The following constitutes Amendment No. 5 (“Amendment No. 5”) to the Schedule 13D filed by the undersigned (the “Schedule 13D”). This Amendment No. 5 amends the Schedule 13D as specifically set forth herein.
Item 2. | Identity and Background. |
| Item 2 is hereby amended and restated to read as follows: |
(a) This statement is filed by:
| (i) | Western Investment Hedged Partners L.P., a Delaware limited partnership (“WIHP”); |
| (ii) | Western Investment Total Return Partners L.P., a Delaware limited partnership (“WITRP”); |
| (iii) | Western Investment LLC, a Delaware limited liability company (“WILLC”), which serves as the general partner of each of WIHP and WITRP; |
| (iv) | Arthur D. Lipson, who serves as the managing member of WILLC (together with WILLC, WIHP and WITRP, the “Western Entities”), and as nominee; |
| (v) | Benchmark Plus Institutional Partners, L.L.C., a Delaware limited liability company (“BPIP”); |
| (vi) | Benchmark Plus Management, L.L.C., a Delaware limited liability company (“BPM”), which serves as the managing member of BPIP; |
| (vii) | Robert Ferguson, who serves as a managing member of BPM (together with BPIP and BPM, the “Benchmark Entities”), and as nominee; |
| (ix) | Neil R. Chelo, as nominee; and |
| (x) | Matthew S. Crouse, as nominee. |
Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons”. Each of the Reporting Persons is party to that certain Joint Filing and Solicitation Agreement as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.
(b) The principal business address of each of WILLC, WIHP, WITRP and Messrs. Lipson and Crouse is P.O. Box 71279, Salt Lake City, Utah 84171. The principal business address of each of BPIP, BPM and Messrs. Ferguson and Chelo is 820 A Street, Suite 700, Tacoma, Washington 98402. The principal business address of Ms. Schultz is c/o Western Investment LLC, P.O. Box 71279, Salt Lake City, Utah 84171.
(c) The principal business of WILLC is acting as the general partner of each of WIHP and WITRP. The principal occupation of Mr. Lipson is acting as managing member of WILLC. The principal business of each of WIHP and WITRP is acquiring, holding and disposing of investments in various companies. The principal business of BPIP is acquiring, holding and disposing of investments in various companies. The principal business of BPM is acting as the managing member of BPIP. The principal occupation of Mr. Ferguson is acting as a managing member of BPM. The principal business of Ms. Schultz is working as a psychotherapist. The principal occupation of Mr. Chelo is serving as Director of Research at BPM. The principal occupation of Mr. Crouse is serving as Portfolio Manager at WILLC.
(d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) Messrs. Chelo, Crouse, Lipson and Ferguson and Ms. Schultz are citizens of the United States of America.
Item 3. | Source and Amount of Funds or Other Consideration. |
Item 3 is hereby amended and restated to read as follows:
The Shares purchased by WIHP, WITRP and WILLC were purchased with working capital and the Shares purchased by Mr. Lipson were purchased with personal funds (each of which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted. The aggregate purchase price of the 542,209 Shares owned directly by WIHP is approximately $4,051,177, including brokerage commissions. The aggregate purchase price of the 370,080 Shares owned directly by WITRP is approximately $2,812,633, including brokerage commissions. The aggregate purchase price of the 900 Shares owned directly by WILLC is approximately $6,867, including brokerage commissions. The aggregate purchase price of the 9,713 Shares owned directly by Mr. Lipson is approximately $79,401, including brokerage commissions.
The Shares purchased by BPIP were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted. The aggregate purchase price of the 244,245 Shares owned directly by BPIP is approximately $1,821,563, including brokerage commissions.
The 100 Shares owned by Ms. Schultz were a gift from WILLC.
