CATALYST EQUITY RESEARCH REPORT ™ Weekly Research Highlighting Activist Investments

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HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™

HIGHLIGHTING ACTIVIST INVESTMENTS Week Ending December 19, 2014

SYMBOL COMPANY INVESTOR

AAB.TO Aberdeen International Meson Capital; Nightscape Capital ALSN Allison Transmission ValueAct Capital ALTV Alteva Inc. North Star Investment Management AWI Armstrong Worldwide ValueAct Capital BCO The Brinks Company GAMCO Investors BGFV Big 5 Sporting Goods Stadium Capital BXE Bellatrix Exploration Orange Capital CRDC Cardica Inc. Broadfin Capital DAKP Dakota Plains Holdings Lone Star Value DDXS diaDexus Inc. Leap Tide Capital ENTR Entropic Communications Vertex Capital Advisors EXA Exa Corp Discovery Group FEIM Frequency Electronics Privet Fund FMTB Fairmount Bancorp Joseph Stilwell GRIF Griffin Land & Nurseries GAMCO Investors HTZ Hertz Global Holdings Carl Icahn IMN Imation Corp Clinton Group JMBA Jamba, Inc. JCP Investment KO The Coca-Cola Company Wintergreen Advisers LM Legg Mason Trian Partners NOA North American Energy Partners FrontFour Capital OI Owen-Illinois American Atlantic Investments PERY Perry Ellis International Legion Partners; CalSTRS PTRY The Pantry, Inc. JCP Investment; Lone Star Value VOLC Volcano Corporation Engaged Capital

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.

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Aberdeen International Inc. (AAB.TO) Activist Investor: Meson Capital; Nightscape Capital

Investor Info Catalyst Info Shares 7,800,000 Catalyst:

Meson and Nightscape requisitioned a special meeting to reconstitute AAB's board http://finance.yahoo.com/news/meson-capital-nightscape-capital-requisition-184600148.html Comment: We initially covered AAB on November 18 when Meson called on the Company to cease proceeding with a dilutive private placement under the current terms http://finance.yahoo.com/news/major-shareholder-demands-aberdeen-cease-172900021.html

% Outstanding 9.0% Cost Basis Not Avail Company Info Share Price 0.16 Revenue -9M Market Cap 14M Enterprise Value -20M Net Cash 34M EBITDA N/A 52 wk. range 0.11 – 0.20 EV/EBITDA N/A

Allison Transmission (ALSN)

Activist Investor: ValueAct Capital

Investor Info Catalyst Info Shares 19,125,204 Catalyst:

ALSN entered into a cooperation agreement with VA to add 1 rep to the board. http://www.sec.gov/Archives/edgar/data/1411207/000119312514442023/d837700dex991.htm

% Outstanding 10.77% Cost Basis Not Avail Company Info Share Price 33.52 Revenue 2.1B Market Cap 5.9B Enterprise Value 8.2B Net Cash -2.4B EBITDA 689M 52 wk. range 26.15 – 34.41 EV/EBITDA 11.9

Alteva Inc. (ALTV)

Activist Investor: North Star Investment Management

Investor Info Catalyst Info Shares 544,626 Catalyst:

North Star sent a letter to ALTV's Chairman requesting more transparency regarding the substantial capital on its balance sheet and encouraged the company to examine a sale. Comment: We initially covered ALTV on May 23 when Juniper Investment Company disclosed a 6.1% "active" stake in Alteva and sent two letters to the company's interim CEO requesting they examine a sale. May 8 letter: http://www.sec.gov/Archives/edgar/data/104777/000094787114000348/ss214545_ex99c.htm May 27 letter http://www.sec.gov/Archives/edgar/data/104777/000094787114000348/ss214545_ex99d.htm

% Outstanding 9.1% Cost Basis 8.81 Company Info Share Price 7.00 Revenue 30M Market Cap 40M Enterprise Value 13M Net Cash 28M EBITDA -4M 52 wk. range 5.25 – 9.11 EV/EBITDA Negative

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Armstrong Worldwide Industries, Inc. (AWI) Activist Investor: ValueAct Capital

Investor Info Catalyst Info Shares 9,200,000 Catalyst:

AWI entered into a nomination agreement with VA to appoint 1 representative to the board Comment: We initially covered AWI on July 31 when ValueAct disclosed a 16.5% "active" stake in AWI. VA has purchased most of its shares since July 21, 2014

