Blueprint

0001654954-16-001124.txt : 20160803 0001654954-16-001124.hdr.sgml : 20160803 20160803071722 ACCESSION NUMBER: 0001654954-16-001124 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20160803 DATE AS OF CHANGE: 20160803 GROUP MEMBERS: FUNDAMENTAL GLOBAL INVESTORS LLC GROUP MEMBERS: FUNDAMENTAL GLOBAL PARTNERS LP GROUP MEMBERS: FUNDAMENTAL GLOBAL PARTNERS MASTER FUND LP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ITERIS, INC. CENTRAL INDEX KEY: 0000350868 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 952588496 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-33679 FILM NUMBER: 161802208 BUSINESS ADDRESS: STREET 1: 1700 CARNEGIE AVENUE STREET 2: SUITE 100 CITY: SANTA ANA STATE: CA ZIP: 92705 BUSINESS PHONE: 949-270-9400 MAIL ADDRESS: STREET 1: 1700 CARNEGIE AVENUE STREET 2: SUITE 100 CITY: SANTA ANA STATE: CA ZIP: 92705 FORMER COMPANY: FORMER CONFORMED NAME: ITERIS HOLDINGS INC DATE OF NAME CHANGE: 20031107 FORMER COMPANY: FORMER CONFORMED NAME: ODETICS INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RELM WIRELESS CORP CENTRAL INDEX KEY: 0000002186 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 593486297 STATE OF INCORPORATION: NV FISCAL YEAR END: 1209 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 7100 TECHNOLOGY DRIVE CITY: WEST MELBOURNE STATE: FL ZIP: 32904 BUSINESS PHONE: 321-984-1414 MAIL ADDRESS: STREET 1: 7100 TECHNOLOGY DRIVE CITY: WEST MELBOURNE STATE: FL ZIP: 32904 FORMER COMPANY: FORMER CONFORMED NAME: ADAGE INC DATE OF NAME CHANGE: 19920703 SC 13D/A 1 rwc_sc13da.htm SCHEDULE 13D Blueprint

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)

Under the Securities Exchange Act of 1934

(Amendment No. 3)*

ITERIS, INC.

(Name of Issuer)

Common Stock, $0.10 par value per share

(Title of Class of Securities)

46564T107

(CUSIP Number)

William P. Kelly

RELM Wireless Corporation

7100 Technology Drive

West Melbourne, Florida 32904

(321) 984-1414

D. Kyle Cerminara

Fundamental Global Investors, LLC

4201 Congress Street, Suite 140

Charlotte, North Carolina 28209

(704) 323-6851

With a copy to:

Derek D. Bork

Thompson Hine LLP

3900 Key Center

127 Public Square

Cleveland, Ohio 44114

(216) 566-5500

(Name, Address and Telephone Number of PersonAuthorized to Receive Notices and Communications)

July 29, 2016

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box □.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

_______________

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

1	NAME OF REPORTING PERSON Fundamental Global Investors, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) ☐(b) ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)			☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION North Carolina
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 2,319,094
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 2,319,094
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 2,319,094
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.2%
14	TYPE OF REPORTING PERSON OO

1	NAME OF REPORTING PERSON Fundamental Global Partners, LP
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) ☐(b) ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)			☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 164,523
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 164,523
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 164,523
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.5%
14	TYPE OF REPORTING PERSON PN

1	NAME OF REPORTING PERSON Fundamental Global Partners Master Fund, LP
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) ☐(b) ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)			☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 376,422
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 376,422
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 376,422
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.2%
14	TYPE OF REPORTING PERSON PN

1	NAME OF REPORTING PERSON RELM Wireless Corporation
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) ☐(b) ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)			☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION Nevada
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 1,778,149
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 1,778,149
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,778,149
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.5%
14	TYPE OF REPORTING PERSON CO

This Amendment No. 3 to Statement of Beneficial Ownership on Schedule 13D (this “Amendment No. 3”) amends the Statement of Beneficial Ownership on Schedule 13D filed by the Reporting Persons on February 26, 2016 (as amended, the “Schedule 13D” or this “Statement”), with respect to the Common Stock, $0.10 par value per share (the “Common Stock”), of Iteris, Inc., a Delaware corporation (the “Company”). Capitalized terms used but not defined in this Amendment No. 3 shall have the meanings set forth in the Schedule 13D. Except as amended and supplemented by this Amendment No. 3, the Schedule 13D remains unchanged.

