UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
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[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
FORGENT NETWORKS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
RED OAK PARTNERS, LLC.
THE RED OAK FUND, LP
PINNACLE FUND, LLLP
BEAR MARKET OPPORTUNITY FUND, L.P.
PINNACLE PARTNERS, LLC
DAVID SANDBERG
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER
THAN THE REGISTRANT)
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[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
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Red Oak Partners, LLC
654 Broadway, Suite 5
New York, NY 10012
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Dear Fellow Stockholders of ASUR:
We are sending you this proxy statement and the enclosed BLUE proxy card to ask
you to elect a slate of six new directors to the board of Forgent Networks, Inc.
d/b/a Asure Software (NASDAQ: ASUR).
ASUR's annual meeting is scheduled for August 28, 2009 and we ask you to support
our slate because it is time for change:
* ASUR needs new direction - ASUR's current Directors have all been with
ASUR since at least ASUR's fiscal 2003 year-end. Since that time period
and under their direct leadership, ASUR has reported a net loss in
excess of $35 million, (representing more than five times ASUR's current
market value). ASUR's stock price has declined more than 90% (from
$3.15 on July 31, 2003 to $0.17 on July 22, 2009) during that period of
time.
* ASUR states that its directors beneficially own less than 5.0% of ASUR's
common stock (almost half represented by options exercisable within 60
days of the measurement date) while our slate is composed of owners or
those suggested by owners of an excess of 20% of ASUR's common stock.
Because of their low stock ownership they have not been as impacted by
the drastic drop in ASUR's share price caused by the significant losses
incurred under their leadership. We believe better and more responsible
spending decisions will be made by a Board more closely aligned with its
shareholders through common stock (and not option) ownership.
* ASUR's unwillingness to provide transparency and full disclosure to its
shareholders suggests they do not care about shareholders' best
interests. They refused to share recent voting results and recently
refused to hold a question and answer session on their most recent
earnings call.
* In their most recent attempt to stifle criticism, ASUR filed a lawsuit
in Texas falsely claiming that Red Oak and others are seeking to control
ASUR and "liquidate all of Forgent's assets for their own immediate
short-term gain."
ASUR's board has spent recklessly and wastefully, has been unable to forecast
its business (please read the section below in the entitled "Inability of
Management to Forecast" for important detail), and recently attempted - and
failed - to take ASUR private and reduce the disclosure requirements they would
need to observe. We ask that those shareholders who are similarly outraged
discard ASUR's proxy card and instead cast a "vote for change" by returning our
BLUE proxy card and voting for our slate of Director nominees. We also ask you
to vote AGAINST the appointment of Ernst & Young as ASUR's independent auditor.
Lastly yet importantly, we encourage shareholders to review the information
about our slate of nominees included in this solicitation. We have nominated a
slate comprised of vested shareholders with significant industry success,
software expertise, ASUR product expertise (two of our nominees previously
served as directors of ASUR's iEmployee product when it was a growing and
profitable business), and financial and public company expertise. We ask you to
compare what you read about our nominees against the results you have
experienced under ASUR's Board's leadership over many years. We ask for your
support to replace ASUR's Board in its entirety.
We respectfully request your support of our nominees by signing and returning
the enclosed BLUE proxy card.
Sincerely,
David Sandberg
For Red Oak Partners
This proxy statement is dated July __, 2009 and is first being mailed to
stockholders on or about __________, 2009.
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PRELIMINARY PROXY STATEMENT
This proxy statement is being furnished to holders of the common stock of
Forgent Networks, Inc. ("ASUR" or the "Company") in connection with the
solicitation of proxies by Red Oak Partners, LLC, The Red Oak Fund, L.P.,
Pinnacle Fund, LLLP, Pinnacle Partners LLC, Bear Market Opportunity Fund, L.P.
and David Sandberg, whom we refer to collectively as "Red Oak" in this proxy
statement, to be used at the Annual Meeting of Stockholders (the "Annual
Meeting") of ASUR.
Time and Place of the Annual Meeting
The Annual Meeting is being held on August 28, 2009 at ASUR's principal
executive offices, at 108 Wild Basin Road, Austin, Texas 78746 at 1:00 p.m.
local time.
All stockholders who own shares of ASUR stock as of July 10, 2009, the
record date for the Annual Meeting, are entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof.
Voting materials, which include this Proxy Statement and a BLUE proxy
card, will be sent to some or all stockholders on or about [____________], 2009.
Stockholders who do not receive this statement and a BLUE proxy but wish to
receive them can contact MacKenzie Partners as indicated on the last page of
this Proxy Statement.
If your shares are held in the name of a brokerage firm, bank or nominee, only
that entity can vote such shares and only upon receipt of your specific
instruction. Accordingly, we urge you to contact the person responsible for your
account and instruct that person to execute the BLUE proxy card on your behalf.
YOUR VOTE IS IMPORTANT. If you agree with the reasons for Red Oak's solicitation
set forth in this Proxy Statement and believe that the election of the Red Oak
nominees to the Board of Directors can make a difference, please vote for the
election of the Red Oak nominees, no matter how many or how few shares you own.
RED OAK URGES YOU NOT TO SIGN ANY PROXY CARD THAT IS SENT TO YOU BY THE COMPANY,
EVEN AS A FORM OF PROTEST
By executing the BLUE proxy card, you will authorize us to vote FOR the election
of the Red Oak nominees. If you have already signed a proxy card sent to you by
the Company, you may revoke that proxy at any time prior to the time a vote is
taken by (i) submitting a duly executed proxy bearing a later date to the
Secretary of the Company, (ii) filing with the Secretary of the Company a later
dated written revocation or (iii) attending and voting at the Annual Meeting in
person.
The persons and entities which constitute Red Oak are described below in the
section entitled "Certain Information Regarding the Participants." This proxy
statement sometimes refers to Red Oak as "we," "us," "our" and variants of those
words.
WHY YOU WERE SENT THIS PROXY STATEMENT
You are receiving a Proxy Statement and proxy card from us because you
owned shares of ASUR common stock on July 10, 2009, the record date. This Proxy
Statement describes important issues on which we would like you, as a
stockholder, to vote. It also gives you information on these issues so you can
make an informed decision.
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When you sign the proxy card, you appoint David Sandberg and Adrian
Pertierra as your representatives at the meeting. They will vote your shares,
as you have instructed them on the proxy card, at the Annual Meeting. If you
sign and return a BLUE proxy card without giving specific voting instructions,
your shares will be voted FOR the Red Oak nominees and AGAINST the selection of
Ernst & Young. If you plan to attend the Annual Meeting we recommend that you
complete, sign, and return your proxy card in advance of the meeting just in
case your plans change. This way, your shares will be voted whether or not you
attend the Annual Meeting.
REASONS FOR THE SOLICITATION
We expect that the Red Oak nominees, if elected, would provide a new
voice and fresh perspective to the Board of Directors. We believe that the Board
of Directors should represent stockholders' perspective on ASUR's pursuit of
strategic alternatives and management direction, and generally bring focus to
the maximization of value for the benefit of stockholders. Please read the
section below titled "What Red Oak Wants" for more details on Red Oak's
recommended actions. There can be no assurances that the Red Oak nominees will
succeed in creating shareholder value.
The proposed slate of Red Oak nominees will, if elected, constitute a
majority of the Board of Directors. Red Oak believes that the Red Oak nominees,
if elected to the Board of Directors, will bring to the Board of Directors the
perspective of stockholders because all but Mr. Ferris are stockholders and all
are, or were recommended by, stockholders. This slate would represent a board
answerable to shareholders and not controlled by any party. Only two of the
Red Oak nominees are affiliated with Red Oak and the remaining nominees are
independent of both Red Oak and management.
If elected, the Red Oak nominees do not anticipate that they will have
any conflicts of interest with respect to the Company, and recognize that they
will owe fiduciary obligations to all stockholders. None of the Red Oak nominees
has any contract, arrangement or understanding with the Company, or any other
direct financial interest concerning the Company, other than through the
beneficial ownership of stock of the Company by the Red Oak nominees disclosed
in this Proxy Statement and the filings with the Securities and Exchange
Commission by Red Oak. All the Red Oak nominees satisfy the independence
requirements of Item 407 of Regulation S-K and all but Mr. Vogel meet the Item
407 criteria for serving as an audit committee financial expert either by having
actively supervised a principal financial officer or by experience in assessing
and evaluating financial statements.
PROPOSALS
We are soliciting your proxy to vote for the following proposals (the
"Proposals"), which we intend to submit for approval at the Annual Meeting:
Proposal 1: Election of Directors
At ASUR's 2009 Annual Meeting six directors will be elected for terms
expiring at the 2010 annual meeting of stockholders or until their respective
successors are duly elected or appointed and qualified. Red Oak is seeking your
support at the Annual Meeting to elect its nominees in opposition to
management's director nominees. Each of Red Oak's nominees has consented to
serve as a director of the Company if elected and each of the nominees has
consented to being named in this proxy statement. Shares represented by BLUE
proxies returned duly executed to Red Oak will be voted, unless otherwise
specified, FOR the election of the six nominees named below.