Item 4. | Purpose of Transaction. |
Item 4 is hereby amended to add the following information:
On August 4, 2016, Ms. Schultz sent a letter to the Issuer requesting, pursuant to Section 1315 of the New York Business Corporations Law, a complete list of the Issuer’s shareholders and other corporate records for the purpose of communicating with the Issuer’s other shareholders in connection with the composition of the Issuer’s Board of Trustees (the “Board”), the election of trustees and the approval of certain business proposals at the Issuer’s 2016 annual meeting of shareholders (the “Annual Meeting”) and any other matters that may properly come before the meeting. Ms. Schultz also delivered a similar letter to one of the Issuer’s sister funds, Deutsche Strategic Income Trust (KST).
On August 2, 2016, the Reporting Persons filed with the SEC a preliminary proxy statement in connection with its forthcoming solicitation of proxies seeking the election of their four highly-qualified nominees to the Issuer’s Board and shareholder approval of their proposal to declassify the Board, each at the Annual Meeting.
Item 5. | Interest in Securities of the Issuer. |
Item 5 is hereby amended and restated to read as follows:
The aggregate percentage of Shares reported owned by each person named herein is based upon 22,403,562 Shares outstanding, which is the total number of Shares outstanding as of May 31, 2016, as reported in the Issuer’s Semi-Annual Report to Stockholders on Form N-CSRS, filed with the Securities and Exchange Commission on August 4, 2016.
| (a) | As of the close of business on August 4, 2016, WIHP beneficially owned 542,209 Shares. |
Percentage: Approximately 2.4%
| (b) | 1. Sole power to vote or direct vote: 542,209 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 542,209 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | The transactions in the Shares by WIHP since the filing of Amendment No. 4 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference. |
| (a) | As of the close of business on August 4, 2016, WITRP beneficially owned 370,080 Shares. |
Percentage: Approximately 1.7%
| (b) | 1. Sole power to vote or direct vote: 370,080 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 370,080 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | The transactions in the Shares by WITRP since the filing of Amendment No. 4 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference. |
| (a) | As of the close of business on August 4, 2016, WILLC directly owned 900 Shares. WILLC, as the general partner of WIHP and WITRP, may be deemed the beneficial owner of the (i) 542,209 Shares owned by WIHP and (ii) 370,080 Shares owned by WITRP. |
Percentage: Approximately 4.1%
| (b) | 1. Sole power to vote or direct vote: 913,189 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 913,189 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | WILLC has not entered into any transactions in the Shares since the filing of Amendment No. 4 to the Schedule 13D. The transactions in the Shares by WIHP and WITRP since the filing of Amendment No. 4 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference. |
| (a) | As of the close of business of August 4, 2016, Mr. Lipson directly owned 9,713 Shares. As the managing member of WILLC, Mr. Lipson may be deemed the beneficial owner of the (i) 900 Shares owned by WILLC, (ii) 542,209 Shares owned by WIHP and (iii) 370,080 Shares owned by WITRP. |
Percentage: Approximately 4.1%
| (b) | 1. Sole power to vote or direct vote: 922,902 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 922,902 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | Mr. Lipson has not entered into any transactions in the Shares since the filing of Amendment No. 4 to the Schedule 13D. The transactions in the Shares by WIHP and WITRP since the filing of Amendment No. 4 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference. |
| (a) | As of the close of business on August 4, 2016, BPIP beneficially owned 244,245 Shares. |
Percentage: Approximately 1.1%
| (b) | 1. Sole power to vote or direct vote: 244,245 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 244,245 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | The transactions in the Shares by BPIP since the filing of Amendment No. 4 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference. |
| (a) | BPM, as the managing member of BPIP, may be deemed the beneficial owner of the 244,245 Shares owned by BPIP. |
Percentage: Approximately 1.1%
