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Form DFAN14A EPIQ SYSTEMS INC Filed by: VILLERE ST DENIS J & CO LLC

April 13, 2016 5:24 PM EDT

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934 (Amendment No. __)

 

 

Filed by the Registrant [ ]

 

Filed by a Party other than the Registrant [x]

 

Check the appropriate box:

 

[   ] Preliminary Proxy Statement
[   ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[   ] Definitive Proxy Statement
[   ] Definitive Additional Materials
[x] Soliciting Material Under Rule 14a-12

 

Epiq Systems, Inc.

 

(Name of Registrant as Specified In Its Charter)

 

St. Denis J. Villere & Company, LLC

St. Denis J. Villere, II

St. Denis J. Villere, III

George G. Villere

Gregory H. Browne

Richard K. Blum

Jeffrey R. Galgano

Barry D. LeBlanc

Greg Share

George V. Young

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

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On April 13, 2016, St. Denis J. Villere & Company, LLC (“Villere”) issued a press release (the “Press Release”) announcing the decision of the Kansas City Circuit Court confirming the validity of Villere’s nomination of candidates for election to the board of directors of Epic Systems, Inc. (the “Company”) at the Company’s 2016 annual meeting of shareholders, and permanently enjoining the Company from interfering with the nominations. The foregoing summary of the Press Release is qualified in its entirety by reference to the full text of the Press Release, a copy of which is attached hereto as Exhibit 1 and is incorporated by reference herein.

In addition, information regarding the participants in a solicitation of proxies of shareholders of the Company in connection with its 2016 annual meeting is filed herewith as Exhibit 2.

 

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Exhibit 1

News

 

FOR IMMEDIATE RELEASE

 

 

Media Contact:
Milin Iyer, [email protected], (703) 299-8390

Company Contact:

George Young, partner, [email protected], (504) 525-0808

 

 

Villere & Co. Fights for Shareholders, Wins “Epiq” Court Ruling

 

NEW ORLEANS, LA, April 13, 2016 – Investment advisor St. Denis J. Villere & Co. ("Villere") won a major victory in the Kansas City Circuit Court last week in their case against Kansas City-based Epiq Systems, Inc. (NASDAQ: EPIQ). Villere sought to nominate a new slate of directors for Epiq, a bankruptcy, eDiscovery, and administrative services company, because they believe that the company’s recent years of declining performance was the result of poor management.

 

In the five years prior to Villere’s active engagement, Epiq’s stock price dropped 8.65% (June 30, 2009 to June 30, 2014) compared to a gain of 119.20% for the Russell 3000 index, a measure of the broader stock market. Since then, coincident with Villere’s involvement, Epiq’s stock price rose 6.90% vs. the Russell’s 3.16% (July 1, 2014 to March 31, 2016.)

 

Villere, a long-term investor in Epiq, nominated six highly qualified individuals for election to Epiq's board of directors on December 4, 2015.

 
 

“We have been asked why we didn’t just sell our shares in light of the company’s poor performance,” said George Young, partner at Villere. “We have owned Epiq for over 10 years and met with current management many times to voice our concerns. Based on our research and knowledge, we continue to view Epiq as a fundamentally good company with the potential for tremendous value creation. In our opinion, their performance issues stem from inadequate management. We firmly believe a change in leadership could right the ship, and we are willing to fight for such a change on behalf of our investors and all the other shareholders.”

 

In the two weeks that followed, Epiq rejected the nomination, contending that it was made in violation of a standstill agreement (the Director Appointment Agreement) entered into between Villere and Epiq on November 1, 2014 and that the nomination did not comply with Epiq's Amended and Restated Bylaws, which limit shareholder nominations of directors to those who own 5% or more of Epiq's stock for more than 24-months.

 

Villere had been a beneficial owner of more than 5% of Epiq stock since August 13, 2003.

In response, Villere was forced to take the extraordinary step of suing the company and its directors, save one, to enforce its right as a shareholder to nominate a slate of directors who could then be presented at Epiq’s 2016 Annual Shareholders Meeting.

 

Epiq’s litigation tactics demonstrated that their principal goal was to deter Villere and avoid a contested election. Epiq employed a variety of delaying tactics seeking to put off the trial until after the 2016 annual meeting, which included bringing counterclaims against Villere and twenty of its clients, and added significantly to the litigation expense which Epic is funding with shareholder money.