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RED OAK'S NOMINEES FOR DIRECTOR
CORNELIUS (NEIL) FERRIS, 63, is an active advisor and executive consultant to
technology companies and venture capital investors and has been engaged in such
as his principal activity for the last 5 years. Prior to his current
assignments, he was CEO of Giganet, a storage networking company which he sold
to Emulex for $650 million in 2001. His previous CEO roles included Open Data
which was sold to a private company in 1997 and Fluent, a multimedia software
company, which was sold to Novell in 1993. Mr. Ferrris was part of the founding
team and vice president of Apollo Computer, which enjoyed a successful IPO and
was sold to Hewlett Packard in 1989 for $476 million. Prior to that, Mr. Ferris
served for ten years in senior management positions with Data General which he
joined shortly after its formation. He is also a board member of Enfora,
Intersense, and BTI Systems corporations. Mr. Ferris holds MBA and BS degrees
from Northeastern University.
BOB GRAHAM, 60, has been a Partner at Ridge Partners LLC, a consulting and
investment firm, since 2002. He is also the Senior Technology Advisor to
Cascadia Capital, a mid market M&A firm. In addition, Mr. Graham is the Manager
of Global Accelerator LLC, a Fund that originally invested in iEmployee and
still holds shares in ASUR. Previously, Mr. Graham held key executive roles
including Group Manager at Digital Equipment Corporation and Executive Vice
President and Division President at Sun Microsystems. He was a Co-Founder and
Chief Operating Officer at Manufacturer's Services Limited, the Chairman & CEO
of Ridge Technologies, and President at Adaptec. Mr. Graham was also
instrumental in the founding and exit of a number of technology companies
including Crag Systems and iEmployee, where he served on the Board of Directors
prior to its acquisition by ASUR. He presently serves on the boards of Global
Accelerator Management and 54th Street Systems.
PAT GOEPEL, 47, has over 20 years of progressive leadership positions in the HR
outsourcing industry. A frequent speaker and industry expert, Pat currently
serves (since 2008) as the COO of Patersons Global Payroll and oversees its
human relations function. Previously, he was the President and CEO of Fidelity
Investment's HR Services Division from 2006-2008, President and CEO of Advantec
from 2005-2006 and served as the Executive Vice President of Business
Development and US Operations at Ceridian from 1994 until 2005. A former board
member of iEmployee, he currently serves on the boards of Patersons and Allover
Media.
ADRIAN PERTIERRA, 37, is a Senior Analyst at Red Oak Partners, LLC, a NY-based
hedge fund. Prior to joining Red Oak in 2007, Mr. Pertierra served as Vice
President of Global Markets at Deutsche Bank Alternative Trading in 2007 and
worked at Tradition Asiel Securities, Inc. from 2006-2007. Previously, Mr.
Pertierra served as the Vice President of Institutional Equity Sales and Trading
at BGC Partners, LP, from 2002-2006. Mr. Pertierra received a BA in Economics
from the College of Holy Cross.
DAVID SANDBERG, 36, is a managing member, founder, and portfolio manager of Red
Oak Partners, LLC, a NY-based hedge fund, since its March 2003 inception.
Previously, Mr. Sandberg co-managed JH Whitney & Co's Green River Fund from
1998-2002. Mr. Sandberg received a BA in Economics and a BS in Industrial
Management from Carnegie Mellon University. He presently serves on the Board of
SMTC Corp. and was elected a director of EDCI Holdings, Inc. on June 1, 2009.
JEFFREY VOGEL, 41, has 20 years experience in operating, financing, and advising
companies - primarily high-tech software companies. Since 2008 Mr. Vogel has
been a Partner with Liberty Capital Partners. Additionally, Mr. Vogel has and
continues to serve as a Managing Director of Velocity Equity Partners, a $50
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million early stage technology fund, since he co-founded it in 2001. Prior to
co-founding Velocity, Mr. Vogel was Chief Technology Officer and Vice President
of Research and Development for eBusiness Technologies, a leader in XML Content
Management Systems, where he led a team of 100 software professionals. In 1989,
Mr. Vogel co-founded Electronic Book Technologies (EBT), a pioneer in SGML and
XML information systems. At EBT Jeff led R&D until 1996 when he helped sell the
company to Inso, a publicly traded company. From 1996 to 1998, Mr. Vogel was
Vice President of Engineering at Inso's Electronic Publishing Solutions business
unit and was also very active in the company's corporate development activities
where he helped acquire and integrate a half dozen acquisitions. Mr. Vogel
graduated from Brown University in 1990 with degrees in Economics and Computer
Science. Mr. Vogel serves on the Boards of Rent Marketer, BEZ, and Dynadec.
The number of shares of the Company's common stock beneficially owned by
and the percentage beneficial ownership of each of Red Oak's nominees as of the
date of this proxy statement are set forth on Exhibit A to this Proxy Statement.
Red Oak beneficially owns an aggregate of 3,201,523 shares of ASUR's total
outstanding common stock. Red Oak believes it is ASUR's largest stockholder. Red
Oak owns approximately 10.3% of ASUR's total outstanding common stock based on
the Company's statement that as of July 15, 2009 there were 31,107,273 shares
outstanding and 10.6% of the common stock held by the public (namely, the common
stock held by stockholders other than the board and management).
If elected, the Red Oak nominees would be responsible for managing the
business and affairs of the Company. The Red Oak nominees understand that, as
directors of the Company, each of them has an obligation under Delaware law to
scrupulously observe his duty of care and duty of loyalty to the Company and all
of its stockholders, not just those nominating him.
WE STRONGLY RECOMMEND THAT YOU VOTE "FOR" THE ELECTION
OF THE RED OAK NOMINEES
Proposal 2: Ratification of Selection of Independent Registered
Public Accounting Firm
According to the Company's proxy statement, at the Annual Meeting a vote
will be held to ratify the selection of Ernst & Young LLP as the Company's
independent registered public accounting firm for the fiscal year ended July 31,
2009. The affirmative vote of a majority of the shares of Common Stock present
at the Annual Meeting in person or by proxy is necessary to ratify Ernst & Young
LLP's appointment. The Company's proxy statement notes that "Stockholder
ratification is not required for the selection of Ernst & Young LLP, since the
Audit Committee has the responsibility for the selection of the Company's
independent auditors. Nonetheless, the selection is being submitted for
ratification at the Annual Meeting solely with a view toward soliciting the
stockholders' opinion thereon, which opinion will be taken into consideration in
future deliberations." As the Company proxy points out, the vote of
stockholders will not be binding on the Company. Red Oak objects to the
ratification of Ernst & Young LLP as the Company's independent registered public
accounting firm as it believes that ASUR may obtain the services of skilled
accountants at a non "tier one" firm for substantially less than the amounts
paid Ernst & Young. Red Oak believes this, even though it has not obtained a
quotation for services to ASUR, because its discussions with smaller accounting
firms suggest their rates are lower. Because the Annual Meeting is being held
after the end of ASUR's fiscal year, it may not be economical for 2009 to change
accounting firms if work has commenced. If you sign and return a BLUE proxy
card but do not indicate how your shares should be voted, your shares will be
voted AGAINST the ratification of Ernst & Young as auditors.
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WE ARE SEEKING TO ELECT NEW DIRECTORS BECAUSE:
Red Oak does not believe that the current board of directors of ASUR has
adequately served in the best interests of ASUR, based in part on the factors
described below, and its unaffiliated stockholders and believes change is
needed.
* ASUR has lost over $35 million since 2003 while the current Board has
been in place (except for Ms. Harris who was named to the Board last
month).
* Since Mr. Snyder, the current chairman, joined the board in December
1997, (with the support of all the members of the current Board, except
Ms. Harris), ASUR's stock has dropped 97% (from $6.13 at December 31,
1997 to $0.17 at July 22, 2009).
* The current Board allows what we view as wasteful spending (in our view
$360,000 per year on D&O insurance is excessive) and recently embarked
on an expensive campaign to take ASUR private and reduce the information
it is required to provide stockholders while not disclosing the amount
it spent on this failed effort.
* The incumbent Board has kept in place a management team that has
repeatedly been unable to meet its own forecasts.
* The incumbent Board and management have ignored shareholder concerns and
limited discussion with holders.
* We believe a new board, strongly aligned with stockholder interests by
share ownership, should be elected.
A History of Losses
Under Richard Snyder's tenure as CEO, ASUR spent in excess of $65 million on
selling, general and administrative (SG&A) costs and research and development
(R&D) costs since 2003 while reporting aggregate net losses in excess of $35
million during that same time period. This large negative return on investment
is across a multi-year time span. Recent results have been no better, having
already come in below late 2008 forecasts. Despite this negative return and
disappointing recent results, the spending has continued unabated with nearly
$14 million in SG&A plus R&D spent in the past twelve months, a full $2.5
million above the Company's entire reported revenues during that same time
period. Management has repeatedly claimed and promised it is building a
platform for a $20, $40, and $50 million revenue company. These claims have
been met with material failure in almost all instances. At this point Red Oak
believes these claims should be disregarded entirely.
ASUR's stock price is 97% lower today than when Mr. Snyder first joined the
Board in 1997.