Item 3. Source and Amount of Funds or Other Consideration.

The total cost for purchasing the Common Stock reported as owned by the Reporting Persons, including brokerage commissions, was approximately as follows: FGPP, $510,220, FGPM, $1,169,725, and RELM, $3,242,460. The source of these funds was working capital of FGPP, FGPM, and RELM, as applicable.

Item 4. Purpose of Transaction.

On July 29, 2016, RELM Wireless Corporation, Fundamental Global Investors, LLC and certain of their affiliates entered into an agreement (the “Settlement Agreement”) with the Company relating to representation on the Company’s Board of Directors (the “Board”).

Pursuant to the Settlement Agreement, the Company has agreed to expand the size of the Board to eight directors and immediately appoint Mr. Cerminara to the Board, to nominate Mr. Cerminara for election to the Board at the Company’s 2016 Annual Meeting of Stockholders (the “2016 Annual Meeting”), to recompose the Board as provided in the Settlement Agreement, and to add another independent director to the Board. For the 2016 Annual Meeting, the Board will reduce the size of the Board, to be effective as of the 2016 Annual Meeting, to six or seven directors, as appropriate, and will nominate a slate of director nominees, consisting of Mr. Cerminara, Messrs. Gerard M. Mooney, Joe Bergera and Mikel H. Williams, two of the other current board members to be chosen by the Nominating and Corporate Governance Committee of the Board (the “Committee”), and an independent director if such individual is agreed upon prior to the filing of the Company’s proxy statement for the 2016 Annual Meeting (the “Company Slate”). Pursuant to the Settlement Agreement, Mr. Cerminara was appointed to the Board on August 1, 2016.

The Settlement Agreement provides that the independent director will be selected by Committee subject to the approval of a majority of the members of the Company Slate then serving on the Board. In the event that the independent director is not selected prior to the filing of the proxy statement, the Company has agreed to submit a proposal to its stockholders to approve an amendment of the Company’s bylaws to decrease the range of the size of the Board to not less than six nor more than eleven directors, with the parties to the Settlement Agreement voting in favor of this proposal. The Reporting Persons have also agreed to customary standstill provisions for a period ending on the date that is 30 days before the last date on which a stockholder of the Company may submit nominations to the Board in connection with the Company’s 2017 Annual Meeting of Stockholders.

A copy of the Settlement Agreement is filed as Exhibit 99.1 to this Statement and is hereby incorporated herein by reference.

None of the Reporting Persons has any present plan or proposal that would result in any of the actions described in paragraphs (a) through (j) of Item 4 of Schedule 13D, except as may be proposed by Mr. Cerminara in his capacity as a director of the Company or by such Board with Mr. Cerminara’s participation. The Reporting Persons reserve the right in the future to formulate any such plans or proposals, and to take any actions with respect to their investments in the Company, including any or all of the actions described in paragraphs (a) through (j) of Item 4 of Schedule 13D.

The Reporting Persons may in the future acquire additional shares of common stock of the Company or dispose of some or all of the shares of common stock of the Company held by them in open-market transactions or privately negotiated transactions, on such terms and at such times as the Reporting Persons may deem advisable, subject to applicable law.

Item 5. Interest in Securities of the Issuer.

(a) The Reporting Persons beneficially own in the aggregate 2,319,094 shares of Common Stock, which represents approximately 7.2% of the Company’s outstanding shares of Common Stock.

Each of FGPP, FGPM and RELM directly holds the number and percentage of shares of Common Stock disclosed as beneficially owned by it in the applicable table set forth on the cover page to this Statement. Share purchases by RELM were made through Tactical Capital Investments LLC, a Delaware limited liability company and a wholly-owned subsidiary of RELM. None of the other Reporting Persons or, to the Reporting Persons’ knowledge, any individuals identified on Schedule B to the Schedule 13D directly holds any of the shares of Common Stock disclosed in this Statement, except as previously described in Item 5 of the Schedule 13D or as described below.

