxy appointing Kristine F. Hughes and Pauline Hughes
Francis each as such party’s attorney-in-fact and proxy, with full power of
substitution, for and in its name, place and stead, to vote, express consent or
dissent, or otherwise to utilize such party’s Voting Shares solely to vote for
the Directors or nominees listed on Exhibit C at the Next Annual Meeting
or any other meeting of shareholders of the Company or any adjournment or
postponement thereof prior to the Voting Agreement Termination Date, in each
case in a manner consistent with Section 6.1.  Each of the Shareholder and the Hughes
Parties hereby represents and warrants that any proxies heretofore


 


3





















 


given
in respect of the Voting Shares are not irrevocable and that any such proxies
are hereby revoked.  Each such party
hereby affirms that THE PROXY AND POWER OF ATTORNEY SET FORTH IN THIS AGREEMENT
IS IRREVOCABLE AND COUPLED WITH AN INTEREST and shall expire on the Voting
Agreement Termination Date.


 


7.                                       Dismissal of Civil Action.  The Shareholder
concurrently with the execution of this Agreement has directed its attorney of
record in the Civil Action to file with the court a notice of dismissal
pursuant to Utah R. Civ. P. 41(a)(1) dismissing all claims
in the Civil Action without prejudice in the form attached hereto as Exhibit D.


 


8.                                       Standstill.  From and after the
Effective Date until the Voting Agreement Termination Date, the Shareholder and
the Hughes Parties and their respective agents, employees, officers, directors,
managers, control persons, representatives, successors, assigns, parent
corporations, subsidiaries, Affiliates and all other persons acting in concert
with or under the control or direction of any of the Shareholder or the Hughes
Parties shall not, directly or indirectly, in any manner without the prior
consent of the Company:


 


8.1                                 advise, encourage, support or influence any person with
respect to the voting or disposition of any shares of the company contrary to
the terms of this Agreement;


 


8.2                                 grant a proxy with respect to the voting of the shares of
the Company to any person other than as to matters not contemplated in the
proxy set forth in Section 6.2;


 


8.3                                 exercise any rights granted to the Shareholder pursuant to
any of the Proxies;


 


8.4                                 deposit any shares of the Company in a voting trust or enter
into any other arrangement or agreement with respect to the voting thereof
other than as to matters not contemplated in the proxy set forth in Section 6.2;


 


8.5                                 take any action, alone or in concert with any other person,
advise, finance, assist or participate in or encourage any person to take any
action which is prohibited to be taken by such party pursuant to this
Agreement, or make any investment in or enter into any arrangement with, any
other person that engages, or offers or proposes to engage in any of the
foregoing;


 


8.6                                 pursuant to the URBCA, directly or indirectly (or
assist any other person or entity directly or indirectly), make a demand or
seek a court order that the Company hold a special meeting of the shareholders,
or in lieu thereof an annual meeting of the shareholders, for any purpose including
without limitation the purpose of electing directors;


 


8.7                                 make, or cause to be made, any public statement or
announcement that relates to and constitutes an ad hominem attack on, or
relates to or otherwise disparages, the Company, its officers, directors,
employees, or any person who has served as an officer, director or employee of
the Company;


 


8.8                                 recommend or request or induce or attempt to induce any
other person to take any of the foregoing actions, or seek to advise, encourage
or influence any person with


 


4





















 


respect
to the voting of (or the execution of a written consent in respect of) any
shares of the Company, except in accordance with the terms of this Agreement;


 


8.9                                 propose any other slate of directors for election at the
Next Annual Meeting other than the individuals listed on Exhibit C (unless
they or any of them prior thereto shall have resigned or been removed as a
director or otherwise shall have refused to stand for election);


 


8.10                           assign or sell, or offer to assign or sell, any Voting
Shares in a private resale transaction or make a gift of any Voting Shares
unless the recipient of such shares agrees to be bound by this Agreement in the
same manner the Shareholder is bound hereto including without limitation the
provisions of Sections 6, 8 and 12 of this Agreement;


 


8.11                           disclose publicly or privately, in a manner that could
reasonably be expected to become public, any intention, plan or arrangement
inconsistent with the foregoing; or


 


8.12                           take any action challenging the validity or enforceability
of this Agreement.


 


9.                                       Release.  For good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, each of the Shareholder
and the Hughes Parties, acting for itself and its respective heirs, successors,
assigns, parent corporations, subsidiaries and Affiliates, and each of them
(the “Releasing Parties”), does hereby release and forever discharge the
Shareholder, the Hughes Parties, the Company, its subsidiaries and, as
applicable, each of their respective officers, directors, employees, agents,
attorneys, consultants, Affiliates, successors and assigns (the “Releasees”),
from and in respect of any and all claims and causes of action, whether based
on any federal, state or foreign law or right of action, direct, indirect or
representative in nature, foreseen or unforeseen, matured or unmatured, known
or unknown, which all or any of the Releasing Parties had or may have against
the Releasees, or any of them, of any kind, nature or type whatsoever, arising
from or related to the Meeting Demand, the Inspection Demand, and the Civil
Action, but not otherwise, up to the date of this Agreement, except that the
foregoing release does not release any rights and duties under this Agreement
or any claims the Releasing Parties may have for the breach of any provisions
of this Agreement.  The release provided
for herein is binding, unconditional, and final.