We believe that the incumbent Board has destroyed shareholder value by
permitting excessive spending including excessive service provider costs,
excessive management and employee compensation and generous benefits and we
believe they will continue to destroy shareholder value if they are again
elected to ASUR's Board. Even Mr. Snyder's statement on April 27, 2009 that he
would resign has not been honored. He remains as "executive" chair and has a
"parachute" contract with terms which were not publicly disclosed until after
the failed go-private vote.
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Inability of Management to Forecast
We do not believe that senior management is able to forecast its business with
any semblance of accuracy and this has cost shareholders as management and the
board have made spending decisions based on their incorrect forecasts. Mr.
Snyder and Mr. Peterson have repeatedly stated that the Company is spending in
order to grow and that they believe ASUR can be a $30-40 million revenue company
in just a few years. Management has repeatedly promised impressive
results and failed to deliver. At this point Red Oak believes it unwise to
trust shareholder equity to Management and the incumbent Board's direction. For
perspective, we include examples across many years' forecasts during ASUR's
earning calls as opposed to just a few:
* In ASUR's Q4, 2003 earnings conference call, Chief Financial Officer Jay
Peterson indicated that ASUR believed it could achieve $40-50 million in
annual software revenues in three to four years "based on early optimism
from large enterprise customers and assuming just a little help from the
economy." Although the economy offered significant help from late 2003
through the next three to four years, ASUR's software revenues are and
were well under even $20 million (let alone $40-50 million), inclusive
of the revenue acquired in 2007 by buying iEmployee, which, according to
ASUR's amended 10-K for the fiscal year ended July 31, 2008, generated
more than $5.3 million in revenues from August 1, 2006 through July 31,
2007.
* In ASUR's Q1, 2004 conference call, CEO Richard Snyder reaffirmed "our
previous guidance of 6 to $7 million in software revenue for this
current fiscal year." In contrast, ASUR generated just $3 million
in software revenue in fiscal 2004 despite help from a very strong
economy. Additionally, in the same call Mr. Snyder reaffirmed "between
$40 to $50 million in annual software revenues in the next three to four
years." He also added that "we believe that we can manage expenses to
be flat, while also expending approximately $300,000 on Sarbanes Oxley
related requirements over the next several quarters." Expenses
increased from $16 million to $23 million from 2003 to 2004.
* In ASUR's Q1, 2006 call, Jay Peterson claimed that "we have line of site
to EBITDA profitability this fiscal year." 2006 reported EBITDA was
negative $3.9 million, again despite a strong year in the economy. In
the same call, Richard Snyder claimed "we'll continue to look at a
dividend or perhaps a stock buyback, and after that, we'll continue to
look at the ability to invest some of that for the growth of our
software business." No share repurchases or cash dividend were ever
effected after this date yet the Company continued a substantial cash
spend, followed by an acquisition which cost ASUR more than 2x its
current market capitalization.
* In ASUR's Q2, 2006 call, Mr. Snyder stated "with regard to expenses as
we mentioned, this is the lowest, we've gotten the expenses down to
the lowest point, really, in the Company's history, minus depreciation,
and we believe that there is still room to continue to scrutinize those
expenses and get them down." For reference, expenses never went lower
than that quarter.
* In ASUR's Q4, 2007 call, Mr. Peterson claimed "our overall spending
excluding iEmployee will significantly decrease due to the conclusion of
the 746 trial" and that "we believe we will generate $12 million in
revenue this year and will generate cash in the second half of this
fiscal year." Operating expenses declined for only one quarter before
increasing materially every quarter thereafter. The Company generated
just $10 million in revenue (nearly 20% below its forecast), and the
Company burned $2.7 million in operating cash flow in the second half
of the fiscal year as opposed to generating cash.
* In ASUR's Q1, 2008 call, Mr. Peterson confirmed "we believe we will
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generate $12 million in revenue this year." ASUR generated just $10mm in
revenues in 2008. He also claimed "we have line of site to EBITDA
profitability this fiscal year." ASUR reported a $5 million EBITDA loss
for fiscal 2008.
* In the same Q1, 2008 call, Mr. Snyder stated "I think your $20 million
figure for 2009 is certainly one we have on the books." Based on the
latest 10-Q, 2009 revenues are running at approximately 50% of this
estimate.
* In ASUR's Q3, 2008 call, Mr. Peterson claimed "we plan on generating
cash, that is EBITDA profitability in fiscal year 2009." The
operating loss through the first three quarters of FY 2009 is nearly $5
million.
* In ASUR's Q1, 2009 call, Mr. Peterson indicated "we were "anticipating
or planning to be EBITDA profitable in our July quarter of this year."
For reference, ASUR reported a $1.4 million operating loss in its April
quarter and claimed they would be EBITDA breakeven by the end of the
year, not profitable. During an April 27 meeting, when Red Oak asked
them to explain their $5.5 million run-rate loss if - as they claimed -
both software businesses were breakeven to profitable on their own and
there were $1 million in excess costs, ASUR's CFO Jay Peterson could not
explain a $3-4 million/year discrepancy, nor could CEO Richard Snyder
nor either of ASUR's directors present at the meeting. Specifically,
they are currently losing $5.5mm/year on a run-rate basis according to
the last financial information released.
* In ASUR's Q2, 2009 call, ASUR's CFO Jay Peterson stated that $3 million
per quarter in revenues would equate to EBITDA breakeven. However, in
ASUR's Q3, 2009 earnings, ASUR reported $2.4 million in revenue and a
$1.2 million EBITDA loss, or $4.8 million annualized. With ASUR earning
under 80% in gross margin, an additional $600,000 in revenues (to reach
$3 million per quarter) would have added roughly $480,000 in gross
margin per quarter. Even assuming no added sales commission expenses
and that ASUR could eliminate $1 million in public company costs (as
management claimed it would during their failed go-private effort), ASUR
would report an excess of $3.3 million in annual EBITDA loss.
ASUR's forecasts have continually been wrong, and cash continues to decline at a
rapid rate reflecting the true losses management is generating, including a $1
million cash burn in the most recent April 2009 quarter. Yet the incumbent
board has announced no action to reverse these trends.
Board Not Aligned with Holders
We believe it's in shareholder's best interests to be represented by Board
members who own significant amounts of stock and thus share more directly in the
results of their decisions. ASUR's Directors have all served with the Board or
Company since at least 2003, but collectively own less than 5% of ASUR's common
shares outstanding according to the Company's proxy, about half of which is
comprised of unexercised options. Under the incumbent Board's control,
shareholders have suffered a 90% decline in ASUR's share price while the Company
has burned tens of millions of dollars in cash. ASUR's insiders have made key
decisions which have impacted shareholders' wallets while having far less impact
on their own wallets because of their low stock ownership.
In stark contrast to management's slate of nominees, our slate directly owns
nearly 15% of ASUR's shares outstanding and three of our nominees (Bob Graham,
Pat Goepel, and Jeffrey Vogel) have been directly referred by holders of another
10%+ of ASUR's common shares outstanding. Mr. Ferris does not currently own any
shares. We believe our slate also possesses materially greater industry
success, public company experience, and knowledge of ASUR's own products as two
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of our nominees previously served on the Board of ASUR's iEmployee division when
it was an independent and profitable company (before ASUR acquired it in 2007).
We note that ASUR stated in its December 12, 2007 report on Form 10-Q that
"iEmployee is a profitable business with a high percentage of recurring revenues
and delivers its software as a service under the "SaaS" model. The acquisition
expands Forgent's current target markets, significantly augments the Company's
product and service offerings to customers, and increases revenues from its
software and services segment considerably. Due to these factors, the Company
purchased the iEmployee business at a premium (i.e. goodwill) over the fair
value of the net assets acquired."
A Team We Should Not Trust
ASUR's incumbent board continues to reward a management team that misses its
forecasts. In fact the board repriced options twice, first in September 2005 to
$1.42 share, then in August 2006 to $0.385/share. Importantly, ASUR's chairman
benefited directly from this repricing as he also served as ASUR's CEO and
continues to serve as executive chairman (ASUR's newly appointed director Nancy
Harris also benefited from this repricing as she was ASUR's COO at the time).
Moreover, ASUR recently refused to provide information we believe shareholders
have a right to know:
* how much they spent in the failed go-private proxy contest;
* the final vote tallies regarding the go-private vote. ASUR board
member Mazzuchelli has claimed that our reported numbers are
inaccurate, even though we received them from the same firm which
provides ASUR with their non-objecting beneficial holder vote
information (which represents more than 90% of all ASUR shares
outstanding). Despite this claim, ASUR has refused to share the vote
tally;
* on June 18, ASUR failed to allow questions to be asked on the earnings
call. They were informed of this immediately but have done nothing to
rectify this; and
* Although after repeated prodding ASUR to disclose information
about amounts spent for executive visits to the Cooper Clinic and
compensation for Mr. Snyder's son, they still have not disclosed all of
the information requested.
Mr. Snyder and our incumbent Board personally pat ASUR on the back for upholding
"the highest corporate governance standards" in ASUR's June 18 press release.
However, shareholders should note:
1. the board elected non-independent Nancy Harris to replace
resigning independent director Kathleen Cote
2. Mr. Snyder resigned as CEO but remained executive chairman
3. Mr. Snyder, Mr. Peterson and Ms. Harris have change of control
agreements, which in the case of Mr. Snyder and Mr. Peterson
were not explicitly disclosed until the Company's July 17, 2009
proxy statement.
