SCHEDULE 14A
`(Rule 14a-101)
`INFORMATION REQUIRED IN PROXY STATEMENT
`SCHEDULE 14A INFORMATION
`PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
`THE SECURITIES EXCHANGE ACT OF 1934
`
`(Amendment No. 1 )
`
`Filed by the Registrant [ ]
`
`Filed by a Party Other than the Registrant [x]
`
`Check the Appropriate Box:
`
`[X] Preliminary Proxy Statement
`[ ] Confidential, for Use of the Commission Only (as permitted by
`Rule 14a-6(e)(2))
`[ ] Definitive Proxy Statement
`[ ] Definitive Additional Materials
`[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
`RPX CORPORATION
`(Name of registrant as specified in its charter)
`
`The Mangrove Partners Master Fund, Ltd.
`The Mangrove Partners Fund, L.P.
`The Mangrove Partners Fund (Cayman), Ltd.
`Mangrove Partners
`Mangrove Capital
`Nathaniel August
`Gilbert Palter
`Gregory Share
` (Name of person(s) filing proxy statement, if other than the registrant)
`Copies to:
`Christopher P. Davis, Esq.
`Kleinberg, Kaplan, Wolff & Cohen, P.C.
`551 Fifth Avenue, New York, New York 10176
`(212) 986-6000
`
`Payment of Filing Fee (Check the Appropriate Box):
`
`[x] No fee required.
`[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
`
`(1) Title of each class of securities to which transaction applies:
`(2) Aggregate number of securities to which transaction applies:
`(3) Per unit price or other underlying value of transaction computed pursuant to
`Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
`calculated and state how it is determined):
`(4) Proposed maximum aggregate value of transaction:
`(5) Total fee paid:
`
`[ ] Fee paid previously with preliminary materials:
`[ ] Check box if any part of the fee is offset as provided by Exchange Act
` Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by
` registration statement number, or the form or schedule and the date of its filing.
` (1) Amount Previously Paid:
`(2) Form, Schedule or Registration Statement no.:
`(3) Filing Party:
`(4) Date Filed:
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 1
`
`

`

`PRELIMINARY COPY SUBJECT TO COMPLETION DATED MAY 16 , 2016
`
`THE MANGROVE PARTNERS MASTER FUND, LTD.
`
`__________, 2016
`
`Dear Fellow Stockholder:
`The Mangrove Partners Master Fund, Ltd. and the other participants in this solicitation (collectively, "Mangrove" or "we") is one of the largest
`stockholders of RPX Corporation., a Delaware corporation ("RPX" or the "Company"), owning a total of 3,103,136 shares of Common Stock, $0.0001 Par
`Value, which represents approximately 6.0 % of the shares outstanding. We have owned shares of Common Stock since April 2015. For the reasons set forth
`in the attached Proxy Statement, we are seeking representation on the Company's Board of Directors (the "Board") because we believe the Company is
`significantly undervalued and that the current Board has not proven that it is able effectively to unlock this value. Therefore, we are seeking your support for
`the election of our three highly-qualified nominees at the annual meeting of stockholders scheduled to be held on _____ __, 2016, at _:__ _.M., local time,
`at ______________________________ (including any adjournments or postponements thereof and any meeting which may be called in lieu thereof, the
`"Annual Meeting").
`
`We have significant ongoing concerns with the Company's long-standing underperformance and management's poor track record at generating value
`for stockholders as evidenced by the stock price performance. We have expressed our concerns to, and offered to work with, management but to date they
`have only offered justifications for the current strategy and board composition. In our opinion, this attitude of not recognizing the need for improvements is a
`direct result of the current Board's failure to provide effective management oversight and apparent aversion to take the steps we believe are needed to reverse
`the Company's lackluster performance.
`
`Mangrove believes that good directors should be eager to be held accountable to the stockholders, who are the true owners of the Company. This is
`your opportunity to hold the directors accountable if you believe their performance has not met your standards. In our opinion, the Board is in need of new
`directors who are dedicated to enhancing value for the benefit of all stockholders and committed to effective management oversight. As such, we have
`nominated three highly-qualified, capable and committed individuals who have the relevant skill sets we believe are necessary to do just that.
`
`As one of the Company's largest stockholders, our interests are aligned with yours. We believe in the future potential of the Company but we have
`lost faith that the current Board has the ability to oversee a reversal of the Company's chronic underperformance. Without action on the part of the
`stockholders, we fear that the Company's stock price will continue to lag its peers and major market indices, to the detriment of all stockholders. We strongly
`believe the election of our nominees represents the best opportunity for stockholders to realize the maximum value of their investment.
`
`Accordingly, we are seeking your support for the following at the Annual Meeting:
`
`1. To elect Mangrove's three director nominees (the "Nominees") to the Board in opposition to the Company's three Class II director nominees,
`to serve until the 2019 annual meeting of stockholders or until their successors are duly elected and qualified;
`
`2. To ratify the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the fiscal year
`ending December 31, 2016; and
`
`3. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
`
`The Company has a classified Board, which is currently divided into three classes. The terms of the three Class II directors expire at the Annual
`Meeting. We now ask for your support at the Annual Meeting to elect our three highly-qualified Nominees in opposition to the Company's three Class II
`director nominees to serve until the 2019 annual meeting of stockholders. Your vote to elect our Nominees will have the legal effect of replacing three
`incumbent directors with our Nominees. If elected, our Nominees will constitute a minority on the Board and there can be no guarantee that our Nominees
`will be able to implement the actions that they believe are necessary to unlock stockholder value. However, we believe the election of our Nominees is an
`important step in the right direction for enhancing long-term value at the Company.
`
`We urge you to consider carefully the information contained in the attached proxy statement and then support our efforts by signing, dating and
`returning the enclosed WHITE proxy card today.
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 2
`
`