% Outstanding 16.8% Cost Basis Not Avail Company Info Share Price 49.38 Revenue 2.7B Market Cap 2.7B Enterprise Value 3.7B Net Cash -1B EBITDA 286M 52 wk. range 44.00 – 61.90 EV/EBITDA 12.9

The Brinks Company (BCO) Activist Investor: GAMCO Investors

Investor Info Catalyst Info Shares 3,953,251 Catalyst:

On December 16 GAMCO announced it may seek board representation

% Outstanding 8.14% Cost Basis Not Avail Company Info Share Price 23.75 Revenue 3.9B Market Cap 1.2B Enterprise Value 1.4B Net Cash -271M EBITDA 310M 52 wk. range 19.15 – 35.73 EV/EBITDA 4.4

Big 5 Sporting Goods Corp. (BGFV) Activist Investor: Stadium Capital Management

Investor Info Catalyst Info Shares 2,513,220 Catalyst:

On December 18 Stadium Capital submitted a shareholder proposal to declassify the board Comment: We previously covered BGFV in our August 26, 2011 Catalyst Research Report, highlighting Stadium Capital’s 15.3% “active” ownership stake. On October 25, 2011 BGFV appointed one individual recommended by Stadium Capital to an expanded board of 7 directors.

% Outstanding 11.3% Cost Basis 10.11 Company Info Share Price 14.57 Revenue 976M Market Cap 323M Enterprise Value 339M Net Cash -53M EBITDA 51M 52 wk. range 9.19 – 20.25 EV/EBITDA 6.9

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Bellatrix Exploration (BXE) Activist Investor: Orange Capital

Investor Info Catalyst Info Shares 27,452,063 Catalyst:

BXE agreed to appoint 2 Orange Capital reps to the board effective Jan 1. http://www.sec.gov/Archives/edgar/data/1426756/000090266414004609/p14-2333exhibit2.htm Comment: We initially covered BXE on August 18 when Orange Capital disclosed a 5.3% ownership and announced its intention to discuss, among other things (i) hiring an independent financial advisor tasked to provide the Board with recommendations on strategic alternatives, capital allocation and improved investor communications; (ii) the size and composition of the Board; (iii) steps to raise the valuation to be in line with its intrinsic value, which current valuation is well below the intermediate sized company peers in the Canadian exploration and production sector (based on both price to proved-developed reserves and on enterprise value to debt adjusted cash flow); (iv) refraining from future dilutive equity issuances and outlining a clear use of proceeds for all newly raised capital; and (v) exploring alternatives to highlight the value of the infrastructure assets, including but not limited to improving disclosure on the cost and fair market value of the midstream infrastructure and / or exploring a possible joint venture, initial public offering or sale of the midstream assets. On September 4 Orange Capital increased its ownership from 5.3% to 6.4% On September 12 Orange Capital increased its ownership from 6.4% to 7.4% On September 25 Orange Capital increased its ownership from 7.4% to 9.2% On October 3 Orange Capital increased its ownership from 9.2% to 10.2% On November 12 Orange Capital increased its ownership to 12.4% On December 3 Orange Capital increased its ownership from 12.4% to 13.5%

Legal counsel to Orange Capital

% Outstanding 14.3% Cost Basis 6.67 Company Info Share Price 3.56 Revenue 388M Market Cap 705M Enterprise Value 1.0B Net Cash -356M EBITDA 230M 52 wk. range 2.97 – 10.70 EV/EBITDA 4.14

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Cardica Inc. (CRDC) Activist Investor: Broadfin Capital

Investor Info Catalyst Info Shares 8,874,992 Catalyst:

Broadfin issued a statement thanking shareholders for their support with electing its 3 nominees to the board http://finance.yahoo.com/news/broadfin-capital-thanks-shareholders-overwhelming-140000011.html Comment: We initially covered CRDC on July 24 when Broadfin disclosed a 9.8% "active" stake in CRDC and said it is continuing discussions about the Board's composition. Broadfin sent a letter to the board nominating 4 directors and suggesting that a board change be brought about through a thoughtful and collaborative process rather than a proxy contest. http://www.sec.gov/Archives/edgar/data/1178104/000092189514002025/ex991to13da110042002_091014.htm Broadfin filed proxy materials to elect 3 new directors to the board of CRDC to be held 12/31 http://www.sec.gov/Archives/edgar/data/1178104/000141588914003200/prec14a10042002_12112014.htm www.EnhanceCardica.com Broadfin issued a letter to CRDC shareholders urging them to elect their 3 nominees at the upcoming election. http://www.sec.gov/Archives/edgar/data/1178104/000092189514002380/dfan14a10042002_11132104.htm