4. ASUR refused to respond to shareholders inability to ask
questions on an earnings call despite being informed of this
immediately and repeatedly, let alone correcting this and
opening a new call - it appears ASUR does not want shareholders
asking them tough questions.
WHAT RED OAK WANTS
Red Oak believes that the Company has value and that a Board comprised of our
slate of vested, experienced Directors is more capable of creating shareholder
value. We also believe costs need to be adjusted now, and not when another $10
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million has been burned through wasteful spending. The first step in this is to
NOT re-appoint Ernst & Young as ASUR's independent auditors because we believe
ASUR has paid more than it should have already in audit fees and that accepting
them as auditors supports the types of spending decisions which have
contributed to ASUR's 97% price decline since ASUR's Chairman Richard Snyder
first joined its Board.
Red Oak met and spoke with certain members of ASUR's senior management and the
Board of the Company several times during 2009. During those discussions, we
made the following recommendations on ways for ASUR to enhance shareholder
value:
* all company expenses and costs across all employees, by location and
product (Netsimplicity vs. iEmployee)
* all costs not related directly to Netsimplicity and iEmployee products,
i.e. public costs
* all legal liability related to the $3 million liability and suit ASUR
has disclosed
* the $5 million lease obligation and structure for ASUR's 50% equity
ownership in its headquarters building
* ability to use tax loss carryforwards per rule 382 IRS calculation
* all costs related to legal providers
* all costs related to ASUR's audit
* all costs related to added employee benefits, including for senior
executives
* all severance and change of control packages and liabilities
* the D&O policy for purposes of drastically reducing it
* all consulting fees and agreements related to insiders or board members
* consideration to implement a reverse split to regain NASDAQ compliance
* consideration to implement a share repurchase program of $5 million
Red Oak previously expressed these goals in its opposition to the go-private
scheme and expressed that it would expect this review to produce material
reductions in headcount, compensation, insurance costs, and provider costs to
ASUR's management. Red Oak would hold only two board seats if its slate is
elected and could not control the board, but would recommend these actions
listed above to the Board. ASUR's management has not commented on this agenda
and has repeatedly, and we believe incorrectly, claimed that Red Oak has not
offered alternative solutions to enhance shareholder value.
BACKGROUND OF THIS SOLICITATION
Red Oak began to invest in ASUR in 2008. After Red Oak made comments on ASUR's
December 2008 earnings call, several investors contacted Red Oak to exchange
information. One of these investors introduced Red Oak to Mr. James Gladney,
and to Mr. Fenil Shah. Red Oak and the shareholders that contacted Red Oak
shared information and concerns regarding the management of ASUR. Not
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surprisingly, many of the concerns identified by the other shareholders
regarding ASUR were shared by Red Oak, and vice versa. After ASUR announced its
plan to go private, additional discussions were held with the same shareholders.
Again, the other shareholders and Red Oak shared many of the same concerns.
While Red Oak was aware of the concerns, Red Oak had not yet determined to
formally oppose the go private effort or take other actions. Moreover, at no
time did Red Oak agree, by words or conduct, to be part of or act as a group
with any other shareholders.
On April 17, 2009, Red Oak sent a letter to one of the Company's directors, Lou
Mazzuchelli, expressing concern about the Company's proposal to end its public
reporting status and what Red Oak viewed as excessive costs, and stating an
intent to nominate a slate of directors at the next annual meeting, and asked
this director to discuss the letter with the other directors. Mr. Gladney
assisted Red Oak to contact Mr. Mazzuchelli, because Red Oak had learned that
Mr. Gladney knew Mr. Mazzuchelli and was currently helping Mr. Mazzuchelli with
a job search. This assistance began when Red Oak was still in the process of
forming its opinions and investigating the Company's reasons for going private,
and Mr. Gladney served as an informational conduit. However, because of the
relationship between Mr. Gladney and Mr. Mazzuchelli, Red Oak requested that Mr.
Gladney review the April 17, 2009 letter before it was sent, which Mr. Gladney
did. On April 22, 2009, Mr. Snyder telephoned Red Oak and an informal meeting
was arranged for April 27, 2009 in Dallas. Red Oak invited all stockholders of
whom it was aware to attend this meeting, which was planned as an information
session. Only two of ASUR's independent directors attended and both ASUR's CEO
and CFO showed up at least one hour late. At the April 27, 2009 meeting, Red
Oak asked questions about the Company's expenditures, questioned the level of
spending on items such as audit and legal fees, and questioned the proposed
savings from the proposal to "go private." The April 27, 2009 meeting was
attended by three other holders of company stock, but those holders were not
asked to join Red Oak in this solicitation.
All three proposals related to the "going private plan" were rejected by
shareholders. The information available to Red Oak indicates the negative vote
was at least 52%. Red Oak notes that the information available to it does not
include actual votes at the special meeting, because that meeting was cancelled,
and that until an actual vote at a meeting was conducted, any proxy could have
been changed or revoked. Accordingly, the actual vote, if the special meeting
had been held, could have been higher or lower. On June 1, when the Company
canceled its special meeting set for June 2, 2009, the Company announced that it
would hold its Annual Meeting on July 30, 2009, which has since changed to
August 28, 2009. From June 3, 2009 to June 13, 2009, Mr. Sandberg, with help
from ASUR stockholder James Gladney, tried without success to set up a meeting
with the incumbent board.
On June 18, 2009, ASUR held its earnings call. No questions were asked on the
call. On June 19, 2009, Mr. Sandberg asked why shareholders were not allowed to
ask questions on the June 18, 2009 earnings call and informed ASUR that Red Oak
knew of at least six individuals who tried and were unable to ask questions
(only one of which was affiliated with Red Oak). No one at ASUR responded to
this communication. In a press release dated July 16, 2009, ASUR stated: "our
long-time policy is to take questions from analysts and registered brokers only.
Private investors are not and never have been eligible to ask questions on our
earnings calls." This appears inconsistent with actual practice. Mr. Antoine
Tristani made comments on the March 12, 2008 call, the October 15, 2008 call and
the December 16, 2008 call, and Mr. David Sandberg made comments on December 16,
2008. In none of these instances did the Company request verification that the
caller was a broker or an analyst. Mr. Antoine Tristani, who had commented in
the past, was not allowed to comment on the June 18, 2009 call.
-13-
Lawsuit Filed by ASUR
After Red Oak made public its attempts to obtain information, ASUR issued a
press release on June 30 attacking Red Oak and alleging an attempt to take over
ASUR was in progress. On July 1, 2009, ASUR announced it had filed litigation
in federal court in Austin, Texas alleging Red Oak and others of securities law
violations. In this lawsuit, ASUR claims Red Oak and others have
"conspired...to thwart Forgent's efforts to go private; to effect a hostile
takeover of Forgent; to replace Forgent's Board of Directors (the "Board") and
to liquidate all of Forgent's assets for their own immediate short-term gain."
ASUR claims that the other members of this "conspiracy" are James Gladney,
Robert Graham, Antoine Tristani, Pat Goepel, Fenil Shah, Sarla Software LLC,
Chimanlal Shah, Falguni Shah, Ruchir Shah, Snehal Shah, Vibha Shah and Ushma
Shah.
Red Oak denies that such parties constitute a "group" with it under federal
securities laws. Red Oak is a group - but solely with Pinnacle and Bear Market
Opportunity Fund. Red Oak has properly disclosed this group from the outset in
all of its SEC filings. However, Red Oak is not a group with anyone else. Red
Oak acknowledges that it has communicated with other shareholders regarding its
concerns about ASUR and its management, and also acknowledges that many of those
shareholders confirmed in those communications that they shared the same
concerns. However, Red Oak has made its own decisions at all times, has no
written or verbal or economic agreements with any other persons or entities, and
is acting independent of other shareholders. To this end, when Red Oak asked
ASUR to meet and to discuss key concerns, Red Oak invited all shareholders it
knew of to meet with management on April 27, 2009 (despite knowledge that some
shareholders it invited - such as Antoine Tristani - seemed to agree with
management and did not seem to agree with Red Oak's concerns about ASUR's costs
and management). When Red Oak decided to solicit proxies to oppose a go private
transaction which Red Oak believed was bad for the value of its ASUR shares, Red
Oak based this decision on its independent belief that other shareholders of
more than 750 shares would feel similarly because such shareholders would
witness small shareholders paid out at 2x ASUR's stock price while they and
other remaining holders would be left with stock which would likely trade more
thinly and with wider spreads after being de-listed and under a management team
no longer subject to SEC scrutiny or regular financial reporting despite a
history of losses, missed guidance, repriced options, and poor governance. Red
Oak did not need to work with anyone else to believe this nor to act on it.
Following this, Red Oak asked shareholders for referrals to qualified potential
board candidates but rejected several of these referrals and independently chose
only those nominees it believed were most qualified. This decision was made
solely by Red Oak - in fact Red Oak did not ask any other entity whether it was
acceptable to nominate Red Oak employees to its slate - it simply did so.