`

`If you have already submitted a proxy in relation to the Annual Meeting, , you have every right to revoke or change the voting instructions set out
`therein by signing, dating and returning a later dated WHITE proxy card or by voting in person at the Annual Meeting. We encourage you to do so.
`
`If you have any questions or require any assistance with your vote, please contact Morrow & Co., LLC, which is assisting us, at their address and
`toll-free numbers listed on the following page.
`
`Thank you for your support.
`
`The Mangrove Partners Master Fund, Ltd.
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 3
`
`

`

`
`
`
`
`Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
`
`The attached Proxy Statement and WHITE proxy card are available at:
`
`_____________________
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 4
`
`

`

`PRELIMINARY COPY SUBJECT TO COMPLETION DATED MAY 16 , 2016
`---------------------------
`ANNUAL MEETING OF STOCKHOLDERS
`
`OF
`RPX CORPORATION
`---------------------------
`PROXY STATEMENT
`OF
`THE MANGROVE PARTNERS MASTER FUND, LTD.
`---------------------------
`PLEASE SIGN, DATE AND MAIL THE ENCLOSED WHITE PROXY CARD TODAY
`
`The Mangrove Partners Master Fund, Ltd., together with the other participants in this proxy solicitation (collectively, "Mangrove" or "we") is one of
`the largest stockholders of RPX Corporation., a Delaware corporation ("RPX" or the "Company"), owning a total of 3,103,136 shares of Common Stock,
`$0.0001 Par Value (the "Common Stock"), which represents approximately 6.0 % of the shares outstanding. We have owned shares of Common Stock since
`April 2015. We are writing to you because we believe that the Company is significantly undervalued and that the current Board of Directors (the "Board") has
`not proven that it can unlock this value by increasing the share price for the benefit of you and all other stockholders. We have nominated three highly-
`qualified, capable and committed individuals who have the relevant skill sets we believe are key to reversing what we see as the Company's chronic
`underperformance. We are seeking your support and your vote at the annual meeting of stockholders scheduled to be held on _____ __, 2016, at _:__ _.M.,
`local time, at ______________________________ (including any adjournments or postponements thereof and any meeting which may be called in lieu
`thereof, the "Annual Meeting"), for the following:
`
`1.
`
` To elect Mangrove's three director nominees, Nathaniel August, Gilbert Palter and Gregory Share (collectively, the "Nominees") to the
`Board in opposition to the Company's three Class II director nominees, to serve as Class II directors until the 2019 annual meeting of
`stockholders or until their successors are duly elected and qualified;
`
`2. To ratify the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the fiscal year
`ending December 31, 2016; and
`
`3. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
`
`The Company has a classified Board, which is currently divided into three classes. The terms of three Class II directors expire at the Annual Meeting.
`We are seeking your support at the Annual Meeting to elect our three highly-qualified Nominees in opposition to the Company's three Class II director
`nominees to serve until the 2019 annual meeting of stockholders. Your vote to elect our Nominees will have the legal effect of replacing three incumbent
`directors with our Nominees. If elected, our Nominees will constitute a minority on the Board and there can be no guarantee that our Nominees will be able to
`implement the actions that they believe are necessary to unlock stockholder value. However, we believe the election of our Nominees is an important step in
`the right direction for enhancing long-term value at the Company.
`
`Mangrove is composed of The Mangrove Partners Master Fund, Ltd., a Cayman Islands exempted company (the "Master Fund"), The Mangrove
`Partners Fund, L.P., a Delaware limited partnership (the "US Feeder"), The Mangrove Partners Fund (Cayman), Ltd., a Cayman Islands exempted company (the
`"Cayman Feeder"), Mangrove Partners, a Cayman Islands exempted company ("Mangrove Partners"), Mangrove Capital, a Cayman Islands exempted
`company ("Mangrove Capital") and the Nominees.
`
`This Proxy Statement and the enclosed WHITE proxy card are first being furnished to stockholders on or about [ ], 2016.
`
`As of the date hereof, Mangrove collectively owns an aggregate of 3,103,136 shares of Common Stock. We intend to vote such shares of Common
`Stock FOR the election of our Nominees and FOR the ratification of the selection of PricewaterhouseCoopers LLP as the Company's independent registered
`public accounting firm for the fiscal year ending December 31, 2016.
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 5
`
`