100 shares of Common Stock are held by RELM of record; the remaining shares of Common Stock held by RELM are in an account that is managed by CWA Asset Management Group, LLC (doing business as “Capital Wealth Advisors”). CWA Asset Management Group, LLC provides wealth management, estate planning and family office services to individual investors. Fundamental Global Investors, LLC owns 50% of CWA Asset Management Group, LLC.

Each percentage ownership of shares of Common Stock set forth in this Statement is based on the 32,057,503 shares of Common Stock reported by the Company as outstanding as of June 8, 2016 in its Annual Report on Form 10-K/A filed with the Securities and Exchange Commission on July 29, 2016 with respect to its fiscal year ended March 31, 2016.

(c) The transactions effected by the Reporting Persons (FGPP and FGPM) in the Common Stock since the filing date of Amendment No. 2 to the Schedule 13D are set forth on Schedule A to this Statement. Each of these transactions was effected through the open market.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Information set forth under Item 4 hereof is hereby incorporated herein by reference.

Pursuant to rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the Reporting Persons have entered into an agreement with respect to the joint filing of this Amendment No. 3, which agreement is set forth on the signature page to this Statement.

Item 7. Material to Be Filed as Exhibits.

99.1	Agreement, dated as of July 29, 2016, by and among Iteris, Inc. and RELM Wireless Corporation, Fundamental Global Investors, LLC and certain of their affiliates.

SIGNATURE

After reasonable inquiry and to the best of our knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete and correct.

In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of this Statement on Schedule 13D with respect to the Common Stock of the Company.

Dated: August 3, 2016

FUNDAMENTAL GLOBAL PARTNERS, LP,

by Fundamental Global Partners GP, LLC, its general partner

/s/ D. Kyle Cerminara

D. Kyle Cerminara

Partner and Manager

FUNDAMENTAL GLOBAL PARTNERS MASTER FUND, LP,

by FG Partners GP, LLC, its general partner

/s/ D. Kyle Cerminara

D. Kyle Cerminara

Manager

FUNDAMENTAL GLOBAL INVESTORS, LLC

/s/ D. Kyle Cerminara

D. Kyle Cerminara

Chief Executive Officer, Partner and Manager

FGI FUNDS MANAGEMENT, LLC

/s/ D. Kyle Cerminara

D. Kyle Cerminara

Manager

/s/ D. Kyle Cerminara

D. Kyle Cerminara

/s/ Lewis M. Johnson

Lewis M. Johnson

/s/ Joseph H. Moglia

Joseph H. Moglia

RELM WIRELESS CORPORATION

/s/ William P. Kelly

William P. Kelly

EVP and Chief Financial Officer

Schedule A

Transactions by Fundamental Global Partners, LP and Fundamental Global Partners Master Fund, LP in the Common Stock Since the Filing of Amendment No. 2 to Schedule 13D:

Fundamental Global Partners, LP:

Transaction Date	Number of Shares Bought/(Sold)	Average Price Per Share ($)

7/11/2016	2,542	$ 3.4290
7/20/2016	4,530	$ 3.5645

Fundamental Global Partners Master Fund, LP:

Transaction Date	Number of Shares Bought/(Sold)	Average Price Per Share ($)

7/11/2016	5,933	$ 3.4290
7/20/2016	10,570	$ 3.5645

EX-99.1 2 rwc_ex991.htm AGREEMENT Blueprint

Exhibit 99.1

AGREEMENT

This Agreement dated as of July 29, 2016 (this “Agreement”), is made and entered into by and between Iteris, Inc., a Delaware corporation (the “Company”), D. Kyle Cerminara, an individual (the “Investor Designee”), and each of the Persons (as defined herein) set forth on the signature page hereto, including the Investor Designee (each, an “Investor” and collectively, the “Investors” or “Investor Group”).

