Parlux (PARL) Holder Nussdorf Looks to Remove All or a Majority of the Board
In an amended 13D filing on Parlux Fragrances Inc. (Nasdaq: PARL), 12.2% holder Glenn H. Nussdorf disclosed a letter to the Board of Directors of the Company in which Mr. Nussdorf advised the Board of Directors of his intention to commence a consent solicitation to remove all or a majority of the members of the Board of Directors of the Company and to fill the vacancies created by such removal with individuals to be nominated by Mr. Nussdorf.
A Copy of the Letter:
Dear Board Members:
I am writing to advise you that I intend to commence a consent solicitation to remove all or a majority of the members of the Board of Directors of Parlux Fragrances, Inc. ("Parlux" or the "Company") and to fillvacancies created by such removal with individuals to be nominated by me.
As the beneficial owner of a substantial percentage of the outstanding shares of Parlux, I believe that much can be done to increase shareholder value and that it is time for immediate change at both the Board and managemen tlevels. The decline in the Company's share price from a high closing price of$18.96 earlier this year (after adjusting for a 2-for-1 split in June 2006) tothe current $6.26 level (a decrease in shareholder value of 67%), the Company'srecent disclosure of decreased sales and earnings for the quarter ended September 30, 2006, and the allegations in the recently amended class actionl awsuit that the Company improperly recognized revenues on sales to related parties, have led me to conclude that the Board of Directors is failing to actin the best interests of the Company's shareholders and is not exercising appropriate oversight of management. I am convinced that a continuation of the status quo risks a further destruction of shareholder value and, accordingly, I intend to protect the value of my significant investment in the Company through a consent solicitation to replace members of the Board of Directors.
As I have publicly disclosed in my Schedule 13D filing, I am exploring the possibility of making an acquisition proposal to acquire the Company in a business combination transaction. While I have not made a decision at this time whether to pursue such a proposal, I strongly urge the Board not to take any action (such as the previously announced and subsequently abandoned sale of thePerry Ellis brand) which would materially modify or impact the Company's business, products or assets and could adversely effect the Company's value. In addition, the consent solicitation will present Parlux shareholders with aunique opportunity to express their views on the future direction of the Company.
In view of the foregoing, I am putting each director and executive officer on notice not to attempt to usurp the rights of shareholders to determine the Company's future direction, including any attempt to sell orotherwise dispose of or surrender any of its product lines, including, without limitation, the Perry Ellis brand.
I intend to take all actions necessary to hold each director and executive officer accountable if they approve or engage in any transaction with respect to the foregoing or which is otherwise inconsistent with the best interests of the Company and its shareholders.
In addition, Mr. Lekach is aware of my serious concern about the level of payments and benefits under existing severance agreements with him and three other senior executives of Parlux. I am putting Parlux's Board of Directors on notice that no payments should be made or benefits granted under these agreements until they are subjected to a thorough review by my nominees, if elected to the Board.
Sincerely,
Glenn H. Nussdorf
A Copy of the Letter:
Dear Board Members:
I am writing to advise you that I intend to commence a consent solicitation to remove all or a majority of the members of the Board of Directors of Parlux Fragrances, Inc. ("Parlux" or the "Company") and to fillvacancies created by such removal with individuals to be nominated by me.
As the beneficial owner of a substantial percentage of the outstanding shares of Parlux, I believe that much can be done to increase shareholder value and that it is time for immediate change at both the Board and managemen tlevels. The decline in the Company's share price from a high closing price of$18.96 earlier this year (after adjusting for a 2-for-1 split in June 2006) tothe current $6.26 level (a decrease in shareholder value of 67%), the Company'srecent disclosure of decreased sales and earnings for the quarter ended September 30, 2006, and the allegations in the recently amended class actionl awsuit that the Company improperly recognized revenues on sales to related parties, have led me to conclude that the Board of Directors is failing to actin the best interests of the Company's shareholders and is not exercising appropriate oversight of management. I am convinced that a continuation of the status quo risks a further destruction of shareholder value and, accordingly, I intend to protect the value of my significant investment in the Company through a consent solicitation to replace members of the Board of Directors.
As I have publicly disclosed in my Schedule 13D filing, I am exploring the possibility of making an acquisition proposal to acquire the Company in a business combination transaction. While I have not made a decision at this time whether to pursue such a proposal, I strongly urge the Board not to take any action (such as the previously announced and subsequently abandoned sale of thePerry Ellis brand) which would materially modify or impact the Company's business, products or assets and could adversely effect the Company's value. In addition, the consent solicitation will present Parlux shareholders with aunique opportunity to express their views on the future direction of the Company.
In view of the foregoing, I am putting each director and executive officer on notice not to attempt to usurp the rights of shareholders to determine the Company's future direction, including any attempt to sell orotherwise dispose of or surrender any of its product lines, including, without limitation, the Perry Ellis brand.
I intend to take all actions necessary to hold each director and executive officer accountable if they approve or engage in any transaction with respect to the foregoing or which is otherwise inconsistent with the best interests of the Company and its shareholders.
In addition, Mr. Lekach is aware of my serious concern about the level of payments and benefits under existing severance agreements with him and three other senior executives of Parlux. I am putting Parlux's Board of Directors on notice that no payments should be made or benefits granted under these agreements until they are subjected to a thorough review by my nominees, if elected to the Board.
Sincerely,
Glenn H. Nussdorf
Labels: Glenn Nussdorf, PARL
posted by Lon at 4:20 PM
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