 


10.                                 Representations and Warranties of the
Shareholder.  The Shareholder represents and warrants to
the Company that (a) it Beneficially Owns the number of Voting Shares
as set forth in Recital A, and does not own, or have the right to acquire, any
economic or voting rights with respect to the Company’s securities except with
respect to the Voting Shares of the Shareholder and the Proxies; (b) it
has all requisite power and authority to execute, deliver and perform this
Agreement; (c) this Agreement constitutes a valid and binding
obligation of the Shareholder, enforceable in accordance with its terms;
and (d) no consent, approval, waiver, authorization or filing, which
has not already been obtained or is otherwise contemplated by this Agreement,
is necessary for the execution, delivery and performance by the Shareholder of
this Agreement.


 


5





















 


11.                                 Representations and Warranties of the
Company and the Hughes Parties.  The Company and the Hughes Parties severally
hereby represent and warrant to the Shareholder that (a) the Hughes
Parties Beneficially Own an aggregate of 3,187,623 Voting Shares, and do not
own, or have the right to acquire, any economic or voting rights with respect
to the Company’s securities except with respect to the Voting Shares of the
Hughes Parties;  (b) they have all requisite power and authority to
execute, deliver and perform this Agreement; (c) this Agreement
constitutes a valid and binding obligation of the Company and the Hughes
Parties, enforceable in accordance with its terms; (d) no consent,
approval, waiver, authorization or filing, which has not already been obtained
or is otherwise contemplated by this Agreement, is necessary for the execution,
delivery and performance by the Company or the Hughes Parties of this
Agreement.


 


12.                                 Additional Covenants.  Until the Voting
Termination Date, the Company shall and the Shareholder and the Hughes Parties
shall cause the Company to:


 


12.1                           propose to be elected at the Next Annual Meeting all
directors identified on Exhibit C, except to the extent any such director
prior thereto shall have resigned, been removed as a director or otherwise
shall have refused to stand for election at the Next Annual Meeting;


 


12.2                           take all reasonable actions necessary to cause the terms of
the directors assigned to Class I, Class II and Class III as
specified on Exhibit C to terminate only as also specified on Exhibit C;
and


 


12.3                           refrain from increasing or decreasing the size of the Board
from eight members.


 


13.                                 Miscellaneous Provisions.  The following
provisions are also an integral part of this Agreement:


 


13.1                           Public Disclosures.  On or before the
date upon which the Company shall be required to file with the SEC a Current
Report on Form 8-K with respect to this Agreement and the Company actions
contemplated herein, the Company shall issue a press release in a form provided
to the Hughes Parties and the Shareholder prior to such issuance.  Except as set forth in this Agreement, none
of the Company, the Shareholder or the Hughes Parties shall make any public
announcement or statement concerning this Agreement or public comment on this
Agreement; provided, however, that any party may make such announcement,
statement or comment concerning this Agreement as is required by law,
including, without limitation, any filing required by applicable rules or
regulations of the SEC, or the rules of any stock exchange; provided,
further, that the Company may respond to shareholder, analyst and media
inquiries regarding the terms of the Agreement.  The Company shall disclose this Agreement in
a Current Report on Form 8-K filed with the SEC in the time period
required by applicable law and file this Agreement as an Exhibit to such Form 8-K.


 


13.2                           Successors and Assigns.  This Agreement
shall bind and benefit the parties’ respective heirs, successors, assigns,
affiliates, officers, directors, agents, servants, employees and
attorneys.  No party shall assign this
Agreement or any rights or obligations


 


6





















 


hereunder
without, with respect to the Shareholder, the prior written consent of the
Company, and with respect to the Company and the Hughes Parties, the prior
written consent of the Shareholder.


 


13.3                           No Assignment of Claims.  The
parties represent that  they have
not assigned or otherwise transferred any interests, rights, causes of action,
or claims they have, may have, or could have had against one another, including
without limitation, those claims arising out of, concerning, or relating to the
Civil Action.


 


13.4                           Captions; Interpretation.  The captions used
in this Agreement are inserted for reference purposes only and shall not be
deemed to define, limit, extend, describe, or affect in any way the meaning,
scope or interpretation of any of the terms of this Agreement or its intent.  As the context requires, the singular shall
include the plural, and vice versa; and the masculine shall include the
feminine and neuter, and vice versa.