Proxy Solicitor to Cardica

Legal counsel to Broadfin Capital

% Outstanding 17.3% Cost Basis 0.87 Company Info Share Price 0.68 Revenue 4M Market Cap 61M Enterprise Value 25M Net Cash 32M EBITDA -16M 52 wk. range 0.56 – 1.61 EV/EBITDA Negative

Dakota Plains Holdings, Inc. (DAKP) Activist Investor: Lone Star Value

Investor Info Catalyst Info Shares 2,997,000 Catalyst:

Lone Star sent a letter to the board recommending the Company create a MLP structure for the Pioneer Transloading Facility and initiate a strategic alternatives review process in order to create additional value for shareholders http://www.sec.gov/Archives/edgar/data/1367311/000141588914003880/ex991to13da309482011_121214.pdf Comment: We initially covered DAKP on June 17 when Lone Star disclosed a 5.5% "active" stake On July 22 DAKP increased the size of the board from 6 to 7 and added one rep from Lone Star http://finance.yahoo.com/news/dakota-plains-holdings-inc-appoints-124500377.html

Legal counsel to Lone Star Value

% Outstanding 5.5% Cost Basis 2.15 Company Info Share Price 1.90 Revenue 20M Market Cap 96M Enterprise Value 59M Net Cash -7M EBITDA 4M 52 wk. range 0.95 – 2.86 EV/EBITDA 15.0

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diaDexus, Inc. (DDXS) Activist Investor: Leap Tide

Investor Info Catalyst Info Shares 4,898,749 Catalyst:

Leap Tide Capital increased its ownership from 7.7% to 8.9% Comment: We initially covered DDXS on September 5 when Norman Pessin disclosed a 4.9% "active" stake in DDXS On October 17 Leap Tide disclosed a 7.7% "active" stake

Legal counsel to Leap Tide Capital

Legal counsel to Norman Pessin

% Outstanding 8.9% Cost Basis 0.45 Company Info Share Price 0.33 Revenue 27M Market Cap 20M Enterprise Value 19M Net Cash 1M EBITDA N/A 52 wk. range 0.28 – 1.18 EV/EBITDA N/A

Entropic Communications (ENTR) Activist Investor: Vertex Capital Advisors

Investor Info Catalyst Info Shares 8,097,413 Catalyst:

Vertex increased its ownership from 7.9% to 9% Comment: We initially covered on September 10 when Vertex disclosed a 7.9% "active" stake

Legal counsel to Vertex Capital

% Outstanding 9.0% Cost Basis 2.68 Company Info Share Price 2.27 Revenue 207M Market Cap 209M Enterprise Value 138M Net Cash 89M EBITDA -55M 52 wk. range 2.15 – 4.80 EV/EBITDA Negative

Exa Corporation (EXA) Activist Investor: Discovery Group

Investor Info Catalyst Info Shares 972,367 Catalyst:

Discovery submitted a shareholder proposal to declassify the board http://www.sec.gov/Archives/edgar/data/890264/000157104914007263/ex1.htm Comment: We initially covered EXA on June 5 when Discovery increased its “active” stake in EXA to 6.8% at an average cost of $8.82/share Discovery sent a letter to EXA recommending they hire a bank to examine strategic alternatives, including a sale. In the letter Discovery suggests a takeover value in the range of $16-$20/share http://www.sec.gov/Archives/edgar/data/890264/000157104914004775/ex1.htm

% Outstanding 7.0% Cost Basis 8.85 Company Info Share Price 11.35 Revenue 60M Market Cap 161M Enterprise Value 130M Net Cash 20M EBITDA 0.5M 52 wk. range 8.45 – 15.95 EV/EBITDA 319.1

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Frequency Electronics, Inc. (FEIM) Activist Investor: Privet Fund

Investor Info Catalyst Info Shares 774,504 Catalyst:

Privet increased its stake from 7.9% to 9.0% Comment: We initially covered FEIM on August 2 when Privet disclosed a 6.0% “active” stake in FEIM. Privet has increased its “active” stake in FEIM from 6% in early August to 7.9%

% Outstanding 9.0% Cost Basis 10.20 Company Info Share Price 10.99 Revenue 77M Market Cap 94M Enterprise Value 94M Net Cash 9M EBITDA 8M 52 wk. range 10.00 – 13.31 EV/EBITDA 11.9

Fairmount Bancorp, Inc. (FMTB) Activist Investor: Joseph Stilwell

Investor Info Catalyst Info Shares 34,048 Catalyst:

On December 16 Stilwell announced he will seek board representation at the next annual meeting if the business is not sold Comment: We initially covered FMTB on September 21, 2012 when Stilwell disclosed a 5.2% “active” ownership stake in FMTB and stated his belief that the value of the bank’s assets were not adequately reflected in the stock price. On March 4 Stilwell announced his belief that FMTB should be sold

% Outstanding 7.02% Cost Basis Not Avail Company Info Share Price 22.25 Revenue 2M Market Cap 10M Enterprise Value 10M Net Cash 0 EBITDA N/A 52 wk. range 20.00 – 23.16 EV/EBITDA N/A

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Griffin Land & Nurseries (GRIF) Activist Investor: GAMCO Investors

Investor Info Catalyst Info Shares 1,890,615 Catalyst:

GAMCO sent a letter to GRIF's CEO asking "What is the underlying value of the Company's assets today?" and "What alternatives has the Company explored to surface stockholder value?" http://www.sec.gov/Archives/edgar/data/807249/000080724914000320/grif_38.pdf Comment: We initially covered GRIF in our December 7, 2012 Catalyst Research Reports, highlighting GAMCO’s plans to nominate directors for election to GRIF’s board. On December 10, 2012 GAMCO recommended 2 individuals for consideration as directors on GRIF’s board. On March 13, 2013 GAMCO formally nominated 2 individuals for election to GRIF’s board. On May 8, 2013 ISS recommended a withhold vote for all of the Company’s nominees at the May 14 annual meeting. On November 25 GAMCO sent a letter to GRIF saying, "We have not heard from anyone since last year's Annual Meeting update concerning the examination of REIT or MLP status. In light of the upcoming deadline to submit stockholder proposals for consideration at the 2014 Annual Meeting, we would welcome your input so that our proxy voting committee can best determine what course of action it should take in its continued attempts to recognize shareholder value creation" On December 5, 2013 GAMCO submitted a shareholder proposal requesting the Board take the necessary steps to qualify the Company as a REIT or MLP On March 11, 2014 GAMCO announced it may nominate one or more people to the board On March 21 GAMCO nominated two individuals to GRIF’s board A copy of GAMCO’s nomination notice is available here: http://www.sec.gov/Archives/edgar/data/807249/000080724914000085/grif_31.pdf On April 14 GAMCO filed preliminary proxy materials to elect 2 directors http://www.sec.gov/Archives/edgar/data/1037390/000092189514000813/prec14a05867017_04102014.htm On April 22 GAMCO filed its Definitive proxy statement to elect 2 directors http://www.sec.gov/Archives/edgar/data/1037390/000092189514000880/defc14a05867017_04222014.htm GAMCO’s nominees were defeated at the annual meeting GAMCO announced plans to submit stockholder proposals at the 2015 annual meeting

Legal counsel to GAMCO Investors

% Outstanding 36.71% Cost Basis Not Avail Company Info Share Price 30.00 Revenue 25M Market Cap 155M Enterprise Value 209M Net Cash -56M EBITDA 8M 52 wk. range 25.60 – 34.36 EV/EBITDA 25.1

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Hertz Global Holdings (HTZ) Activist Investor: Jana Partners

Investor Info Catalyst Info Shares 51,922,405 Catalyst:

Icahn increased his ownership to 11.34% Comment: 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 http://finance.yahoo.com/news/hertz-reaches-agreement-principle-carl-201500071.html 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. 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. http://www.sec.gov/Archives/edgar/data/1159159/000090266414004233/p14-2158exhb.htm Jana increased its stake to 8.3% and said it continues to hold discussions with certain board members regarding management succession and board composition On November 21 HTZ announced the hiring of a new CEO, a former President of United Airlines http://finance.yahoo.com/news/hertz-appoints-john-p-tague-212500942.html On November 25 Icahn disclosed an increase in his ownership to 10.77%