WHEREAS, the Investor Group is deemed to beneficially own shares of the Company’s Common Stock, par value $0.10 per share (the “Common Stock”) totaling, in the aggregate, 2,319,094 shares or approximately 7.2% of the Common Stock outstanding as of the date hereof; and

WHEREAS, the Company and the Investor Group believe that the best interests of the Company and its stockholders would be served at this time by, among other things, (i) agreeing to immediately add the Investor Designee to the Company’s Board of Directors (the “Board”); (ii) agreeing that the Investor Designee shall stand for election to the Board at the Company’s 2016 Annual Meeting of Stockholders (the “2016 Annual Meeting”); (iii) agreeing to add another independent director to the Board; (iv) recomposing the Board as provided for herein; and (v) providing for certain restrictions and obligations on the Investors and their respective Affiliates and Associates.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

1. Definitions. The capitalized terms set forth in this Agreement shall have the meanings as specified on Exhibit A attached hereto.

2. Constitution of the Board. Within two (2) Business Days following the execution of this Agreement by all parties hereto, the Board, at a meeting duly called, will adopt a resolution, in accordance with the Company’s Bylaws, to increase the size of the Board from seven (7) directors to eight (8) directors, and will fill the newly created vacancy on the Board to add the Investor Designee to the Board. The Nominating and Corporate Governance Committee of the Board (the “NCG Committee”) has previously determined that the following directors will be among the directors standing for re-election at the 2016 Annual Meeting: Gerard M. Mooney, Joe Bergera and Mikel H. Williams (the “Incumbent Directors”). The NCG Committee and the Board, at a meeting duly called, will take all necessary action (a) to nominate a slate of director nominees, consisting of the Investor Designee, the Incumbent Directors, two of the other current Board members to be chosen by the NCG Committee, and the Independent Director (as defined below), if such individual is agreed upon pursuant to the terms of this Agreement prior to the filing of the Company’s proxy statement for the 2016 Annual Meeting (the “Company Slate”), to serve as directors of the Company until the 2017 Annual Meeting of Stockholders (the “2017 Annual Meeting”); (b) to reduce the size of the Board to seven (7) directors in accordance with the Company’s Bylaws (or subject to clause (2)(a) below to six (6) directors if the Independent Director is not approved prior to the filing of the proxy statement for the 2016 Annual Meeting), to be effective as of the 2016 Annual Meeting; and (c) to retain a nationally recognized recruiting firm to assist the NCG Committee in locating a qualified independent director with relevant industry and public company experience to join the Company’s Board of Directors (the “Independent Director”). The Independent Director shall be selected by the NCG Committee subject to the approval of a majority of the members of the Company Slate then serving on the Board. Within two (2) business days after the approval of the Independent Director, the Board shall promptly thereafter adopt a resolution to increase the size of the Board to seven (7) directors and to appoint the Independent Director to the Board to fill the vacancy thereon. The Investor Designee shall have the right to attend, as an ex-officio member, the NCG Committee meetings at which the selection of the Independent Director is discussed and approved. Upon the appointment of the Investor Designee to the Board pursuant to this Section 2, the Investors agree that any prior notices to designate director nominees previously submitted by them to the Company shall be null and void and of no further effect.

(a) In the event that the Independent Director shall not be selected prior to the filing of the proxy statement, the Company shall submit a proposal to its stockholders to approve the amendment of the Company’s bylaws to decrease the range of the size of the Board to not less than six (6) nor more than eleven (11) directors (the “Stockholder Proposal”). Each member of the Investor Group and the Investor Designee shall vote all of the shares of the Common Stock it or he owns at the 2016 Annual Meeting in support of the Stockholder Proposal (and will not support or participate in any campaign to gain support to vote against the Stockholder Proposal.). If the Stockholder Proposal is not approved, subject to the provisions of Section 2, the Investor Group also shall not, directly or indirectly, at any time during the Effective Period, take any action to fill the vacancy on the Board resulting from the failure of the Stockholder Proposal to be approved;

(b) For the period commencing on the date hereof and continuing until the date that is 30 days before the last date on which a stockholder of the Company may submit nominations for the Board in connection with the 2017 Annual Meeting of Stockholders (the “Effective Period”) and provided the members of the Investor Group and the Investor Designee are in compliance with this Agreement, then:

(i) The Board shall direct the Company and its officers and agents to solicit votes for the election of each of the nominees included in the Company Slate (including the Investor Designee and the Independent Director, to the extent the Independent Director is located in time to be included in the Proxy Materials for the 2016 Annual Meeting), and the Company will use its commercially reasonable efforts to secure the election of the individuals on the Company Slate at the 2016 Annual Meeting, including the Investor Designee (and the Independent Director, to the extent such person is located in time to be included in the Proxy Materials for the 2016 Annual Meeting).