Despite an attempt to balance strong shareholder representation on its slate of
nominees with the qualifications of its candidates, Red Oak made all decisions
and leaves it up to shareholders to decide who to vote for. Lastly, Red Oak
never purchased stock in conjunction with other shareholders, never bought stock
directly or knowingly from the other shareholders claimed to be part of its
"group", and never made any agreement to split costs with other investors or
shareholders. As noted above, Mr. James Gladney assisted Red Oak to contact
director Lou Mazuchelli, but neither he nor any other shareholder approved Red
Oak's slate nor Red Oak's reasons for requesting proxies.
Red Oak also denies any "conspiracy" or scheme to liquidate the ASUR assets,
noting that when ASUR first suggested such a goal on Red Oak's part, and Red Oak
denied it, as even ASUR's complaint admits. ASUR also alleges that Red Oak and
others constitute a "group" because others made comments similar to those
expressed by Red Oak in opposition to ASUR's go-private scheme and because Mr.
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Gladney assisted in contacting ASUR's director Lou Mazzuchelli. While Red Oak
has discussed ASUR's poor performance with others, and has asked Mr. Gladney to
pass information along to ASUR Director Lou Mazzuchelli (who Mr. Gladney was
assisting in a job search and who agreed to pass such information along), it has
made its own decisions at all relevant times. Red Oak finds its unremarkable
that elements of Red Oak's public statements in press releases were repeated by
others, because Red Oak believes many other shareholders agree with those
opinions. In fact, Red Oak did not even advise all of its nominees who the
other nominees were before it announced its slate. While Red Oak has confirmed
that its nominees generally share Red Oak's "cost-cutting" philosophy and
conservative fiscal approach to management of companies of ASUR's type and size,
Red Oak has no commitments from or understandings with its nominees about how
they will vote if elected. Red Oak regards the expenses of this litigation as
another indication of how far the incumbent board will go in using shareholders'
money to entrench itself. Red Oak denies that it has violated securities laws,
and points out that if its entire slate of nominees is elected, it will hold
only two board seats, because its nominees are independent of Red Oak. Red Oak
will vigorously defend ASUR's lawsuit, which we regard as an attempt to silence
criticism of the Board.
Although Red Oak denies that it formed a "group" or sought to sell ASUR as an
"asset play," on July 13, 2009 Red Oak sent ASUR a letter designed to assure the
Board and management there is and never was any goal to liquidate the Company.
Red Oak offered to refrain from additional share purchases, not to propose a
liquidation, and for a period of three years, if a liquidation is proposed by
others, to vote its shares in the same manner as a majority of the shares held
by others are voted. Since Red Oak denies it ever had an intent to treat ASUR
as an "asset play" it is willing to make such an agreement if management will
stop spending stockholder money to prevent something Red Oak does not want to
do. Red Oak continues to believe that a new board, aligned with stockholders by
share ownership and not controlled by Red Oak or anyone else, is in
stockholders' best interest. Red Oak believes that the Company's rejection of
this proposal indicates that the Company does not view its own claims as
serious.
PARTICIPANTS
The following are, under SEC rules, participants in this solicitation of proxies
from the Company's stockholders in connection with the upcoming election of the
Company's Board of Directors: Red Oak Partners, LLC, The Red Oak Fund, L.P.,
Pinnacle Fund, LLLP, Pinnacle Partners LLC, Bear Market Opportunity Fund, L.P.
and David Sandberg and each of the Red Oak nominees. The business addresses and
ownership of Company securities with respect to each of the participants is
provided in Exhibit A hereto. Transactions in Company securities by the
participants are described on Exhibit B hereto. Other than as set forth in this
Proxy Statement, including the exhibits hereto, none of the participants have
any substantial interest, direct or indirect, in the matters to be voted on at
the Annual Meeting.
Although Red Oak asked Mr. James Gladney, Mr. Fenil Shah and other stockholders
to serve as or to suggest nominees, Red Oak made its own decisions about whom to
nominate and did not accept all the recommendations made or nominate everyone it
contacted. Accordingly, Red Oak does not regard Mr. Shah or Mr. Gladney as a
participant in its solicitation although Red Oak's nominees are participants
because they have agreed to be nominated. Red Oak points out that no nominee
has, as yet, agreed to vote for the other nominees and Red Oak did not seek or
obtain the comments of any nominee, or any other party named in ASUR's lawsuit,
on any portion of these proxy materials except such nominee's personal
information.
-15-
VOTING INFORMATION AND PROCEDURES
Who Can Vote at the Annual Meeting
The record date for determining stockholders entitled to notice of and to vote
at the Annual Meeting is July 10, 2009 (the "Record Date"). Stockholders of the
Company as of the Record Date are entitled to one vote at the Annual Meeting for
each share of common stock of the Company, $0.01 par value per share (the
"Common Stock"), held on the Record Date. The Company stated in its proxy
statement that as of July 15, 2009 it had 31,107,273 shares of Common Stock
issued and outstanding as of the Record Date.
How to Vote
You may vote by mail, telephone or Internet.
You may vote by mail by signing your BLUE proxy card and returning it in the
enclosed, prepaid and addressed envelope. If you mark your voting instructions
on the proxy card, your shares will be voted as you instruct. If you sign and
return a BLUE proxy card but do not make any specific choices, your shares will
be voted FOR the election of the Red Oak nominees and AGAINST the ratification
of Ernst & Young as auditors. You may also vote by telephone or Internet by
following the instructions on your BLUE proxy card.
You may vote in person at the meeting.
We will ask the Company to pass out written ballots to anyone who wants to vote
at the meeting. If you hold your shares in street name, you must request a
legal proxy from your stockbroker in order to vote at the meeting. Holding
shares in "street name" means your shares of stock are held in an account by
your stockbroker, bank, or other nominee, and the stock certificates and record
ownership are not in your name. If your shares are held in "street name" and you
wish to attend the Annual Meeting, you must notify your broker, bank, or other
nominee and obtain the proper documentation to vote your shares at the Annual
Meeting.
If any of your shares are held in the name of a brokerage firm, bank, bank
nominee or other institution on the record date, only that entity can vote your
shares and only upon its receipt of your specific instructions. Accordingly,
please contact the person responsible for your account at such entity and
instruct that person to execute and return our proxy card on your behalf
indicating a vote FOR our Nominees in Proposal 1 and AGAINST ratification of the
appointment of Ernst & Young as ASUR's independent auditor in Proposal 2. You
should also sign, date and mail the voting instruction form your broker or
banker sends you when you receive it (or, if applicable, vote by following the
instructions supplied to you by your bank or brokerage firm, including voting by
telephone or via the Internet). Please do this for each account you maintain to
ensure that all of your shares are voted.
A large number of banks and brokerage firms are participating in a program that
allows eligible stockholders to vote by telephone or via the Internet. If your
bank or brokerage firm is participating in the telephone voting program or
Internet voting program, then such bank or brokerage firm will provide you with
instructions for voting by telephone or the Internet on the voting form.
Telephone and Internet voting procedures, if available through your bank or
brokerage firm, are designed to authenticate your identity to allow you to give
your voting instructions and to confirm that your instructions have been
properly recorded to vote FOR our Nominees in Proposal 1 and AGAINST
ratification of the appointment of Ernst & Young as ASUR's independent auditor
-16-
in Proposal 2. Stockholders voting via the Internet should understand that there
might be costs that they must bear associated with electronic access, such as
usage charges from Internet access providers and telephone companies. If your
bank or brokerage firm does not provide you with a voting form, but you instead
receive our proxy card, you should mark the proxy card to indicate a vote FOR
our Nominees in Proposal 1 and AGAINST ratification of the appointment of Ernst
& Young as ASUR's independent auditor in Proposal 2, date it and sign it, and
return it in the provided envelope.
Revocability of Proxies
Any proxy may be revoked by you at any time prior to the time a vote is taken by
delivering to the Secretary of the Company a notice of revocation bearing a
later date, by delivering a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person.
Holders who used Internet or telephone voting procedures can follow the
revocation procedures specified on the Internet voting site or via the telephone
voting program. Holders whose shares are held through a broker in "street name"
can instruct the broker to change or revoke any instructions previously given
for voting their shares. Holders who wish assistance in contacting the Company
or their broker can contact MacKenzie Partners, Inc. ("MacKenzie Partners") at
(800) 322-2885 (toll free) or (212) 929-5500 (collect).
Only holders of record as of the close of business on the Record Date will be
entitled to vote at the Annual Meeting. If you were a stockholder of record on
the Record Date, you will retain your voting rights for the Annual Meeting even
if you sell your shares after the Record Date. Accordingly, it is important that
you vote the shares held by you on the Record Date, or grant a proxy to vote
such shares, even if you sell such shares after the Record Date.
ALTHOUGH YOU MAY VOTE MORE THAN ONCE, ONLY ONE PROXY WILL BE COUNTED AT THE
ANNUAL MEETING, AND THAT WILL BE YOUR LATEST-DATED, VALIDLY EXECUTED PROXY
Quorum Requirement
The presence, in person or by proxy, of a majority of the shares of Common Stock
outstanding entitled to vote as of the Record Date at the Annual Meeting must be
present to constitute a quorum. If you return valid proxy instructions or attend
the meeting in person, your shares will be counted for purposes of determining
whether there is a quorum, even if you abstain from voting or withhold your
votes. Broker non-votes also will be counted for purposes for determining the
existence of a quorum. A broker non-vote occurs when a broker, bank or other
nominee holding shares for a beneficial owner does not vote on a particular
proposal because the broker, bank or other nominee does not have discretionary
voting power with respect to that item and has not received voting instructions
from the beneficial owner.