`

`The Board has fixed [ ], 2016 as the record date for determining holders of Common Stock who are entitled to vote at the Annual Meeting (the
`"Record Date"). According to the Company, as of the Record Date the Company had approximately [ ] shares of Common Stock outstanding and entitled to
`be voted. Each share of Common Stock entitles the record holder to one vote on each matter to be voted upon at the Annual Meeting. The mailing address of
`the principal executive offices of the Company is One Market Plaza, Suite 800, San Francisco, CA 94105. Stockholders of record at the close of business on
`the Record Date will be entitled to vote at the Annual Meeting.
`
`THIS SOLICITATION IS BEING MADE BY MANGROVE AND NOT ON BEHALF OF THE BOARD OF DIRECTORS OR MANAGEMENT OF THE
`COMPANY. WE ARE NOT AWARE OF ANY OTHER MATTERS TO BE BROUGHT BEFORE THE ANNUAL MEETING OTHER THAN AS SET FORTH IN
`THIS PROXY STATEMENT. SHOULD OTHER MATTERS, WHICH WE ARE NOT AWARE OF A REASONABLE TIME BEFORE THIS SOLICITATION,
`BE BROUGHT BEFORE THE ANNUAL MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED WHITE PROXY CARD WILL VOTE ON
`SUCH MATTERS IN THEIR DISCRETION.
`
`MANGROVE URGES YOU TO SIGN, DATE AND RETURN THE WHITE PROXY CARD IN FAVOR OF THE ELECTION OF OUR NOMINEES.
`
`IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY COMPANY MANAGEMENT OR THE BOARD, YOU MAY REVOKE THAT
`PROXY AND VOTE ON EACH OF THE PROPOSALS DESCRIBED IN THIS PROXY STATEMENT BY SIGNING, DATING AND RETURNING THE
`ENCLOSED WHITE PROXY CARD. WE ENCOURAGE YOU TO DO SO. THE LATEST DATED PROXY IS THE ONLY ONE THAT COUNTS. ANY
`PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A
`LATER DATED PROXY FOR THE ANNUAL MEETING OR BY VOTING IN PERSON AT THE ANNUAL MEETING.
`
`Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
`
`This Proxy Statement and our proxy card are available at:
`
`____________________
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 6
`
`