(ii) If, during the Effective Period, the Investor Designee is unable or unwilling to continue to serve on the Board, and as a result, there is a vacancy created on the Board, the Board shall, consistent with its fiduciary duties, appoint a replacement designated by the Investor Group to fill the resulting vacancy, provided that such substitute Investor Designee (A) qualifies as an “independent” director under the rules and regulations of the SEC and the stock exchange on which the Common Stock is then traded, (B) is reasonably satisfactory to the Board, and (C) otherwise satisfies the requirements for nomination set forth in the preceding paragraphs.

(iii) Each of the parties hereto agrees that the Investor Designee and the Independent Director, upon appointment or election to the Board, will serve as an integral member of the Board and be governed by the same protections and obligations regarding confidentiality, conflicts of interests, fiduciary duties, trading and disclosure policies and other governance guidelines, and shall have the same rights and benefits, including (but not limited to) with respect to insurance, indemnification, compensation, reimbursements, and fees, as are applicable to all non-management directors of the Company.

(c) During the Effective Period, the Board will (i) not waive the deadline for any shareholder under the Company’s advance notice bylaw provisions with respect to the 2016 Annual Meeting; (ii) not expand the size of the Board above seven (7) members (except as specifically set forth herein), (iii) not establish or maintain an executive or similar committee without the Investor Designee being a member of such committee, and (iv) consider in good faith the addition of the Investor Designee and the Independent Director to appropriate committees of the Board; provided however, that the parties agree that the Investor Designee shall not serve as a member of the NCG Committee.

(d) During the Effective Period and provided the Board and the Company otherwise are in compliance with this Agreement, each member of the Investor Group and the Investor Designee will vote all of the shares of the Common Stock it or he owns at the 2016 Annual Meeting in support of all of the members on the Company Slate (and will not support or participate in any “withhold the vote” or similar campaign, or support any other Board nominees other than the Company Slate);

(e) Notwithstanding the foregoing, the Investor Designee agrees to promptly tender his resignation from the Board and any committee of the Board on which he then sits upon the occurrence of any of the following during the Effective Period, which remedy shall be in addition to any other remedies available at law or equity including, but not limited to, specific performance:

(i) Any member of the Investor Group (or any of its Affiliates or Associates) (1) submits a written notice to nominate a director or directors in accordance with Section 15 of Article II of the Company’s Bylaws other than with respect to the Investor Designee or the Independent Director, or (2) calls a special meeting of the stockholders of the Company; and

(ii) the members of the Investor Group, together with all of their respective Affiliates, cease to collectively beneficially own at least 5% of the then outstanding Common Stock (other than as a result of dilution caused by the issuance of Common Stock by the Company).

3. Standstill. During the Effective Period, no member of the Investor Group or the Investor Designee shall, directly or indirectly (and each member of the Investor Group shall cause its respective Affiliates and Associates not to, directly or indirectly):

(a) propose any candidates for election as directors of the Company (other than submissions to the NCG Committee for election of the Investor Designee or the Independent Director to the Board); provided however, that this Section shall not prohibit any members of the Investor Group or their Affiliates and Associates from engaging in private non-public communications with respect to such candidates with other members of the Investor Group and their respective Affiliates and Associates (as long as such communications do not become public);

(b) propose any shareholder proposals or proxy resolutions or make any proposal regarding nominees for director for approval by the Company’s stockholders,

(d) conduct any proxy solicitations with respect to the voting of Voting Securities (as defined below) against the recommendation of the Board regarding the election of directors or solicit proxies or written consents of stockholders, or any other person with the right to vote or power to give or withhold consent in respect of the Voting Securities, or conduct, encourage, participate or engage in any other type of referendum (binding or non-binding) with respect to, or from the holders of Voting Securities or any other person with the right to vote or power to give or withhold consent in respect of the Voting Securities, make, or in any way participate or engage in (other than by voting its shares of Voting Securities in a manner that does not violate this Agreement), any “solicitation” of any proxy, consent or other authority to vote any Voting Securities, with respect to any matter, or become a participant in any contested solicitation with respect to the Company, including without limitation relating to the removal or the election of directors;