 

These aggressive actions toward Villere's clients deserve special note, as they reveal the extraordinary length to which Epiq will go to entrench themselves in office. In a highly unusual move, Epiq subpoenaed twenty Villere clients to produce documents and appear at depositions in a purported effort to show that the clients, who all had executed account agreements delegating to Villere all investment and voting power over the Epiq shares at issue, had not authorized Villere's actions. Epiq named each of them as counterclaim defendants.

 

Last week, the Court totally rejected Epiq’s positions and enforced Villere’s rights. It found that Villere properly terminated the standstill "under the plain, unambiguous language of the Director Appointment Agreement" and that Villere's nomination fully complied with the Company's Bylaws.

 
 

 The Court granted Villere’s requested declaratory judgment and permanently enjoined Epiq and director defendants "from preventing Villere, through Cede, from presenting its slate of nominees at the 2016 Annual Meeting."

 

The Court's ruling cleared the way for Villere to commence its proxy contest. Shareholders will have a chance to elect directors to Epiq’s board at the company’s annual meeting on June 9, 2016.

 

“We are eager to move forward and put this immense legal battle behind us, a battle we have taken on at no cost to our investors as part of our fiduciary responsibility. Our activist stance has not been undertaken lightly. Our research process is grounded in knowing intimately the companies in which we invest. With new leadership, we are confident that Epiq will deliver greatly-enhanced long-term value, which is at the core of our investment philosophy,” Young added.

 

Epiq stockholders with questions about the Epiq Annual Meeting can contact Okapi Partners, Villere’s proxy solicitor, toll-free at (855) 305-0857.

 

 

About Villere & Co.

Founded over 100 years ago in 1911 by St. Denis J. Villere, Villere & Co. remains a family-run business. An SEC-Registered Investment Advisor, it is headquartered in New Orleans. The advisor has been operated continuously since then by four generations of the Villere family. As of 12/31/2015, the firm has nearly $2.5 billion in assets under management for separate accounts and two mutual funds. See www.villere.com for additional information.

 

ST. DENIS J. VILLERE & COMPANY, LLC, GEORGE V. YOUNG, ST. DENIS J. VILLERE, II, ST. DENIS J. VILLERE, III, AND GEORGE G. VILLERE (COLLECTIVELY, “VILLERE”), AND RICHARD K. BLUM, GREGORY H. BROWNE, BARRY D. LEBLANC, JEFFREY R. GALGANO, AND GREG SHARE (COLLECTIVELY, WITH VILLERE, THE “PARTICIPANTS”) INTEND TO FILE WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) A DEFINITIVE PROXY STATEMENT AND ACCOMPANYING FORM OF PROXY CARD TO BE USED IN CONNECTION WITH THE PARTICIPANTS’ SOLICITATION OF PROXIES FROM THE SHAREHOLDERS OF EPIQ SYSTEMS, INC. (THE “COMPANY”) FOR USE AT THE COMPANY’S 2016 ANNUAL MEETING OF SHAREHOLDERS (THE “PROXY SOLICITATION”).  ALL SHAREHOLDERS OF THE COMPANY ARE

 
 

ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE PROXY SOLICITATION, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS.  WHEN COMPLETED, THE DEFINITIVE PROXY STATEMENT AND AN ACCOMPANYING PROXY CARD WILL BE FURNISHED TO SOME OR ALL OF THE COMPANY’S SHAREHOLDERS AND WILL BE, ALONG WITH OTHER RELEVANT DOCUMENTS, AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV/.

 

INFORMATION ABOUT THE PARTICIPANTS AND A DESCRIPTION OF THEIR DIRECT OR INDIRECT INTERESTS BY SECURITY HOLDINGS WILL BE CONTAINED IN AN EXHIBIT TO THE SCHEDULE 14A TO BE FILED BY VILLERE WITH THE SEC ON APRIL 13, 2016. THIS DOCUMENT CAN BE OBTAINED FREE OF CHARGE FROM THE SOURCE INDICATED ABOVE.