`

`
`
`IMPORTANT
`
`Your vote is important, no matter how many or how few shares of Common Stock you own. Your vote matters. Mangrove urges you to sign,
`date, and return the enclosed WHITE proxy card today to vote FOR our Nominees.
`
`If you are a "registered stockholder, " please sign and date the enclosed WHITE proxy card and return it to Mangrove, c/o Morrow & Co., LLC, in
`the enclosed postage-paid envelope today.
`
`If you own shares in a brokerage account or through a bank, you are considered a "beneficial stockholder, " and the Mangrove proxy materials,
`together with a voting instruction form (VIF), are being forwarded to you by your broker or bank. As a "beneficial owner," you must instruct your
`broker, trustee or other representative on how to vote your shares. Your broker cannot vote your Shares on your behalf without receiving
`instructions from you.
`
`Depending upon your broker or custodian's voting policy, you may be able to vote either by toll-free telephone or by using the Internet. Please
`refer to the enclosed voting form for instructions on how to vote electronically. You may also vote by signing, dating and returning the enclosed
`voting form in the pre-paid envelope provided to you.
`
`Please do not sign or return any {COLOR} proxy card you may receive from the Company. If you have already submitted a {COLOR} proxy card,
`you have every right to change your vote — please use the WHITE proxy card to vote by Internet or telephone or simply sign, date and return the
`WHITE proxy card. Only your latest dated proxy will be counted.
`
` ●
`
` ●
`
` ●
`
` ●
`
`
`
`
`
`
`
`
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 7
`
`

`

`
`
`
`BACKGROUND TO THE SOLICITATION
`
`A chronology of our interactions with the Company is as follows:
`
`·
`
`·
`
`·
`
`·
`
`·
`
`·
`
`·
`
`·
`
`·
`
`·
`
`Mangrove made its first investment in the Company on April 20, 2015.
`
`On March 3, 2016, representatives of Mangrove met with the John A. Amster, the Company's Chief Executive Officer. Mangrove voiced its
`displeasure with, among other things, the Company's acquisition of Inventus and its excessive employee compensation.
`
`On March 10, 2016, the Master Fund delivered a letter (the "Nomination Letter") to the Company nominating the Nominees for election to
`the Board at the Annual Meeting.
`
`On March 17, 2016, we delivered a letter to the Board outlining our perspective with respect to the performance and strategy of the
`Company. In the letter, we detailed what we view as the failings of the Company that have resulted in the Company's negative performance.
`In the letter, we also outlined ways in which we believe the Company can create significant stockholder value.
`
`On March 21, 2016, we delivered to the Company a letter demanding, pursuant to Section 220 of the Delaware General Corporation Law,
`inspection of certain of the Company's books and records (the "Original Demand").
`
`On March 29, 2016, we received a response from the Company stating that it would not comply with portions of the Original Demand.
`
`On April 7, 2016, representatives of Mangrove met with representatives of the Company to discuss Mangrove's concerns about how poorly
`the Company has been run.
`
`On April 8, 2016, we delivered to the Company a revised letter demanding, pursuant to Section 220 of the Delaware General Corporation
`Law, inspection of certain of the Company's books and records (the "Revised Demand").
`
`On April 14, 2016, we held a conference call with three members of the Board to further discuss our concerns and the Board composition.
`Throughout the call, those members of the Board not only failed to acknowledge the Company's poor track record, they defended
`management's decisions as "good" ones.
`
`On April 14, 2016, the Company, through counsel, notified us that it was disputing that we had a proper purpose to make the Revised
`Demand and that it believes the documents sought in the Revised Demand are outside the scope of a proper demand for books and records
`under Section 220 of the Delaware General Corporation Law.
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 8
`
`

`

`REASONS FOR THE SOLICITATION
`
`WE BELIEVE NEW REPRESENTATION IS NEEDED ON THE BOARD NOW
`
`We strongly believe the Company's current strategy is flawed and has been poorly executed. We think that the Board and management have failed
`stockholders in the following areas:
`
`·
`
`Poor Capital Allocation and Poor Use of Available Cash;
`
`Wasteful and Excessive Spending on Questionable Growth Projects and Employee Compensation;
`
`Stagnant Core Business Growth; and
`
`Poor and Insular Corporate Governance.
`
`Mangrove believes these failures have negatively affected all stockholders. They are reflected in both the in [ 48 ]% decline in stock price since the
`Company's IPO and the Company's significant underperformed as compared to both the Russell 2000 Index and its self-identified peers over that same time
`period:
`
`·
`
`·
`
`·
`
`RPX STOCK AS COMPARED TO RUSSELL 2000 INDEX
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 9
`
`