(e) form or join in a partnership, limited partnership, syndicate or other group, including without limitation a group as defined under Section 13(d) of the Exchange Act, with respect to the Common Stock, or otherwise support or participate in any effort by a third party with respect to the matters set forth in Section 3, or deposit any shares of Common Stock in a voting trust or subject any shares of Common Stock to any voting agreement, other than solely with other members of the Investor Group and/or their Affiliates and Associates with respect to the shares of Common Stock now or hereafter owned by them or pursuant to this Agreement;

(f) without the prior approval of the Board contained in a written resolution of the Board, (x) either directly or indirectly for itself or its Affiliates, or in conjunction with any other person or entity in which it is or proposes to be either a principal, partner or financing source or is acting or proposes to act as broker or agent for compensation, effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in, or (y) except as set forth in the next sentence, in any way knowingly support, assist or facilitate any other person to effect or seek, offer or propose to effect, or cause or participate in, any (i) tender offer or exchange offer, merger, acquisition or other business combination involving the Company or any of its subsidiaries or affiliates; (ii) any form of business combination or acquisition or other transaction relating to a material amount of assets or securities of the Company or any of its subsidiaries or affiliates, except for lawful acquisitions of Common Stock through the market or in privately negotiated acquisitions in the normal course of business, or (iii) any form of restructuring, recapitalization or similar transaction with respect to the Company or any of its subsidiaries or affiliates.

(g) make, or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, the Company, its officers or its directors or any person who has served as an officer or director of the Company on or following the date of this Agreement: (i) in any document or report filed with or furnished to the SEC or any other governmental agency, (ii) in any press release or other publicly available format, or (iii) to any journalist or member of the media (including without limitation, in a television, radio, newspaper or magazine interview).

Notwithstanding the foregoing or anything to the contrary herein, nothing in this Agreement shall in any way limit (i) the Investor Designee’s ability to fully participate and communicate freely with the Company’s other directors and committee members; or (ii) the Investor Group’s rights as a stockholder to freely vote its securities on any matter other than with respect to the election of directors (as to which the Investor Group shall comply with the terms hereof during the Effective Period).

4. Board Policies and Procedures. The Investors agree that they shall cause the Investor Designee, and each of the Investor Designee and the that he shall, comply with all policies, processes, procedures, codes, rules, standards, and guidelines applicable to members of the Board, including, but not limited to, the Company’s Corporate Governance Guidelines, any Code of Conduct, and policies on insider trading, hedging, pledging, stock ownership, public disclosures and confidentiality as may be in effect from time to time (the “Policies”). Copies of the existing Policies are publicly available or have been delivered to the Investor Designee prior to the execution of this Agreement, which the Investors acknowledge and confirm have been delivered to the Investor Designee. The Investor Group shall provide, and shall cause the Investor Designee to provide, the Company with such information as is reasonably requested by the Company concerning the Investor Designee, in each case as promptly as necessary to enable the timely filing of the Company’s proxy statement for the 2016 Annual Meeting and other periodic reports with the SEC during the Effective Period.

5. Modifications. This Agreement may only be modified through a written agreement signed by the Company and the members of the Investor Group who are signatories hereto.

6. Due Authorization; Enforceability. This Agreement has been duly authorized by the Board and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. Upon execution and delivery by the Investor Group, this Agreement will be a valid and binding obligation of each of the members of the Investor Group, enforceable against such members in accordance with its terms.

7. Specific Performance. Each of the members of the Investor Group and the Company acknowledge and agree that irreparable harm would occur in the event any of the provision of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to specific relief hereunder, including, without limitation, an injunction or injunctions to prevent and enjoin breach of the provisions of this agreement and to enforce specifically the terms and provisions hereof in the Court of Chancery or any federal court in the State of Delaware, in addition to any other remedy to which they may be entitled at law or in equity. Any requirements for the securing or posting of any bond with such remedy are hereby waived.

