The following constitutes Amendment No. 2 to the Schedule 13D filed by the undersigned (“Amendment No. 2”). This Amendment No. 2 amends the Schedule 13D as specifically set forth herein.
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Item 2.
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Identity and Background.
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Item 2 (a) is hereby amended and restated to read as follows:
(a) This statement is filed by:
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(i)
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Starboard Value and Opportunity Master Fund Ltd, a Cayman Islands exempted company (“Starboard V&O Fund”), with respect to the Shares directly and beneficially owned by it;
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(ii)
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Starboard Value and Opportunity S LLC, a Delaware limited liability company (“Starboard LLC”), with respect to the Shares directly and beneficially owned by it;
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(iii)
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Starboard Value LP (“Starboard Value LP”), as the investment manager of Starboard V&O Fund and of a certain managed account (the “Starboard Value LP Account”) and the manager of Starboard LLC;
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(iv)
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Starboard Value GP LLC (“Starboard Value GP”), as the general partner of Starboard Value LP;
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(v)
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Starboard Principal Co LP (“Principal Co”), as a member of Starboard Value GP;
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(vi)
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Starboard Principal Co GP LLC (“Principal GP”), as the general partner of Principal Co;
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(vii)
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Jeffrey C. Smith, as a member of Principal GP and as a member of each of the Management Committee of Starboard Value GP and the Management Committee of Principal GP;
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(viii)
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Mark Mitchell, as a member of Principal GP and as a member of each of the Management Committee of Starboard Value GP and the Management Committee of Principal GP; and
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(ix)
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Peter A. Feld, as a member of Principal GP and as a member of each of the Management Committee of Starboard Value GP and the Management Committee of Principal GP.
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Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing Agreement dated July 27, 2011. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.
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Item 3.
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Source and Amount of Funds or Other Consideration.
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Item 3 is hereby amended and restated to read as follows:
The Shares purchased by each of Starboard V&O Fund and Starboard LLC and held in the Starboard Value LP Account were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted, as set forth in Schedule A, which is incorporated by reference herein. The aggregate purchase price of the 2,813,031 Shares beneficially owned by Starboard V&O Fund is approximately $18,973,938, excluding brokerage commissions. The aggregate purchase price of the 1,174,289 Shares beneficially owned by Starboard LLC is approximately $7,740,136, excluding brokerage commissions. The aggregate purchase price of the 578,680 Shares held in the Starboard Value LP Account is approximately $4,704,106 excluding brokerage commissions.
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Item 4.
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Purpose of Transaction.
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Item 4 is hereby amended to add the following:
On January 11, 2012, Starboard Value LP delivered a letter to the Board of Directors of the Issuer (the “Board”) and the Issuer’s newly appointed CEO, Henry C. Newell. In the letter, the Reporting Persons stated that while the Issuer’s decisions to sell its Print & Color brands and close its Brokaw, Wisconsin mill are steps in the right direction, the Issuer’s evaluation of strategic alternatives should not end there and the Board should retain a reputable financial advisor to evaluate all alternatives to maximize value, including a potential sale of the Paper segment or the Issuer as a whole. The Reporting Persons noted that the Issuer has a history of failing to achieve its financial targets in the Paper segment, as evidenced by the Issuer’s recent admission that its Print & Color franchise had not earned acceptable returns since 2002 and was operating at a significant financial loss prior to its sale. The Reporting Persons therefore seriously question whether continuing to invest in the Specialty Products business, rather than including it as part of a broad strategic alternatives review, is the best use of shareholder capital and management time and attention.
The Reporting Persons also stated that if the Board doubts whether a sale process could generate sufficient interest in a transaction at this time, it is the Reporting Persons’ understanding that numerous potential buyers have previously expressed a desire to acquire the Tissue business or the Issuer as a whole, but that the Issuer has not been willing to engage in discussions in furtherance of a negotiated transaction.
The Reporting Persons stressed their firm belief that shareholder representation on the Board is crucial to ensuring impartiality and a clear focus on the best interests of all shareholders. The Reporting Persons also noted that they have identified several highly qualified, independent directors with significant and successful experience in the tissue and paper industries who can bring a fresh perspective into the boardroom and can be extremely helpful in evaluating and executing on initiatives to create value at the Issuer. The Reporting Persons remain open to working with the Issuer to reconstitute the Board with individuals capable of critically analyzing important strategic initiatives, such as the potential sale of the Paper segment or the Issuer as a whole, and the expansion of the Tissue business into new areas of the away-from-home market. A copy of the letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
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Item 5.
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Interest in Securities of the Issuer.
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Items 5(a) -5(c) are hereby amended and restated to read as follows:
The aggregate percentage of Shares reported owned by each person named herein is based upon 49,174,548 Shares outstanding, as of October 31, 2011, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 8, 2011.
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(a)
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As of the close of business on January 10, 2012, Starboard V&O Fund beneficially owned 2,813,031 Shares.
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Percentage: Approximately 5.7%.
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(b)
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1. Sole power to vote or direct vote: 2,813,031
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 2,813,031
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4. Shared power to dispose or direct the disposition: 0
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(c)
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The transactions in the Shares by Starboard V&O Fund during the past 60 days are set forth in Schedule A and are incorporated herein by reference.
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(a)
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As of the close of business on January 10, 2012, Starboard LLC beneficially owned 1,174,289 Shares.
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Percentage: Approximately 2.4%.
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(b)
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1. Sole power to vote or direct vote: 1,174,289
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 1,174,289
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4. Shared power to dispose or direct the disposition: 0
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(c)
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Starboard LLC has not entered into any transactions in the Shares during the past 60 days.