Legal counsel to Jana Partners

% Outstanding 11.34% Cost Basis 27.26 Company Info Share Price 22.61 Revenue 11B Market Cap 11B Enterprise Value 26B Net Cash -16B EBITDA 1.9B 52 wk. range 18.50 – 31.61 EV/EBITDA 13.7

Imation Corp (IMN) Activist Investor: Clinton Group

Investor Info Catalyst Info Shares Not Avail Catalyst:

Clinton announced plans to nominate 3 candidates for election to the board http://www.sec.gov/Archives/edgar/data/1014111/000090266414004593/p14-2329exhibit_1.htm

Legal counsel to Clinton Group

% Outstanding Not Avail Cost Basis Not Avail Company Info Share Price 3.99 Revenue 765M Market Cap 171M Enterprise Value 43M Net Cash 91M EBITDA -14M 52 wk. range 2.69 – 6.60 EV/EBITDA Negative

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Jamba Inc. (JMBA) Activist Investor: JCP Investment

Investor Info Catalyst Info Shares 400,000 Catalyst:

JCP nominated 6 candidates to JMBA's board Comment: We initially covered JMBA on July 23 when Engaged Capital disclosed a 7% "active" ownership stake in JMBA and suggested several ways to improve value, including (i) right-sizing the G&A cost structure, (ii) eliminating the earnings drag from the unprofitable New York City locations, (iii) eliminating the spend on unprofitable non-core growth initiatives; and/or (iv) refranchising a significant portion of the owned locations. On December 11 we reported that Engaged had increased its ownership stake from 7% to 8.2%

Legal counsel to JCP Investment

Legal counsel to Engaged Capital

% Outstanding 2.30% Cost Basis Not Avail Company Info Share Price 14.26 Revenue 218M Market Cap 255M Enterprise Value 205M Net Cash 30M EBITDA 6M 52 wk. range 9.58 – 14.95 EV/EBITDA 31.7

The Coca-Cola Company Activist Investor: Wintergreen Advisers

Investor Info Catalyst Info Shares 2,628,000 Catalyst:

Wintergreen issued a presentation titled, "Coca-Cola's Fizzy Math: How Bad Performance, Excessive Pay and Weak Governance are Harming Shareholders". http://www.wintergreenadvisers.com/pdf/20141215-WintergreenAdvisers-KO-Report.pdf

% Outstanding 0.06% Cost Basis Not Avail Company Info Share Price 42.35 Revenue 46B Market Cap 187B Enterprise Value 200B Net Cash -19B EBITDA 13B 52 wk. range 36.89 – 45.00 EV/EBITDA 15.2

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Legg Mason Inc. (LM) Activist Investor: Trian Fund

Investor Info Catalyst Info Shares 12,887,964 Catalyst:

On December 19 LM provided a waiver for Trian to increase its ownership to 13% Comment: We initially covered LM in our June 29, 2007 Catalyst Research Reports, highlighting Pershing Square Capital’s acquisition of 1.5% of LM shares outstanding when the stock was trading around $98. Pershing no longer holds this position. We also covered LM in our January 1, 2010 and October 23 2009 research when LM announced Nelson Peltz, the CEO and founding Partner of Trian, would be elected to an expanded board of 14 members. In exchange for the board position Trian agreed to vote its shares in favor of LM’s Director nominees for a period of two years. On March 31, 2010 LG’s board authorized a share repurchase program for up to $1 billion of common stock. We also highlighted Trian’s increase in ownership by 1,709,600 shares between January and June 2010. On August 4, 2011 Trian increased its ownership in LM from 7.6% to 9.4%. Trian's representative on LM's board resigned effective immediately to devote more time to other commitments. In its statement Trian said, "Trian continues to be a large shareholder of Legg Mason and we currently expect to remain an engaged shareholder for the foreseeable future"

% Outstanding 11.29% Cost Basis Not Avail Company Info Share Price 54.33 Revenue 2.8B Market Cap 6.3B Enterprise Value 5.9B Net Cash 80M EBITDA 595M 52 wk. range 39.60 – 57.15 EV/EBITDA 9.6

