New Frontier Media Settles Proxy Contest, Related Litigation

7/12/2012 7:55 PM ET

New Frontier Media, Inc. (NOOF: Quote) said Thursday that it has entered into a settlement agreement with Longkloof Ltd., Hosken Consolidated Investments Ltd. and various associated parties to end Longkloof's proxy contest related to New Frontier Media's 2012 annual shareholder meeting.

The settlement also ends the related litigation between the New Frontier Media and the Longkloof parties that was pending in the U.S. District Court for the District of Colorado.

Under the terms of the settlement agreement, the Longkloof parties, which beneficially own in the aggregate approximately 15.9% of New Frontier Media's outstanding shares, have agreed to immediately terminate their proxy contest, withdraw their notice of intent to nominate four candidates for election to New Frontier Media's Board, and not support, for the balance of 2012, any other person not recommended by New Frontier Media's Board in seeking representation on the company's Board.

In addition, the Longkloof parties have agreed to certain standstill restrictions through December 31, 2012 and New Frontier Media has agreed that if the company does not engage in a sale, merger or similar change of control transaction by December 31, 2012, Longkloof will have the right to designate one person for appointment to New Frontier Media's Board for a term expiring at the 2013 annual meeting of shareholders and, under certain circumstances, New Frontier Media will be obligated to include such designee on the slate of nominees presented by the company to shareholders at the 2013 annual meeting of shareholders.

New Frontier Media also said a special committee of its board is proceeding with its previously announced comprehensive strategic alternatives review process, which includes a potential sale of the company, in a timely and orderly manner and that it will complete the process in due course.

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by RTT Staff Writer

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