On April 3, 2023, Turtle Beach Corporation (“Turtle Beach” or the “Company”) delivered a counter-proposal to Immersion Corporation (NASDAQ: IMMR, “Immersion”) in response to a verbal settlement proposal received from Immersion on March 26, 2023. Immersion’s proposal contemplated, among other things, that the Company’s Board of Directors (the “Board”) would reduce its size to six directors, with two of the remaining directors to be designated by Immersion.
In various correspondence, Turtle Beach has reiterated its willingness to engage constructively with Immersion on its proposal, including appointing new Board members and reducing the size of the Board. Furthermore, the Company proactively offered to extend the nomination deadline for the 2023 annual meeting of shareholders to provide additional time for the parties to reach a resolution. To enable the Board to evaluate Immersion’s proposal, the Board requested a meeting with Immersion to understand its plans with respect to the Company. The meeting was clearly communicated to Immersion as a prerequisite to the Board’s providing a constructive response to its proposal. The meeting subsequently occurred on April 1, 2023 and was attended by three Turtle Beach directors and representatives of Immersion. During the meeting, Immersion was unable or unwilling to describe how its nominees would add value for shareholders. Nevertheless, on April 2, 2023, Turtle Beach indicated to Immersion that it would be sending a counter-proposal in an effort to reach a mutually agreeable outcome and avoid an unnecessary and costly proxy contest.
Despite Turtle Beach’s efforts to engage with Immersion, its voluntary extension of the nomination deadline and its commitment to sending a counter-proposal, Immersion mischaracterized the April 1, 2023 meeting in its arguably voluntary Schedule 13D amendment filed on April 3, 2023. In the same filing, Immersion also stated its intent to nominate candidates and wage a costly proxy fight even though it had previously stated that the Company should not waste capital on a proxy fight.
On April 3, 2023, Turtle Beach Corporation delivered a counter-proposal to Immersion stating that the Company was open to, among other things:
| | • | | Appointing one of Immersion’s nominees to the Board, subject to the typical due diligence process run by the Board’s Nominating and Governance Committee; |
| | • | | Reducing the size of the Board to seven members, with two directors to step down as soon as practicable upon the appointment of Immersion’s nominee and an additional incumbent director to step down within one year; and |
| | • | | Considering, if the reconstituted Board determines it is appropriate, the formation of a committee to review value enhancing opportunities. |
The proposed Board changes would be in addition to the appointment of five new members to the Board since June 2022.
The Board stands ready and willing to engage with Immersion to move beyond this matter and return its full attention to overseeing the Company’s operations and creating value for shareholders. The Board is steadfast in its commitment to serving the best interests of all Turtle Beach shareholders as it works to reach a mutually agreeable resolution with Immersion, and does not believe that giving Immersion, which has only recently become a meaningful shareholder and owns only 7% of the Company’s stock, one-third of the Board seats would be acceptable to the remainder of Turtle Beach’s shareholders.