Required Vote
With respect to Proposal 1 and assuming a quorum is present, the six nominees,
whether nominated by management or Red Oak, receiving the highest number of
votes will be elected as directors. Stockholders do not have the right to
cumulate votes and must either vote in favor or withhold voting for nominees.
Broker non-votes will have no effect on the outcome of Proposal 1.
With respect to Proposal 2 and assuming a quorum is present, ratification of
ASUR's appointment of Ernst & Young LLP as the Company's independent auditors
requires approval by a majority of votes present in person or by proxy at the
-17-
Annual Meeting. Abstentions may be specified and will count as a vote against
Proposal 2. Broker non-votes will be not be deemed to count either for or
against Proposal 2.
Appraisal Rights
The Company's stockholders have no appraisal rights under Delaware General
Corporation Law in connection with the Annual Meeting.
Solicitation
The entire expense of preparing and mailing this Proxy Statement and any other
soliciting material and the total expenditures relating to the solicitation of
proxies (including, without limitation, costs, if any, related to advertising,
printing, fees of attorneys, financial advisors, solicitors, accountants, public
relations, transportation and litigation) will be borne by Red Oak. In addition
to the use of the mails, proxies may be solicited by Red Oak Partners,
LLC, other Participants and/or their employees by telephone, telegram, and
personal solicitation, for which no additional compensation will be paid to
those persons engaged in such solicitation. Red Oak has also retained MacKenzie
Partners as information agent.
Red Oak estimates that its total expenditures relating to the solicitation of
proxies will be approximately $[______] (including, without limitation, costs,
if any, related to advertising, printing, fees of attorneys, accountants, public
relations, transportation, and litigation). Total cash expenditures to date
relating to this solicitation have been approximately $[______].
Red Oak currently intends to seek reimbursement from the Company for its actual
expenses in connection with this solicitation and will consider seeking
reimbursement for its expenses in opposing the go-private proposals. Red Oak
will leave this decision to the directors not affiliated with Red Oak [who may
seek stockholder approval before reaching a decision.]
ADDITIONAL INFORMATION ABOUT PARTICIPANTS
None of Red Oak's nominees is employed by the Company. All of Red Oak's nominees
are citizens of the United States. All the Red Oak nominees satisfy the
independence requirements of Item 407 of Regulation S-K and all but Mr. Vogel
meet the Item 407 criteria for serving as an audit committee financial expert
either by having actively supervised a principal financial officer or by
experience in assessing and evaluating financial statements of public companies.
None of Red Oak, any of the persons participating in this proxy
solicitation on behalf of Red Oak or any of its nominees within the past five
years (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors); (ii) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree, or final
order enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws, or finding any violation with respect to such
laws; (iii) was a party to a civil proceeding which ultimately mandated
activities that were subject to federal securities laws.
Except as set forth in this proxy statement or in the annexes hereto,
none of Red Oak, any of the persons participating in this proxy solicitation on
behalf of Red Oak, the Red Oak nominees or, with respect to items (i), (vii) and
(viii) of this paragraph, any associate (within the meaning of Rule 14a-1 of the
Securities Exchange Act of 1934) of the foregoing persons (i) owns beneficially,
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directly or indirectly, any securities of the Company, (ii) owns
beneficially, directly or indirectly, any securities of any parent or subsidiary
of the Company, (iii) owns any securities of the Company of record but not
beneficially, (iv) has purchased or sold any securities of the Company within
the past two years, (v) has incurred indebtedness for the purpose of acquiring
or holding securities of the Company, (vi) is or has within the past
year been a party to any contract, arrangement or understanding with respect to
any securities of the Company, (vii) since the beginning of the Company's last
fiscal year has been indebted to the Company or any of its subsidiaries in
excess of $120,000 or (viii) has any arrangement or understanding with respect
to future employment by the Company or with respect to any future transactions
to which the Company or any of its affiliates will or may be a party. In
addition, except as set forth in this proxy statement or in the annexes hereto,
none of Red Oak, any of the persons participating in this proxy solicitation on
behalf of Red Oak, the Red Oak nominees and any associates of the foregoing
persons, has had or is to have a direct or indirect material interest in any
transaction or proposed transaction with the Company in which the amount
involved exceeds $120,000, since the beginning of the Company's last fiscal
year.
Except as set forth in this proxy statement or in the annexes hereto,
none of the Red Oak nominees, since the beginning of the Company's last fiscal
year, has been affiliated with (i) any entity that made or received, or during
the Company's current fiscal year proposes to make or receive, payments to or
from the Company or its subsidiaries for property or services in excess of five
percent of either the Company's or such entity's consolidated gross revenues for
its last full fiscal year, or (ii) any entity to which the Company or its
subsidiaries were indebted at the end of the Company's last full fiscal year in
an aggregate amount exceeding five percent of the Company's total consolidated
assets at the end of such year. None of the Red Oak nominees is, or during the
Company's last fiscal year has been, affiliated with any law or investment
banking firm that has performed or proposes to perform services for the Company.
Except as set forth in this proxy statement, none of the corporations or
organizations in which the Red Oak nominees have conducted their principal
occupation or employment was a parent, subsidiary or other affiliate of the
Company, and the Red Oak nominees do not hold any position or office with the
Company or have any family relationship with any executive officer or director
of the Company or have been involved in any proceedings, legal or otherwise, of
the type required to be disclosed by the rules governing this solicitation.
We have no reason to believe that any of the Red Oak nominees will be
disqualified or unwilling or unable to serve if elected. Red Oak reserves the
right to nominate substitute persons if the Company makes or announces any
changes to its bylaws or takes or announces any other action that has, or if
consummated would have, the effect of disqualifying any of the Red Oak
nominees. In addition, if any additional directorships are to be voted upon at
the Annual Meeting, Red Oak reserves the right to nominate additional persons to
fill the added positions and will appropriately amend this proxy statement. In
such case, shares represented by proxies given to us will be voted for any
substitute or additional nominees of Red Oak.
Section 16(a) Beneficial Ownership Reporting Compliance
No Red Oak nominee has failed to file any reports related to ASUR that are
required by Section 16(a) of the Securities Exchange Act of 1934, as amended.
-19-
PROXY MATERIALS ONLINE
This Red Oak proxy statement and Red Oak's other soliciting materials may be
accessed at the following website: www.ourmaterials.com/pinnaclefund
ADDITIONAL INFORMATION
In reliance upon Rule 14a-5(c) of the Securities Exchange Act of 1934,reference
is made to the Company's Proxy Statement dated July 17, 2009, which can be found
in the Company's public filings with the SEC. Stockholders may read this filing
for a full description of management's director nominees, the securities
ownership of the Board members in the Company, and additional information about
the Company's officers and directors, including compensation information. Also
included in the Company's proxy statement is the date by which shareholder
proposals intended to be submitted at the Company's 2010 annual meeting must be
received by the Company for inclusion in the Company's proxy statement and form
of proxy for that meeting and information regarding the various committees of
the Company's Board and other corporate governance matters.
Where You Can Find More Information
The Company files annual, quarterly and special reports, proxy statements, and
other information with the SEC. You may read and copy any reports, statements,
or other information the Company files with the SEC at the SEC's public
reference room at Station Place, 100 F Street, N.E., Washington D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. These SEC filings are also available to the public from
commercial document retrieval services and at the Internet World Wide Web site
maintained by the SEC at http://www.sec.gov by selecting "Search" at the top
right and then typing "forgent" into the box asking for the Company Name.
OTHER MATTERS
As of the date of this proxy statement, we are not aware of any other matter
that will be presented for consideration at the Annual Meeting. However, we do
not set the agenda, and the Company may submit additional matters.
Even if you have already returned a proxy card to management, you have
every right to revoke your earlier vote by signing, dating and mailing a BLUE
proxy card today.
REMEMBER . . . ONLY YOUR LATEST DATED PROXY COUNTS.
LET'S MAKE THE STOCKHOLDERS A PRIORITY AT ASUR.
SUPPORT OUR EFFORTS TO ENHANCE SHAREHOLDER VALUE.
VOTE THE BLUE PROXY CARD TODAY!
YOUR VOTE IS IMPORTANT-PLEASE CALL IF YOU HAVE QUESTIONS
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We have retained MacKenzie Partners to act as information agent in connection
with this proxy solicitation. If you have any questions or require any
assistance, including regarding online access to Red Oak's proxy materials,
please contact MacKenzie Partners, at the following address and telephone
number:
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If you have any questions, require assistance in voting your shares, or
need additional copies of Red Oak's proxy materials, please call MacKenzie
Partners at the phone numbers or email address listed below.
