Absent a positive meeting with the Board of Directors and in light of these shareholder democracy survey results, BLUM Growth Fund feels it will be necessary to call for a special shareholder meeting to elect new leadership and new Board Directors at Cosi, as recommended by the BLUM Growth Fund plan, officially submitted to the Board of Directors dated October 12, 2011. A number of shareholders see this as necessary to drive Cosi in a dramatically new and positive direction.Cosi governance allows for this type of special election if granted by the Board of Directors. BLUM Growth Fund would respectfully request a special meeting of shareholders be called for by the Cosi Board of Directors no later than Tuesday, November 8, 2011. The survey enabled current Cosi shareholders to share their opinion on five questions and submit comments. Results of the survey show strong alignment between BLUM Growth Fund’s proposals and shareholder desires and concerns. "The Board seems to be delaying the inevitable, costing Cosi valuable time and wasting money with its limited remaining cash position," said Blum. “The shareholders who responded to the survey agree.” "No shareholder has endorsed the current Board of Directors or feels confident in the fate of Cosi if left in their hands," said Howard Penney, a leading restaurant security analyst and Managing Partner at Hedgeye Risk Management. Eric Kuby, Chief Investment Officer at Northstar Investment Corporation in Chicago, who owns approximately one million shares, added, "We want shareholder democracy to prevail at Cosi. We believe that the BLUM Growth Fund plan is a good solution. Based on his past track record of results, we would like Brad Blum to be the chairman and CEO of Cosi. We are surprised that the Board hasn't eagerly embraced his offer, since he seems to be exactly what the doctor ordered."
SURVEY RESULTS are as follows:Q: As a Cosi Shareholder, do you have the confidence that management can make the right decisions and find the right person to be the new CEO? Yes 2_ No 93 Q: As a Cosi Shareholder, are you proud of the company's financial performance, especially compared to other major fast casual restaurants? Yes 0_ No 82 Q: As a Cosi Shareholder, are you happy with your investment and the current stock price? Yes 0_ No 81 Q: As a Cosi Shareholder, are you confident in the future of the company with the current Board of Directors? Yes 0_ No 80 Q: As a Cosi Shareholder, would you like a new CEO and Board of Directors who have communicated a plan to make the company profitable and who can create significant shareholder value? Yes 70 No 2_ A snapshot of shareholder comments: The current board seems to have no interest in providing shareholders any value for their investment. The market shows no respect for current management and how they run the company. I think there is so much potential in this brand and I hope it will be realized, but I am losing faith.
- James C. Clark
- Chas Kirsch
- Tom Cagle
- Philip & Carol Passer
- Al Wolstein
- Professional Investor & Trader