 

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Exhibit 2

ST. DENIS J. VILLERE & COMPANY, LLC, GEORGE V. YOUNG, ST. DENIS J. VILLERE, II, ST. DENIS J. VILLERE, III, AND GEORGE G. VILLERE (COLLECTIVELY, “VILLERE”), AND RICHARD K. BLUM, GREGORY H. BROWNE, BARRY D. LEBLANC, JEFFREY R. GALGANO, AND GREG SHARE (COLLECTIVELY, WITH VILLERE, THE “PARTICIPANTS”) INTEND TO FILE WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) A DEFINITIVE PROXY STATEMENT AND ACCOMPANYING FORM OF PROXY CARD TO BE USED IN CONNECTION WITH THE PARTICIPANTS’ SOLICITATION OF PROXIES FROM THE SHAREHOLDERS OF EPIQ SYSTEMS, INC. (THE “COMPANY”) FOR USE AT THE COMPANY’S 2016 ANNUAL MEETING OF SHAREHOLDERS (THE “PROXY SOLICITATION”). ALL SHAREHOLDERS OF THE COMPANY ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE PROXY SOLICITATION, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS. WHEN COMPLETED, THE DEFINITIVE PROXY STATEMENT AND AN ACCOMPANYING PROXY CARD WILL BE FURNISHED TO SOME OR ALL OF THE COMPANY’S SHAREHOLDERS AND WILL BE, ALONG WITH OTHER RELEVANT DOCUMENTS, AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV/.

 

PARTICIPANTS:

 

The Participants are anticipated to be, or may be deemed to be, participants in a solicitation of proxies from the shareholders of Epiq Systems, Inc. (the “Company”) (the “Proxy Solicitation”).

 

The Participants include: (i) St. Denis J. Villere & Company, LLC, a Louisiana limited liability company (“Villere”), (ii) George V. Young (“Mr. Young”), (iii) St. Denis J. Villere, II (“Mr. S. Villere II”), (iv) St. Denis J. Villere, III (“Mr. S. Villere III”), and (v) George G. Villere (“Mr. G. Villere,” collectively, with Villere and Messrs. Young, S. Villere II, and S. Villere III, “The Villere Group”), along with (vi) Richard K. Blum, (vii) Gregory H. Browne, (viii) Jeffrey R. Galgano, (vii) Barry D. LeBlanc, and (ix) and Greg Share (collectively, with Mr. Young, the “Nominees”). The Nominees have each agreed to serve on a slate of nominees proposed by Villere for election as directors at the 2016 annual meeting of shareholders of the Company.

 

In addition to the above, employees of the Participants may assist in the solicitation of proxies and will receive no additional consideration therefor.

 

BENEFICIAL OWNERSHIP OF SHARES:

 

As of the close of business on April 12, 2016, the Villere Group beneficially owned an aggregate of 5,095,128 shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”). Such Common Stock is held in accounts under Villere's management and control. Each of Messrs. Young, S. Villere II, S. Villere III and G. Villere, as a member of Villere, may be deemed the beneficial owners of the 5,095,128 shares of Common Stock beneficially owned by Villere. Of such 5,095,128 shares of Common Stock, Mr. Young directly owns 17,150 shares of Common Stock, Mr. S. Villere II directly owns 31,685 shares of Common Stock, and Mr. S. Villere III directly owns 7,900 shares of Common Stock. Messrs. Young, S. Villere II, S. Villere III and G. Villere have the shared power to vote 5,095,128 shares of Common Stock. Mr. Young has the sole power to vote and to dispose of 17,150 shares of Common Stock. Mr. S. Villere II has sole power to vote and to dispose of 31,685 shares of Common Stock. Mr. S. Villere III has sole power to vote and to dispose of 7,900 shares of Common stock.

 
 

In addition,of the 5,095,128 shares of Common Stock beneficially owned by the Villiere Group, Mr. LeBlanc may be deemed to beneficially own 17,000 shares of Common Stock. Of such 17,000 shares of Common Stock, Mr. LeBlanc disclaims beneficial ownership of 7,500 shares attributable to his spouse. Mr. LeBlanc has the sole power to vote 8,500 shares of Common Stock and the shared power to vote 8,500 shares of Common Stock.

 

Collectively, the Participants may be deemed to have beneficial ownership of a combined 5,095,128 shares of Common Stock, representing approximately 13.5% of the issued and outstanding shares of Common Stock. The percentages provided herein are based upon 37,672,402 shares of Common Stock outstanding as of February 25, 2016, as disclosed in the Company’s annual report on Form 10-K for the fiscal year ended on December 31, 2015.

 

 



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