| (b) | 1. Sole power to vote or direct vote: 244,245 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 244,245 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | BPM has not entered into any transactions in the Shares since the filing of Amendment No. 4 to the Schedule 13D. The transactions in the Shares by BPIP since the filing of Amendment No. 4 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference. |
| (a) | Mr. Ferguson, as a managing member of BPM, may be deemed the beneficial owner of the 244,245 Shares owned by BPIP. |
Percentage: Approximately 1.1%
| (b) | 1. Sole power to vote or direct vote: 244,245 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 244,245 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | Mr. Ferguson has not entered into any transactions in the Shares since the filing of Amendment No. 4 to the Schedule 13D. The transactions in the Shares by BPIP since the filing of Amendment No. 4 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference. |
| (a) | As of the close of business on August 4, 2016, Ms. Schultz beneficially owned 100 Shares. |
Percentage: Less than 1%
| (b) | 1. Sole power to vote or direct vote: 100 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 100 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | Ms. Schultz has not entered into any transactions in the Shares since the filing of Amendment No. 4 to the Schedule 13D. |
| (a) | As of the close of business on August 4, 2016, Mr. Chelo, did not beneficially own any Shares. |
Percentage: 0%
| (b) | 1. Sole power to vote or direct vote: 0 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 0 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | Mr. Chelo has not entered into any transactions in the Shares since the filing of Amendment No. 4 to the Schedule 13D. |
| (a) | As of the close of business on August 4, 2016, Mr. Crouse, did not beneficially own any Shares. |
Percentage: 0%
| (b) | 1. Sole power to vote or direct vote: 0 |
| 2. Shared power to vote or direct vote: 0 |
| 3. Sole power to dispose or direct the disposition: 0 |
| 4. Shared power to dispose or direct the disposition: 0 |
| (c) | Mr. Crouse has not entered into any transactions in the Shares since the filing of Amendment No. 4 to the Schedule 13D. |
The Reporting Persons, as members of a “group” for the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Each Reporting Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.
Item 6. | Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. |
Item 6 is hereby amended to add the following information:
On August 4, 2016, Ms. Schultz entered into a Joinder Agreement (the “Joinder Agreement”) to the Joint Filing and Solicitation Agreement, pursuant to which she agreed to be bound by the terms and conditions set forth therein, including, among other things, the joint filing on behalf of each of the participants of statements on Schedule 13D, and any amendments thereto, with respect to the securities of the Issuer. The Joinder Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7. | Material to be Filed as Exhibits. |
Item 7 is hereby amended to add the following:
| 99.1 | Joinder Agreement, dated August 4, 2016 |
Signature Page to KMM Schedule 13D
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: August 5, 2016 | WESTERN INVESTMENT HEDGED PARTNERS L.P. |
| | |
| By: | Western Investment LLC |
| | General Partner |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| WESTERN INVESTMENT TOTAL RETURN PARTNERS L.P. |
| | |
| By: | Western Investment LLC |
| | General Partner |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| WESTERN INVESTMENT LLC |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| |
| ARTHUR D. LIPSON, Individually and as attorney-in-fact for Matthew S. Crouse and Lynn D. Schultz |
Signature Page to KMM Schedule 13D
| BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C. |
| | |
| By: | Benchmark Plus Management, L.L.C. |
| | Managing Member |
| | |
| By: | |
| | Name: | Robert Ferguson |
| | Title: | Manager |
| BENCHMARK PLUS MANAGEMENT, L.L.C. |
| | |
| By: | |
| | Name: | Robert Ferguson |
| | Title: | Manager |
| | |
| |
| ROBERT FERGUSON, Individually and as attorney-in-fact for Neil R. Chelo |
SCHEDULE A
Transactions in the Shares Since the Filing of Amendment No. 4 to the Schedule 13D
Date of Purchase/Sale | Shares of Common Stock Purchased/(Sold) | Price Per Share($) |
|
WESTERN INVESTMENT HEDGED PARTNERS L.P. |
8/1/2016 | (13,500) | 8.5097 |
8/2/2016 | (1,400) | 8.5513 |
8/3/2016 | (100) | 8.5813 |
| | |
WESTERN INVESTMENT TOTAL RETURN PARTNERS L.P. |
8/1/2016 | (9,200) | 8.5097 |
8/2/2016 | (1,000) | 8.5513 |
8/3/2016 | (100) | 8.5813 |
| | |
BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C. |
8/1/2016 | (6,100) | 8.5081 |
8/2/2016 | (600) | 8.5346 |