8. No Impairment. Neither the Company nor the Board shall take any action to avoid or seek to avoid the observance or performance of any of the provisions required to be observed or performed by the Company or the Board under this Agreement, but shall at all times in good faith take all actions that are necessary to carry out and perform all of the provisions and purposes and intents of this Agreement.

9. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without regard to any conflict of laws provisions thereof.

10. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

11. Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by facsimile and email, when such fax and email is transmitted to the fax number set forth below and sent to the email address set forth below and the appropriate confirmation is received or (b) if given by any other means, when actually received during normal business hours at the address specified in this subsection:

if to the Company:

Iteris, Inc.

1700 Carnegie Avenue, Suite 100

Santa Ana, CA 92705

Attention: Chief Executive Officer

Facsimile: (949) 270-9401

With a copy to (which shall not constitute notice):

Morgan, Lewis & Bockius LLP

600 Anton Boulevard, Suite 1800

Costa Mesa, CA 92626

Facsimile: (714) 830-0700

Attention: Ellen S. Bancroft

if to the Investor Group:

c/o RELM Wireless Corporation

7100 Technology Drive

West Melbourne, FL 32904

Attn: Chairman of the Board

Facsimile: (321) 984-0168

and

c/o Fundamental Global Investors, LLC

4201 Congress Street, Suite 140

Charlotte, NC 28209

Attn: D. Kyle Cerminara

Facsimile: (866) 358-1546

With a copy to (which shall not constitute notice):

Thompson Hine LLP

3900 Key Center

127 Public Square

Cleveland, OH 44114

Attn: Derek D. Bork

Facsimile: (216) 566-5800

12. Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement.

13. Successors and Assigns. This Agreement shall not be assignable by any of the parties to this Agreement. This Agreement, however, shall be binding on successors of the parties hereto.

IN WITNESS WHEREOF, the following parties have executed this Agreement as of the date first above written:

“COMPANY” ITERIS, INC.

By: /s/ Joe Bergera

Joe Bergera,

Chief Executive Officer

“INVESTOR DESIGNEE” /s/ D. Kyle Cerminara

D. Kyle Cerminara,

an individual

“INVESTOR GROUP” RELM Wireless Corporation

By: /s/ David P. Storey

Print Name: David P. Storey

Title: President and Chief Executive Officer

Fundamental Global Investors, LLC

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: CEO, Partner and Manager

Fundamental Global Partners, LP

by Fundamental Global Partners GP, LLC,

its General Partner

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Partner and Manager

Fundamental Global Partners GP, LLC

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Partner and Manager

Fundamental Global Partners Master Fund, LP

by FG Partners GP, LLC, its general partner

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Manager

FG Partners GP, LLC

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Manager

FGI Global Asset Allocation Fund, Ltd.

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Director

FGI Global Asset Allocation Master Fund, LP

by FGI Global Asset Allocation GP, LLC,

its general partner

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Manager

Tactical Capital Investments LLC

By: /s/ David P. Storey

Print Name: David P. Storey

Title: Manager

Ballantyne Strong, Inc.

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Chief Executive Officer

CWA Asset Management Group, LLC

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Manager and Co-Chief Investment Officer

FGI Funds Management, LLC

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Manager

FGI International USVI, LLC

By: /s/ D. Kyle Cerminara

Print Name: D. Kyle Cerminara

Title: Manager

EXHIBIT A

Certain Definitions

The following terms shall have the meanings set forth below:

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

“Associate” has the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations of the Exchange Act.

“Beneficial Owner”. A Person shall be deemed the “Beneficial Owner” of, and to have “beneficial ownership” of, and shall be deemed to “beneficially own,” any securities as to which such Person or any of such Person’s Affiliates or Associates is or may be deemed to be the beneficial owner, directly or indirectly, pursuant to Rules 13d-3 promulgated under the Exchange Act, as such Rules are in effect on the date of this Agreement.

“Exchange Act” shall mean the Securities and Exchange Act of 1934, as amended;

“Person” or “Persons” shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature;

“Related Person” shall mean, as to any Person, any Affiliates or Associates of such Person.

“SEC” shall mean U.S. Securities and Exchange Commission; and

“Voting Securities” means the Common Stock and any other securities of the Company having the right to vote.