MacKenzie Partners, Inc. [LOGO]
105 Madison Avenue
New York, NY 10016
proxy@mackenziepartners.com
(212) 929-5500 (call collect)
Or
TOLL-FREE (800)322-2885
Shareholders may also obtain copies of Red Oak's proxy materials at
www.ourmaterials.com/pinnaclefund
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IT IS IMPORTANT THAT YOU RETURN YOUR PROXY PROMPTLY. PLEASE SIGN AND DATE THE
ACCOMPANYING BLUE PROXY CARD AFTER INDICATING A VOTE FOR OUR NOMINEES IN
PROPOSAL 1 AND AGAINST RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG AS
ASUR'S INDEPENDENT AUDITOR IN PROPOSAL AND PROMPTLY RETURN USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.
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EXHIBIT A
INFORMATION ABOUT THE PARTICIPANTS
IN THIS SOLICITATION OF PROXIES
NUMBER OF NUMBER OF PERCENT OF
SHARES SHARES CLASS
DIRECTLY BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS(1) OWNED OWNED (2) OWNED(3)
Red Oak Partners, LLC 0 3,201,523 10.29%
Red Oak Fund, LP 1,120,857 1,120,857 3.60%
Pinnacle Partners, LLC
32065 Castle Court
Suite 100
Evergreen, CO 80439 0 1,553,997 5.00%
Pinnacle Fund, LLLP
32065 Castle Court
Suite 100
Evergreen, CO 80439 1,553,997 1,553,997 5.00%
Bear Market Opportunity
Fund, LP
112 East Pecan Street
Suite 806
San Antonio, TX 78205 526,669 526,669 1.69%
Cornelius Ferris
59 Presidential Drive
Southborough, MA 01772 0 0 0.00%
Pat Goepel
16 Abbottswood Drive
Sudbury, MA 01776 121,837 121,837 0.39%
Robert (Bob) Graham
400 Panamint Road
Reno, Nevada 89521 82,076 960,698 3.09%
David Sandberg
654 Broadway, Suite 5
New York, NY 10012 0 3,201,523 10.29%
Adrian Pertierra
654 Broadway, Suite 5
New York, NY 10012 0 3,201,523 10.29%
Jeffrey Vogel
319 Blackstone Blvd.
Providence, RI 02906 60,000 60,000 0.19%
(1) * The business address for each Red Oak participant is:
654 Broadway, Suite 5, New York, New York 10012
(2) The shares reported as beneficially owned by Red Oak Partners,
LLC are those owned by Red Oak Fund, LP, Pinnacle Partners, LLC,
Pinnacle Fund, LLLP, and Bear Market Opportunity Fund, LP.
(3) Based on 31,107,273 shares of common stock of Forgent Networks,
Inc. outstanding at July 15, 2009, as reported in Forgent
Networks, Inc.'s proxy statement filed with the Securities and
Exchange Commission on July 17, 2009.
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EXHIBIT B
TRANSACTIONS WITHIN THE PAST TWO YEARS BY THE PARTICIPANTS
IN THIS SOLICITATION OF PROXIES
Red Oak and its Affiliates have made the following purchases and sales
of the Company's securities in the past two years:
# of Shares
Date Price Bought/(Sold) Purchaser
10/28/2008 0.173 32,300.00 Pinnacle
10/29/2008 0.180 19,291.00 Red Oak
10/30/2008 0.180 3,044.00 Red Oak
10/31/2008 0.180 51,600.00 Pinnacle
10/31/2008 0.180 51,600.00 Red Oak
11/3/2008 0.200 12,000.00 Pinnacle
11/5/2008 0.240 14,000.00 Pinnacle
11/5/2008 0.240 14,000.00 Red Oak
11/6/2008 0.220 8,050.00 Pinnacle
11/6/2008 0.220 8,050.00 Red Oak
11/7/2008 0.200 21,900.00 Pinnacle
11/7/2008 0.200 21,900.00 Red Oak
11/10/2008 0.210 30,000.00 Pinnacle
11/10/2008 0.210 30,000.00 Red Oak
11/11/2008 0.210 27,500.00 Pinnacle
11/11/2008 0.210 27,500.00 Red Oak
11/12/2008 0.210 9,051.00 Pinnacle
11/12/2008 0.210 9,049.00 Red Oak
11/13/2008 0.200 32,493.00 Pinnacle
11/13/2008 0.200 16,000.00 Red Oak
11/14/2008 0.229 5,200.00 Red Oak
11/17/2008 0.200 100 Pinnacle
11/18/2008 0.227 38,254.00 Pinnacle
11/18/2008 0.227 38,256.00 Red Oak
11/19/2008 0.205 5,500.00 Pinnacle
11/19/2008 0.205 5,500.00 Red Oak
11/20/2008 0.205 20,791.00 Pinnacle
11/20/2008 0.205 40,000.00 Red Oak
11/21/2008 0.214 10,338.00 Pinnacle
11/21/2008 0.214 10,339.00 Red Oak
11/24/2008 0.200 800 Pinnacle
12/2/2008 0.200 5,000.00 Red Oak
12/3/2008 0.197 10,002.00 Pinnacle
12/3/2008 0.197 10,002.00 Red Oak
12/4/2008 0.189 18,774.00 Pinnacle
12/4/2008 0.189 18,774.00 Red Oak
12/5/2008 0.205 4,950.00 Pinnacle
12/5/2008 0.205 4,950.00 Red Oak
12/12/2008 0.216 12,710.00 Pinnacle
12/12/2008 0.216 12,710.00 Red Oak
12/15/2008 0.206 18,524.00 Pinnacle
12/15/2008 0.206 18,525.00 Red Oak
12/17/2008 0.210 35,100.00 Pinnacle
12/17/2008 0.210 35,100.00 Red Oak
12/18/2008 0.210 7,900.00 Pinnacle
12/18/2008 0.210 7,900.00 Red Oak
12/19/2008 0.210 15,600.00 Pinnacle
12/19/2008 0.210 15,600.00 Red Oak
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12/22/2008 0.203 4,300.00 Pinnacle
12/22/2008 0.203 4,300.00 Red Oak
12/23/2008 0.203 16,700.00 Pinnacle
12/23/2008 0.203 16,700.00 Red Oak
12/26/2008 0.188 25,650.00 Pinnacle
12/26/2008 0.188 25,650.00 Red Oak
12/29/2008 0.167 67,900.00 Pinnacle
12/29/2008 0.167 67,900.00 Red Oak
12/30/2008 0.162 31,569.00 Pinnacle
12/30/2008 0.162 31,569.00 Red Oak
12/31/2008 0.174 7,000.00 Pinnacle
12/31/2008 0.174 7,000.00 Red Oak
2/2/2009 0.200 175,997.00 Pinnacle
2/2/2009 0.200 143,998.00 Red Oak
2/3/2009 0.190 45,533.00 Red Oak
2/9/2009 0.165 400 Bear
2/10/2009 0.170 1,777.00 Bear
2/11/2009 0.170 285,300.00 Bear
2/12/2009 0.180 23,609.00 Bear
2/19/2009 0.154 80,178.00 Bear
2/27/2009 0.141 114,405.00 Pinnacle
2/27/2009 0.141 114,405.00 Bear
3/2/2009 0.140 700 Bear
3/3/2009 0.135 8,450.00 Pinnacle
3/3/2009 0.135 8,450.00 Bear
3/4/2009 0.138 4,600.00 Pinnacle
3/5/2009 0.135 11,850.00 Pinnacle
3/5/2009 0.135 11,850.00 Bear
3/6/2009 0.139 12,500.00 Pinnacle
3/6/2009 0.139 12,500.00 Red Oak
3/9/2009 0.130 2,300.00 Pinnacle
3/10/2009 0.130 5,144.00 Red Oak
3/11/2009 0.140 1,900.00 Pinnacle
3/16/2009 0.115 23,592.00 Pinnacle
3/16/2009 0.115 23,593.00 Red Oak
5/19/2009 0.180 10,031.00 Pinnacle
5/20/2009 0.180 40,248.00 Pinnacle
5/21/2009 0.180 16,000.00 Pinnacle
6/3/2009 0.180 32,900.00 Pinnacle
6/4/2009 0.180 39,200.00 Red Oak
6/9/2009 0.198 4,965.00 Pinnacle
6/10/2009 0.199 6,856.00 Pinnacle
6/11/2009 0.200 2,000.00 Pinnacle
6/12/2009 0.230 300 Pinnacle
6/15/2009 0.221 5,965.00 Pinnacle
6/16/2009 0.229 112,200.00 Pinnacle
6/17/2009 0.230 108,700.00 Pinnacle
6/18/2009 0.239 215,572.00 Pinnacle
6/18/2009 0.239 215,572.00 Red Oak
6/19/2009 0.235 7,900.00 Pinnacle
6/19/2009 0.235 7,900.00 Red Oak
6/22/2009 0.248 12,217.00 Pinnacle
6/22/2009 0.248 12,217.00 Red Oak
6/23/2009 0.250 2,683.00 Pinnacle
6/23/2009 0.250 2,683.00 Red Oak
6/26/2009 0.250 11,060.00 Pinnacle
6/26/2009 0.250 11,061.00 Red Oak
6/29/2009 0.260 8,450.00 Pinnacle
6/30/2009 0.260 9,000.00 Pinnacle
6/30/2009 0.260 20,047.00 Red Oak
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# of Shares
Date Bought/(Sold) Purchaser
10/5/2007 (1) 86,981 Pat Goepel
6/18/2009 34,856 Pat Goepel
# of Shares
Date Bought/(Sold) Purchaser
2/17/2009 5,000 JEFFREY VOGEL
3/13/2009 20,000 JEFFREY VOGEL
6/8/2009 1,300 JEFFREY VOGEL
6/15/2009 33,700 JEFFREY VOGEL
# of Shares
Date Bought/(Sold) Purchaser
10/5/2007 (1) 878,622 Global Accelerator (2)
10/5/2007 (1) 82,076 Robert Graham
(1) shares were acquired through the exchange of iEmployee shares for ASUR
shares upon the completion the acquisition of iSarla Inc. by ASUR on October 5,
2007.