 


13.5                           Counterparts.  This Agreement may
be signed in any number of counterparts with the same effect as if the
signatures upon any counterpart were upon the same instrument.  All signed counterparts shall be deemed to be
one original.  A facsimile transmittal
bearing a photocopied signature shall be deemed an original.


 


13.6                           Severability.  The provisions of
this Agreement are severable and should any provision be void, voidable,
unenforceable or invalid, such provision shall not affect the remaining
provisions of this Agreement.


 


13.7                           Waiver of Breach.  Any waiver by any
party of any breach of any kind by the other, whether direct or implied, shall
not be construed as a continuing waiver of, or consent to, any subsequent
breach of this Agreement.


 


13.8                           No Concession of Liability. This Agreement shall not in any event constitute, be
construed or deemed a concession or admission of any liability or wrongdoing of
any of the parties.


 


13.9                           Entire Agreement; Amendment.  With respect to the
subject matter of this Agreement, this Agreement constitutes the entire
agreement among the parties, and it may not be altered, modified or amended except
by written agreement signed by the Company and the Shareholder.  With respect to the subject matter of this
Agreement, and except as expressly provided in the Agreement, all prior and
contemporaneous agreements, arrangements and understandings among the parties
are hereby superseded and rescinded.


 


13.10                     Governing Law; Venue.  This Agreement
shall be interpreted, construed and enforced according to the substantive laws
of the State of Utah.  Any dispute
arising out of this Agreement, or the breach thereof, shall be brought
exclusively in any state or federal court of competent jurisdiction in the
State of Utah, the parties expressly consenting to jurisdiction and venue in
such courts.


 


13.11                     Attorney Fees.  If any party shall
breach its obligations under this Agreement, the party not in breach shall be
entitled to recover its costs, expenses and reasonable attorney fees from the
breaching party, whether such sums be expended with or without suit and


 


7





















 


regardless
of the forum (including but not limited to recourse in connection with any
bankruptcy case, insolvency proceeding, or arbitration proceeding).


 


13.12                     Cumulative Remedies; Specific Performance.  The rights and
remedies of the parties shall be construed cumulatively, and none of such
rights and remedies shall be exclusive of, or in lieu or limitation of, any
other right, remedy or priority allowed by law, unless specifically set forth
herein.  The parties acknowledge that
irreparable harm would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached and that legal remedies alone for breach of this Agreement
may be inadequate.  The parties further
acknowledge that any party by whom this Agreement is enforceable shall be
entitled to institute and prosecute proceedings, either at law or in equity, to
seek specific performance of the terms and conditions of this Agreement, to
obtain injunctive relief, or to obtain any other appropriate relief or
remedy.  Any requirements for securing or
posting of any bond in connection with such remedies are hereby waived.


 


13.13                     Notice.  Any notice or other communication required or
permitted by this Agreement shall be deemed to have been received (a) upon
personal delivery or actual receipt thereof or (b) two business days
after such notice shall be faxed to the party at the fax number stated below
(or such other number as the party shall provide in writing) or deposited in
the United States mail, postage prepaid and certified (return receipt
requested) and addressed to the party at the address set forth below (or such
other address as the party shall provide in writing):


 


If to the Company, at the following addresses:


 


Jamon A. Jarvis


General Counsel, Chief Compliance Officer


NATURE’S SUNSHINE PRODUCTS, INC.


75 East 1700 South


Provo, Utah 
84606


Fax: 
801.342.4555


 


Nolan S. Taylor


DORSEY & WHITNEY LLP


136 South Main Street, Suite 1000


Salt Lake City, Utah  84101


Fax: 
801.933.7373


 


If to the Shareholder, at the following addresses:


 


Phil Frohlich


PRESCOTT GROUP AGGRESSIVE SMALL CAP MASTER FUND, G.P.


1924 South Utica Avenue, #1120


Tulsa, Oklahoma 
74104


Fax: 
918.742.7303


 


8





















 


Richard C. Taggart


KRUSE LANDA MAYCOCK & RICKS, LLC


136 East South Temple, Suite 2100


Salt Lake City, Utah  84111


Fax:  801.531.7091


 


If to the Hughes Parties, at the following addresses:


 


Pauline Hughes Francis


P.O. Box 1007


Salem, UT 84653


Fax: 
801.423.3130


 


Eugene L. Hughes


P.O. Box 51755


Provo, UT 84605


 


Kristine F. Hughes


P.O. Box 51755


Provo, UT 84605


 


13.14                     Mutual Participation in Document
Preparation.  Each party has participated materially in the
negotiation and preparation of this Agreement and any related items; in the
event of a dispute concerning the interpretation of any provision of this
Agreement or any related item, the rule of construction to the effect that
certain ambiguities are to be construed against the party drafting a document
will not apply.