North American Energy Partners (NOA) Activist Investor: FrontFour Capital

Investor Info Catalyst Info Shares 3,688,259 Catalyst:

FrontFour increased its ownership from 9.2% to 10.4% Comment: We initially covered NOA on September 23 when FrontFour disclosed a 9.2% "active" stake and expressed its concern that despite management’s progress in the areas of expense reduction, fleet rationalization and balance sheet deleveraging, the shares trade at a material discount to their intrinsic value

Legal counsel to FrontFour Capital

% Outstanding 10.4% Cost Basis 4.31 Company Info Share Price 3.19 Revenue 409M Market Cap 112M Enterprise Value 231M Net Cash -116M EBITDA 50M 52 wk. range 2.92 – 8.50 EV/EBITDA 4.7

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Owens-Illinois, Inc. (OI) Activist Investor: Atlantic Investment Management

Investor Info Catalyst Info Shares 12,091,431 Catalyst:

AIM sent a letter to OI's lead director urging the board to (i) announce the early retirement and succession plan for the CEO, (ii) separate the roles of Chairman and CEO, (iii) implement an $0.08 per share quarterly dividend, (iv) move to mark-to-market penion accounting, which should increase earnings by at least $0.50 and (v) re-initiate a $3.50+ EPS target as soon as possible. http://www.sec.gov/Archives/edgar/data/812074/000090571814000806/exhibit1.htm Comment: We initially covered OI on October 13, 2011 when AIM disclosed a 5.1% “active” ownership stake in OI. On September 18 we reported that AIM increased its "active" stake from 5.7% to 6.7%

% Outstanding 7.3% Cost Basis 26.15 Company Info Share Price 27.12 Revenue 7.0B Market Cap 4.5B Enterprise Value 7.3B Net Cash -3.2B EBITDA 1.14B 52 wk. range 23.31 – 35.95 EV/EBITDA 6.5

Perry Ellis International, Inc. (PERY) Activist Investor: Legion Partners; CalSTRS

Investor Info Catalyst Info Shares 949,813 Catalyst:

PERY replaced a long-standing board member with a director having investment banking expertise in the retail sector http://finance.yahoo.com/news/perry-ellis-international-announces-appointment-211000250.html Comment: We initially covered PERY on July 16, 2014 when Legion Partners and CalSTRS formed an investment group, disclosed a 6% “active” stake, and highlighted several positive aspects of the business, including:

• A large portfolio totaling over 30 highly recognized owned and licensed brands, including: Axist, Ben Hogan, C&C California, Cubavera, Farah, Grand Slam, Jantzen, John Henry, Laundry by Shelli Segal, Original Penguin, Perry Ellis, Rafaella, and Savane, and the distribution of the Callaway Golf, Nike, Jag, Jack Nicklaus and PGA TOUR brands under licensing arrangements;

• Extensive distribution to approximately 20,000 retail doors; • Long-term relationships with key retailers; • Global sourcing infrastructure; • Licensing revenue streams from owned brands; and • Rapidly growing golf apparel business

Legion also demanded the board review strategic alternatives as well as (i) annual election of directors, (ii) a majority vote standard, (iii) a reduction in related party transactions, (iv) allow shareholders to act by written consent, (v) lower the threshold to call a special meeting, (vi) separate the Chair and CEO position, and (vii) change the supermajority vote requirement to a simple majority to amend the certificate of incorporation. On November 18 Legion and CalSTRS sent a letter to the board demanding they form an independent special committee to evaluate strategic alternatives http://finance.yahoo.com/news/calstrs-legion-partners-call-perry-210000133.html On November 20 PERY issued a letter to its shareholders highlighting a profitability improvement plan http://finance.yahoo.com/news/perry-ellis-international-issues-open-180000254.html

Legal counsel to Legion Partners

% Outstanding 6.0% Cost Basis 16.33 Company Info Share Price 25.54 Revenue 888M Market Cap 385M Enterprise Value 478M Net Cash -119M EBITDA 39M 52 wk. range 12.37 – 26.86 EV/EBITDA 12.1

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The Pantry, Inc. (PTRY) Activist Investor: JCP Investment/Lone Star Value

Investor Info Catalyst Info Shares ~450,000 Catalyst:

On December 18 PTRY was sold to Alimentation Couche-Tard for $36.75/share in cash Comment: We initially covered PTRY on January 23, 2014 when JCP and Lone Star formed a group called the "Concerned Pantry Shareholders" and announced plans to replace 3 board members at PTRY’s next annual meeting on March 13, 2014. A copy of the activist’s press release is available here: http://www.sec.gov/Archives/edgar/data/915862/000092189514000082/dfan14a08569009_01232014.htm On February 5 JCP/Lonestar filed its preliminary proxy statement highlighting several ways to improve value over the next 5 to 10 years, including: monetize the real estate (possible REIT), reduce capital spending and debt, reduce 100M G&A expense, consider dividend/buyback. A copy of the activists’ preliminary proxy statement is available here: http://www.sec.gov/Archives/edgar/data/915862/000141588914000380/prec14a08569009_01312014.htm A copy of PTRY’s preliminary proxy statement is available here: http://www.sec.gov/Archives/edgar/data/915862/000119312514041002/d657694dprer14a.htm On February 19 JCP/LoneStar issued a presentation titled, "Enhancing Stockholder Value at The Pantry" A copy of the presentation is available here: http://www.sec.gov/Archives/edgar/data/915862/000092189514000386/ex1todfan14a08569009_021914.pdf On February 25 JCP/Lone Star sent a letter to shareholders highlighting the reasons to elect new board members. A copy of the dissident’s letter is available here: http://www.sec.gov/Archives/edgar/data/915862/000092189514000386/ex1todfan14a08569009_021914.pdf Glass Lewis recommends shareholders vote for all 3 dissident nominees; ISS recommends shareholders vote for 2 of the dissidents 3 nominees JCP/Lone Star won three board seats at the Company's annual meeting. A copy of JCP/Lone Star’s press release is available here: http://finance.yahoo.com/news/preliminary-results-indicate-concerned-pantry-153100422.html

Proxy Solicitor to The Pantry

Legal counsel to JCP Investment/Lone Star Value

% Outstanding 1.9% Cost Basis Not Avail Company Info Share Price 36.54 Revenue 7.6B Market Cap 845M Enterprise Value 1.5B Net Cash -851M EBITDA 221M 52 wk. range 12.30 – 36.71 EV/EBITDA 6.9

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Volcano Corporation (VOLC) Activist Investor: Engaged Capital

Investor Info Catalyst Info Shares 2,638,403 Catalyst:

Engaged announced it is supporting VOLC’s sale to Royal Philips for $18/share Comment: We initially covered VOLC on November 4, 2013 when Engaged Capital disclosed a 5.1% "active" stake (avg. cost 21.68/share) in VOLC and stated its belief that the shares ascribe minimal value to (a) the potential for sustained revenue growth from the fractional flow reserve (“FFR”) and peripheral intra-vascular ultrasound (“IVUS”) businesses as the penetration rates of these technologies increase, (b) the likelihood of material margin improvements and cash flow expansion as VOLC begins to generate operating leverage, (c) the opportunity to generate high rates of return through the disciplined allocation of its approximately $500 million cash balance, and (d) the attractiveness as an acquisition target given the advantaged and desirable position as the market leader in both FFR and IVUS. On February 18, 2013 VOLC announced it has changed its incentive compensation structure to better align management's pay with shareholder performance. Engaged says the valuation opportunity with VOLC is at least a 3:1 upside/downside ratio from current prices (at the time, VOLC was trading at $21.80/share). On September 26 Engaged sent a letter to VOLC's board highlighting the reasons for underperformance and demanding the board set a new course, add shareholders to the board, conduct a CEO search, and examine strategic alternatives http://www.sec.gov/Archives/edgar/data/1354217/000141588914002939/ex991to13da109455003_092914.pdf Camber Capital increased its ownership from 6.12% to 9.8% and changed its filing status from "passive" to "active" stating that the current trading value does not reflect their intrinsic value

Legal counsel to Engaged Capital

% Outstanding 5.10% Cost Basis 21.68 Company Info Share Price 17.89 Revenue 395M Market Cap 923M Enterprise Value 858M Net Cash -243M EBITDA 16M 52 wk. range 9.81 – 24.62 EV/EBITDA 54.5

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PLATINUM SPONSORS – Broker-Dealer

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