(2) Robert Graham is the manager of Global Accelerator LLC.
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EXHIBIT C
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information regarding the beneficial
ownership of ASUR's Common Stock by each person or group known to own more than
five percent of the outstanding shares of ASUR's Common Stock, each of the
Company's executive officers named in the Summary Compensation Table of ASUR's
proxy statement, each of the Company's directors, and all of its directors and
executive officers as a group.
The following table sets forth certain information with respect to
beneficial ownership of ASUR's Common Stock by and its director nominees as of
July 15, 2009, the most recent date practicable disclosed in the Company's proxy
statement. As of July 15, 2009, the Company states that 31,107,273 shares of
its Common Stock were issued and outstanding.
The following table sets forth certain information with respect to beneficial
ownership of the Company's Common Stock as of July 15, 2009 by:
- each person who is known by us to beneficially own more than five
percent of the Company's common stock; and
- each of the Company's directors at that date and nominees and named
executive officers; and all directors and officers as a group.
Shares
Beneficially Owned(1)(2)
Name and Address of Beneficial Owner Number Percent
Red Oak Partners, LLC, New York, NY 3,201,523 (3) 10.29%
Fenil Shah Group, Barrington, RI 2,111,864 (4) 6.79%
Renaissance Technologies, Inc. LLC, New York, NY 1,645,600 5.29%
Richard N. Snyder 983,655 (5) 3.12%
James H. Wells 95,672 (6) *
Lou Mazzucchelli 57,772 (7) *
Richard J. Agnich 97,772 (8) *
Ray R. Miles 51,772 (9) *
Jay C. Peterson 276,877 (10) *
Nancy Harris 265,680 (11) *
All Directors and officers as a group (7 persons) 1,829,200 (12) 5.88%
(5)(6)(7)(8)(9)(10)(11)
* Indicates ownership of less than 1% of the company's common stock
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(1) Beneficial ownership as reported in the above table has been determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, and, with respect to persons other than Red Oak, was ascertained from
the Company's proxy statement. Red Oak believes that the persons and entities
named in the table have sole voting and investment power with respect to all
shares shown as beneficially owned by them, except as noted below. Amounts shown
include shares of the Company's Common Stock issuable upon exercise of certain
outstanding options within 60 days after July 15, 2009.
(2) Except for the percentages of certain parties that are based on presently
exercisable options which are indicated in the following footnotes to the table,
the percentages indicated are based on 31,107,273 shares of the Company's Common
Stock issued and outstanding on July 15, 2009. In the case of parties holding
presently exercisable options, the percentage ownership is calculated on the
assumption that the shares presently held or purchasable within the next 60 days
underlying such options are outstanding.
(3) Pursuant to Schedule 13D (Amendment No. 8) filed by Red Oak with the SEC on
July 14, 2009.
(4) Pursuant to Schedule 13D filed by Fenil Shah Group with the SEC on May 28,
2009.
(5) Consists of 540,772 shares held by Mr. Snyder directly and 442.933 shares
which Mr. Snyder may acquire upon the exercise of options within 60 days after
July 15, 2009.
(6) Consists of 50,672 shares held by Mr. Wells directly and 45,000 shares which
Mr. Wells may acquire upon the exercise of options within 60 days after July 15,
2009.
(7) Consists of 12,772 shares held directly by Mr. Mazzucchelli and 45,000
shares which Mr. Mazzucchelli may acquire upon the exercise of options within 60
days after July 15, 2009.
(8) Consists of 62,772 shares held directly by Mr. Agnich and 35,000 shares
which Mr. Agnich may acquire upon the exercise of options within 60 days after
July 15, 2009.
(9) Consists of 16,772 shares held by Mr. Miles directly and 35,000 shares which
Mr. Miles may acquire upon the exercise of options within 60 days after July 15,
2009.
(10) Consists of 52,502 shares held by Mr. Peterson directly and 224,375 shares
which Mr. Peterson may acquire upon the exercise of options within 60 days after
July 15, 2009.
(11) Consists of 115,512 shares held by Ms. Harris directly and 150,168 shares
which Ms. Harris may acquire upon the exercise of options within 60 days after
July 15, 2009.
(12) All options held by the Company's named executive officers were granted
under the 1989 Stock Option Plan or the 1996 Stock Option Plan. Pursuant to
these stock option plans, all options granted thereunder are immediately
exercisable; however, shares issued upon exercise are subject to repurchase by
the Company, at the exercise price, to the extent of the number of shares that
have not vested in the event that the optionees' employment terminates prior to
all such optionees' options becoming vested.
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PRELIMINARY COPY-SUBJECT TO COMPLETION
PROXY
THIS PROXY IS SOLICITED BY RED OAK/PINNACLE, ("RED OAK")
ANNUAL MEETING OF STOCKHOLDERS FOR FISCAL 2008
The undersigned stockholder of Forgent Networks, Inc. hereby appoints David
Sandberg and Adrian Perrierra, and each or any of them with full power of
substitution, as Proxy for the undersigned to vote all shares of common stock,
par value $0.01, of Forgent Networks, Inc. (the "Company"), which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
on August 28, 2009, or any adjournment(s) or postponement(s) thereof (the
"Annual Meeting"), as indicated on the reverse side of this card, and to vote in
their discretion on any other matters that may properly come before the Annual
Meeting, which were not known by the persons making this solicitation at a
reasonable time before this proxy was solicited.
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of common stock of the Company held by
the undersigned. If properly executed, this proxy will be voted as directed on
the reverse side. If no direction is given, this proxy will be voted FOR the
Red Oak nominees (Proposal 1) and AGAINST Proposal 2, the ratification of Ernst
& Young LLP as the Company's independent registered public accounting firm for
the fiscal year ending July 31, 2009, and in the discretion of the proxies on
any other matters that may properly come before the Annual Meeting, which were
not known by the persons making this solicitation at a reasonable time before
this proxy was solicited.
IMPORTANT: PLEASE SIGN AND DATE ON THE REVERSE SIDE AND RETURN THIS BLUE PROXY
CARD USING THE ENCLOSED POSTAGE-PAID ENVELOPE
You may also vote your shares electronically through the Internet or by
telephone up until 11:59 P.M. Central Standard Time the day before the Annual
Meeting date. If you choose to vote through the Internet or by telephone, there
is no need to return the enclosed Blue proxy card.
To Vote by Internet
* Log on to the Internet and go to the web site [http://www.____________]
* Have the enclosed Blue proxy card on hand when you access the web
site and you will be prompted to enter your 12-digit Control Number,
which is located below, to obtain your records and to create an
electronic voting instruction form.
To Vote by Telephone
* Use any touch-tone telephone to dial [1-8__-____-______].
* Have the enclosed [Blue] proxy card on hand when you call, and you will
be prompted to enter your 12-digit Control Number, which is located
below, to vote. Follow the instructions that the Vote Voice provides
you.
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RED OAK RECOMMENDS A VOTE FOR OUR DIRECTORS (PROPOSAL 1) AND
AGAINST PROPOSAL 2.
1. Proposal to elect the Red Oak Nominees to the Board of Directors
CORNELIUS (NEIL) FERRIS [ ] FOR [ ] WITHHOLD
BOB GRAHAM [ ] FOR [ ] WITHHOLD
PAT GOEPEL [ ] FOR [ ] WITHHOLD
ADRIAN PERTIERRA [ ] FOR [ ] WITHHOLD
DAVID SANDBERG [ ] FOR [ ] WITHHOLD
JEFFREY VOGEL [ ] FOR [ ] WITHHOLD
2. The ratification of Ernst & Young LLP as Forgent Networks,
Inc.'s independent registered public accounting firm for the fiscal
year ending July 31, 2009.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated: __________, 2009
____________________________________ Signature
____________________________________
Signature (if held jointly)
Name: ______________________________
Title:______________________________
Please date this proxy, sign exactly as your name(s) appears hereon and return
this proxy promptly using the enclosed envelope. Where stock is owned by more
than one person, all owners should sign the proxy. When signing as attorney,
executor, trustee or guardian, please give your full title. If there is more
than one trustee, all should sign. If a corporation, please sign in full
corporate name by the president or other authorized officer. If a partnership,
please sign in partnership name by an authorized person.
RED OAK RECOMMENDS A VOTE FOR OUR DIRECTORS (PROPOSAL 1) AND AGAINST PROPOSAL 2.
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