New Frontier Media (NOOF) Enters Proxy Settlement with Longkloof Ltd.
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New Frontier Media, Inc. (Nasdaq: NOOF), has entered into a settlement agreement with Longkloof Limited, Hosken Consolidated Investments Limited (Johannesburg Stock Exchange: HCI) and various associated parties to end Longkloof's proxy contest related to the Company's 2012 annual meeting of shareholders. The settlement also ends the related litigation between the Company and the Longkloof parties that was pending in the U.S. District Court for the District of Colorado.
Under the terms of the settlement agreement, the Longkloof parties, which beneficially own in the aggregate approximately 15.9% of the Company's outstanding shares, have agreed to immediately terminate their proxy contest, withdraw their notice of intent to nominate four candidates for election to the Company's Board, and not support, for the balance of 2012, any other person not recommended by the Company's Board in seeking representation on the Company's Board. In addition, the Longkloof parties have agreed to certain standstill restrictions through December 31, 2012 and New Frontier has agreed that if the Company does not engage in a sale, merger or similar change of control transaction by December 31, 2012, Longkloof will have the right to designate one person for appointment to the Company's Board for a term expiring at the 2013 annual meeting of shareholders and, under certain circumstances, the Company will be obligated to include such designee on the slate of nominees presented by the Company to shareholders at the 2013 annual meeting of shareholders. As part of the settlement agreement, all pending litigation between New Frontier Media and the Longkloof parties will be dismissed by the parties without prejudice and without admission of any wrongdoing by any party. The full agreement will be included as an Exhibit to the Form 8-K that the Company will file with the Securities and Exchange Commission as required by applicable law.
Under the terms of the settlement agreement, the Longkloof parties, which beneficially own in the aggregate approximately 15.9% of the Company's outstanding shares, have agreed to immediately terminate their proxy contest, withdraw their notice of intent to nominate four candidates for election to the Company's Board, and not support, for the balance of 2012, any other person not recommended by the Company's Board in seeking representation on the Company's Board. In addition, the Longkloof parties have agreed to certain standstill restrictions through December 31, 2012 and New Frontier has agreed that if the Company does not engage in a sale, merger or similar change of control transaction by December 31, 2012, Longkloof will have the right to designate one person for appointment to the Company's Board for a term expiring at the 2013 annual meeting of shareholders and, under certain circumstances, the Company will be obligated to include such designee on the slate of nominees presented by the Company to shareholders at the 2013 annual meeting of shareholders. As part of the settlement agreement, all pending litigation between New Frontier Media and the Longkloof parties will be dismissed by the parties without prejudice and without admission of any wrongdoing by any party. The full agreement will be included as an Exhibit to the Form 8-K that the Company will file with the Securities and Exchange Commission as required by applicable law.
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