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(a)
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As of the close of business on January 10, 2012, 578,680 Shares were held in the Starboard Value LP Account. Starboard Value LP, as the investment manager of Starboard V&O Fund and the Manager of Starboard LLC, may be deemed the beneficial owner of the (i) 2,813,031 Shares owned by Starboard V&O Fund, (ii) 1,174,289 Shares owned by Starboard LLC and (iii) 578,680 Shares held in the Starboard Value LP Account.
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Percentage: Approximately 9.3%.
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(b)
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1. Sole power to vote or direct vote: 4,566,000
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 4,566,000
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4. Shared power to dispose or direct the disposition: 0
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(c)
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The transactions in the Shares by Starboard Value LP through the Starboard Value LP Account and on behalf of Starboard V&O Fund during the past 60 days are set forth in Schedule A and are incorporated herein by reference.
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(a)
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Starboard Value GP, as the general partner of Starboard Value LP, may be deemed the beneficial owner of the (i) 2,813,031 Shares owned by Starboard V&O Fund, (ii) 1,174,289 Shares owned by Starboard LLC and (iii) 578,680 Shares held in the Starboard Value LP Account.
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Percentage: Approximately 9.3%.
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(b)
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1. Sole power to vote or direct vote: 4,566,000
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 4,566,000
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4. Shared power to dispose or direct the disposition: 0
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(c)
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Starboard Value GP has not entered into any transactions in the Shares during the past 60 days. The transactions in the Shares on behalf of Starboard V&O Fund and through the Starboard Value LP Account during the past 60 days are set forth in Schedule A and are incorporated herein by reference.
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(a)
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Principal Co, as a member of Starboard Value GP, may be deemed the beneficial owner of the (i) 2,813,031 Shares owned by Starboard V&O Fund, (ii) 1,174,289 Shares owned by Starboard LLC and (iii) 578,680 Shares held in the Starboard Value LP Account.
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Percentage: Approximately 9.3%.
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(b)
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1. Sole power to vote or direct vote: 4,566,000
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 4,566,000
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4. Shared power to dispose or direct the disposition: 0
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(c)
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Principal Co has not entered into any transactions in the Shares during the past 60 days. The transactions in the Shares on behalf of Starboard V&O Fund and through the Starboard Value LP Account during the past 60 days are set forth in Schedule A and are incorporated herein by reference.
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(a)
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Principal GP, as the general partner of Principal Co, may be deemed the beneficial owner of the (i) 2,813,031 Shares owned by Starboard V&O Fund, (ii) 1,174,289 Shares owned by Starboard LLC and (iii) 578,680 Shares held in the Starboard Value LP Account.
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Percentage: Approximately 9.3%.
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(b)
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1. Sole power to vote or direct vote: 4,566,000
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 4,566,000
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4. Shared power to dispose or direct the disposition: 0
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(c)
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Principal GP has not entered into any transactions in the Shares during the past 60 days. The transactions in the Shares on behalf of Starboard V&O Fund and through the Starboard Value LP Account during the past 60 days are set forth in Schedule A and are incorporated herein by reference.
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G.
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Messrs. Smith, Mitchell and Feld
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(a)
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Each of Messrs. Smith, Mitchell and Feld, as a member of Principal GP and as a member of each of the Management Committee of Starboard Value GP and the Management Committee of Principal GP, may be deemed the beneficial owner of the (i) 2,813,031 Shares owned by Starboard V&O Fund, (ii) 1,174,289 Shares owned by Starboard LLC and (iii) 578,680 Shares held in the Starboard Value LP Account.
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Percentage: Approximately 9.3%.
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(b)
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1. Sole power to vote or direct vote: 0
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2. Shared power to vote or direct vote: 4,566,000
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3. Sole power to dispose or direct the disposition: 0
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4. Shared power to dispose or direct the disposition: 4,566,000
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(c)
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None of Messrs. Smith, Mitchell or Feld has entered into any transactions in the Shares during the past 60 days. The transactions in the Shares on behalf of Starboard V&O Fund and through the Starboard Value LP Account during the past 60 days are set forth in Schedule A and are incorporated herein by reference.
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Item 7.
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Material to be Filed as Exhibits.
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Item 7 is hereby amended to include the following exhibit:
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99.1
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Letter to the Board.
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: January 11, 2012
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STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD
By: Starboard Value LP,
its investment manager
STARBOARD VALUE AND OPPORTUNITY S LLC
By: Starboard Value LP,
its manager
STARBOARD VALUE LP
By: Starboard Value GP LLC,
its general partner
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STARBOARD VALUE GP LLC
By: Starboard Principal Co LP,
its member
STARBOARD PRINCIPAL CO LP
By: Starboard Principal Co GP LLC,
its general partner
STARBOARD PRINCIPAL CO GP LLC
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By:
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Name:
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Jeffrey C. Smith
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Title:
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Authorized Signatory
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JEFFREY C. SMITH
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Individually and as attorney-in-fact for Mark Mitchell and Peter A. Feld
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SCHEDULE A
Transactions in the Shares During the Past 60 Days
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Shares of Common Stock
Purchased
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Price Per
Share($)
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Date of
Purchase
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STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD
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273,533
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8.3500
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01/09/12
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4,787
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8.3596
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01/09/12
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STARBOARD VALUE LP
(Through the Starboard Value LP Account)
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75,000
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7.8448
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12/01/11
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6,236
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7.9436
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12/02/11
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22,097
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7.9857
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12/05/11
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14,939
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7.9972
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12/06/11
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11,000
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7.9799
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12/07/11
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94,240
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7.9855
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12/08/11
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31,488
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8.1987
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12/09/11
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88,872
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8.1447
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12/12/11
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50,000
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8.2500
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12/13/11
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56,128
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8.2125
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12/13/11
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126,467
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8.3500
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01/09/12
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2,213
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8.3596
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01/09/12
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