 


13.15                     Counsel Review. The parties severally acknowledge that prior to executing
this Agreement, they have either reviewed this Agreement with their legal
counsel, or have had the opportunity to review this Agreement with legal
counsel of their choice and have elected to forego counsel review.


 


13.16                     No Third-Party Beneficiary Interests.  Nothing contained
in this Agreement is intended to benefit any person or entity other than the
parties to this Agreement and the persons or entities who are referred to herein
(including without limitation in Section 9); and no representation or
warranty is intended for the benefit of, or to be relied upon by, any person or
entity which is not a party to this Agreement.


 


13.17                     Warranty of Authorization.  Each individual executing
this Agreement in a representative capacity warrants that he/she has complete
and unrestricted authority to execute this Agreement and to bind the party for
which such individual purports to act.


 


13.18                     Further Acts.  Upon reasonable
request, the respective parties shall perform such further acts and shall
execute and deliver such additional documents and instruments as shall be
necessary or desirable to carry out the intent of this Agreement or to induce
compliance with this Agreement.


 


9





















 


13.19                     Survival of Representations.  All of the
representations, warranties, covenants, and releases of the parties set forth
in this Agreement shall survive the execution and delivery of this Agreement.


 


[Signature pages follow.]


 


10





















 


IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first set forth above.


 


	
   

  	
   

  	
  NATURE’S
  SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Its: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kristine F. Hughes

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eugene L. Hughes

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Pauline Hughes
  Francis

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRESCOTT GROUP
  AGGRESSIVE SMALL CAP MASTER FUND, G.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  PRESCOTT GROUP
  AGGRESSIVE SMALL CAP, L.P., AND PRESCOTT GROUP AGGRESSIVE SMALL CAP II, L.P.

  
	
   

  	
   

  	
  Its: 

  	
  General Partners

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  PRESCOTT GROUP
  CAPITAL MANAGEMENT, L.L.C.

  
	
   

  	
   

  	
  Their:

  	
   General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
   

  	
  Phil Frohlich

  
	
   

  	
   

  	
  Its: 

  	
  Manager

  
					



 
















 


EXHIBIT A


 


Proxies
Granted to Shareholders


 


	
  Shareholder
  Name

  	
   

  	
  Number of Shares Subject to Proxy

  	
   

  
	
  Prism Partners, L.P.;
  Prism Offshore Fund, Ltd.; Prism Capital Management, Inc.; and Delta
  Partners, LLC

  	
   

  	
  1,785,473

  	
   

  
	
  Paradigm Capital
  Management, Inc.

  	
   

  	
  1,573,737

  	
   

  
	
  Wynnefield Partners
  Small Cap Value, L.P.

  	
   

  	
  359,720

  	
   

  
	
  Wynnefield Partners
  Small Cap Value, L.P. I

  	
   

  	
  550,782

  	
   

  
	
  Wynnefield Small Cap
  Value Offshore Fund, Ltd.

  	
   

  	
  342,500

  	
   

  
	
  Channel Partnership II,
  L.P.

  	
   

  	
  30,000

  	
   

  
	
  Red Mountain Capital
  Partners II, L.P.

  	
   

  	
  755,050

  	
   

  
	
  Red Mountain Capital
  Partners III, L.P.

  	
   

  	
  562,424

  	
   

  
	
  Lake Street Fund L.P.

  	
   

  	
  191,989

  	
   

  
	
  TOTAL

  	
   

  	
  6,151,675

  	
   

  



 

















 


EXHIBITS B-1 to B-4


 


Director
Resignations


 

















 


EXHIBIT C


 


Board
Members


 


	
  Status

  	
   

  	
  Name

  	
   

  	
  Class

  	
   

  	
  Term Expiry

  
	
  Appointee

  	
   

  	
  Jeffrey D. Watkins

  	
   

  	
  Class I

  	
   

  	
  2010

  
	
  Appointee

  	
   

  	
  Willem Mesdag

  	
   

  	
  Class I

  	
   

  	
  2010

  
	
  Appointee

  	
   

  	
  Michael D. Dean

  	
   

  	
  Class II

  	
   

  	
  2011

  
	
  Appointee

  	
   

  	
  Douglas Faggioli

  	
   

  	
  Class II

  	
   

  	
  2011

  
	
  Appointee

  	
   

  	
  Candace King Weir

  	
   

  	
  Class II

  	
   

  	
  2011

  
	
  Incumbent

  	
   

  	
  Kristine F. Hughes

  	
   

  	
  Class III

  	
   

  	
  2012

  
	
  Appointee

  	
   

  	
  Pauline Hughes Francis

  	
   

  	
  Class III

  	
   

  	
  2012

  
	
  Appointee

  	
   

  	
  Albert Ricker Dowden

  	
   

  	
  Class III

  	
   

  	
  2012

  



 

















 


EXHIBIT D


 


Notice
of Dismissal