Elah (ELLH) DEFA14A Additional proxy soliciting materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Securities Exchange Act of 1934,

as amended

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SIGNATURE GROUP HOLDINGS, INC.
(Name of Registrant as Specified in Its Charter)
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Supplemental Information

July 2012

PRIVATE AND CONFIDENTIAL

CAUTIONARY STATEMENT

This

presentation

may

contain

certain

“forward-looking

statements”

within

the

meaning

of

the

Private

Securities Litigation Reform Act of 1995, including statements with regard to the future performance of

Signature

Group

Holdings,

Inc.

(“Signature”

or

the

“Company”).

Words

such

as

“believes,”

“expects,”

“projects,”

“anticipates,”

and

“future”

or

similar

expressions

are

intended

to

identify

forward-looking

statements.  These forward-looking statements are subject to the inherent uncertainties in predicting

future results and conditions.  Certain factors could cause actual results to differ materially from those

projected

in

these

forward-looking

statements,

and

such

factors

are

identified

from

time

to

time

in

our

filings with the Securities and Exchange Commission (“SEC”).  Pursuant to the Private Securities

Litigation Reform Act of 1995, Signature undertakes no obligation to publicly update or revise any

forward-looking statements, whether as a result of new information, future events or otherwise.

No

representation

or

warranty,

express

or

implied,

is

made

as

to

the

accuracy

or

completeness

of

the

information contained herein, and nothing shall be relied upon as a promise or representation as to the

future of the Company.

For more specific financial information please refer to the Company’s Annual Report on form 10-K for

the year ended December 31, 2011, the Quarterly Report on form 10-Q for the quarter ended March,

31, 2012  and other SEC filings.

2

PRIVATE AND CONFIDENTIAL

SETTING THE RECORD STRAIGHT

Focused approach with heavy emphasis on unlocking the value of the NOL’s

Opportunistically considers acquisitions of strong operating businesses that will be accretive to earnings

for Signature

–

NABCO is a great business, is evidence of our strategy being successfully implemented and has

brought the Company closer to profitability

Takes advantage of relationships with multiple investment banking firms as well as connections that

have been established with management over the last 20 years

Large acquisitions have been and continue to be evaluated, such initiatives are precisely why an increase

in authorized shares is being sought by the Company

The infrastructure to manage a diverse platform of companies with our criteria requires only minimal

resources at the corporate headquarters

3

Signature’s Plan

PRIVATE AND CONFIDENTIAL

SETTING THE RECORD STRAIGHT

McIntyre’s “So Called Plan”

McIntyre has not provided a detailed comprehensive plan to the stockholders

–

His plan is filled with hopes and promises but lacks comprehension

–

An unnamed interim CEO, coupled with a recruiting project to find a long term candidate,  und

uncertain economic terms or conditions that could be demanded, will likely result in corporate

instability and uncertainty for stockholders

–

Lack of senior level or executive management brings additional uncertainty to the organization

–

Legacy matters don’t just go away with a new management team

Exclusive

relationship

with

an

investment

bank

is

not

in

the

best

interest

of

the

stockholders

–

Mr. Peiser proposed a similar strategy while serving as a director,  management and a majority of

the Board thought it was costly, limiting, and unnecessary

–

Would

have

required

the

Company

to

pay

a

$250,000

engagement

fee

that

would

not

be

applied

against the substantial success fees contemplated in the contract

–

Investment bankers interests are not necessarily aligned with Company and stockholder interests

4

“Urgency”

as stated by McIntyre, while sourcing of a large transaction often times leads to overpaying

and settling

PRIVATE AND CONFIDENTIAL

SETTING THE RECORD STRAIGHT

Net Operating Loss Carryforward

The Company’s business strategy heavily emphasizes and contemplates the utilization of this asset

The federal NOL’s have a 20 year life, they do not deteriorate over time

5

–

This

claim

is

disingenuous

on

McIntyre’s

part

and

his

“plan”

would

not

receive

a

different

accounting treatment

The disclosures in the Company’s 10K and 10Qs are required by our public accounting firm

and serve to protect the Company

Contrary to McIntyre’s assertions, the valuation allowance established against the NOL’s in the

Company’s

financial

statements

is

based

on

required

accounting

treatment

under

GAAP

and

is

not

a function of the business plan

The Company has and will continue to aggressively protect the asset to ensure maximum

utilization

PRIVATE AND CONFIDENTIAL

SETTING THE RECORD STRAIGHT

The resignations of Blitzer and Peiser were positive for the Company as their presence on the board was

disruptive

McIntyre previously recommended our nominee Ed Lamb as an independent director, he was brought

on in 2011 and now serves as Chairman of the Audit Committee

–

Mr.

Lamb

successfully

oversaw

the

completion

of

nine

SEC

filings

during his tenure as Audit

Committee Chairman in a thirteen month period and abandoned the use of external counsel

Mr. Tinkler is the epitome of an independent director

–

He is an executive of a firm that is a 4.9% stockholder in the Company

–

Maintains extensive expertise in companies with unique tax attributes and significant legacy

challenges

–

He has no affiliation with Signature management

The current board set their personal financial interests aside to put forth the best slate possible for

stockholders

6

The Board of Directors

PRIVATE AND CONFIDENTIAL

SETTING THE RECORD STRAIGHT

The 2007 rights agreement established while McIntyre was Chairman is appropriate and serves to

protect the NOL’s and stockholders

The potential usage of the rights agreement was not a threat as indicated by McIntyre, it was a response

to

his

formation

of

a

“group”

with

Kingstown

Capital

that

the

Board

believed

could

jeopardize

the

NOL’s

and needed time to examine

The litigation associated with the rights agreement was initiated by McIntyre and Kingstown; the

Company is a defendant seeking to protect the NOL’s

Contrary to McIntyre’s assertion, former President, Ken Grossman, is not the beneficial owner of 5% of

the stock under Section 382 of the IRS Code or for the SEC’s Schedule 13D (Required Notification for 5%

Stockholders)

The Company has operated appropriately, with strong corporate governance and within the confines of

the SEC while it was bringing itself current with its filings, we are now able to hold annual meetings and

have quarterly earnings calls

Mr. McIntyre’s assertions regarding the Company’s Governance are inaccurate

The Company has previously published accurate information regarding Governance

7

Stockholder Rights Agreement

Corporate Governance

PRIVATE AND CONFIDENTIAL

SETTING THE RECORD STRAIGHT

McIntyre Nominee and Former Director, Robert Peiser

In 2010 as a Director, Peiser earned more than the Company’s CEO

Compensation

Mr. McIntyre continues to make erroneous assertions regarding managements overall compensation

We have previously published accurate information regarding compensation

8

Peiser advocated and voted for Director compensation packages that he now opposes as a participant

in the McIntyre Slate

Mr. Peiser requested and received $35,000 in supplemental Audit Committee Chairman fee and

then proced to outsource a significant portion of his decision making responsibilities to an external

counsel costing the Company in excess of $200,000

Mr. McIntyre has made no reference in his filings relating to the compensation levels he would

pay a new management team