`

`RPX STOCK COMPARED TO PEERS1
`
`
`
`Yet, despite stock performance that speaks volumes by itself, management has actually defended its performance instead of acknowledging its
`failures and the impact such failures have had on stockholders. Making matters worse, this Board has been a seemingly perfect complement to management,
`making no visible changes to the Company's strategy. In our opinion, there needs to be a new assessment of the Company's current strategy to determine
`whether the Company's issues are being addressed and a commitment from the Board to provide effective oversight of management moving forward. We
`believe that with the election of our Nominees, the Board will be better positioned to begin the process of reversing the Company's chronic
`underperformance.
`
`Poor Capital Allocation and Poor Use of Available Cash;
`
`Central to management's missteps is the purchase of Inventus Solutions Inc. ("Inventus"), which increasingly appears to be a costly mistake. Not only
`did the Company purchase Inventus for 12.7x its 2015 Adjusted Pro-forma EBITDA, but it also did so when the Company was trading at only 1.6x its 2015
`EBITDA. Moreover, we believe that Inventus had negligible organic revenue growth in 2015 after stripping out the effect of acquisitions.
`
`In the last five years, the Company has generated over $165 million of free cash flow yet it has paid no dividends to stockholders and repurchased
`only $26 million of stock. Instead of returning cash to stockholders, the Company has hoarded cash, using it to make , acquisitions that in our opinion were
`expensive . Given management's poor track record of generating value for stockholders and poor capital allocation, we question whether they are the best
`managers of the Company's financial resources. We believe that a far more effective strategy would be to return some of this cash to stockholders. Based on
`the Company's subscription-based business, we believe a moderately leveraged balance sheet of 2.0-2.5x net debt/EBITDA should be targeted over the
`medium term. Over the next three years, we believe that the Company can return over $800 million to stockholders considering the Company's likely cash
`generation, its current cash balance, and its capacity for incremental debt.
`
`Wasteful and Excessive Spending on Questionable Growth Projects and Employee Compensation
`
`The Company has been investing substantial sums in "growth" projects that appear to have little chance of ever being profitable. For example, based
`on our conversations with management, we believe that there is the equivalent of approximately 20 full time employees dedicated to insurance-related
`efforts. We also estimate that there is the equivalent of another 20 full-time employees dedicated to other speculative projects such as creating a B2B
`marketplace or clearinghouse for patents. We estimate, based on the average compensation of employees at the Company, that these pet projects cost
`stockholders approximately $16 million annually. Despite these significant costs, we see no evidence that these projects have produced anything other than
`minimal revenues.
`
` The peer group is made up of peers identified by the Company consisting of financial services, technology and patent licensing companies with
`revenue less than $350 million at the time the Company conducted its peer group analysis. The group includes the following companies: Cohen & Steers,
`Inc., Cowen Group, Inc., Financial Engines, Inc., Greenhill & Co., Inc., Hercules Technology Growth Capital Inc., HFF, Inc., MarketAxess Holdings, Inc.,
`Virtus Investment Partners Inc., Aspen Technology, Inc., Dice Holdings, Inc., Ebix Inc., Epiq Systems, Inc., RealPage, Inc., SolarWinds, Inc., Acacia Research
`Corporation, CEVA, Inc., DTS, Inc., InterDigital, Inc., Rambus Inc., RealD Inc. and Tessera Technologies, Inc.
`
` 1
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 10
`
`

`

`Based on our estimates for employee compensation, which includes share-based compensation, we estimate that the average Company employee
`earned approximately $400,000 in 2015. This is clearly excessive. We believe that the Company should refocus on its core business and reduce non-core
`employees. Further, we believe the Company should be replacing departing employees with less expensive hires in other geographies by opening a satellite
`office in a less expensive locale or even relocating the headquarters.
`
`Stagnant core business growth
`
`The Company's core subscription revenue growth has steadily slowed from 21% in 2013 to nearly 0% in 2016, based on the midpoint of the
`Company's guidance. Needless to say, this is unacceptable. We believe this is due primarily to a lack of focus on growing the Company's core, profitable
`business. As mentioned above, we believe far too much of the Company's resources are being misallocated. Cost savings from prudent reductions in
`employee compensation and the elimination of unnecessary strategic projects should be reinvested in reversing the downward trend in the Company's core
`business.
`
`Poor and insular corporate governance
`
`Mangrove believes the Company should improve its good corporate governance practices, which Mangrove believes are poor. In 2015, Institutional
`Shareholder Services Inc. ("ISS"), a leading proxy advisory firm, assigned the Company a low corporate governance rating of eight on a scale of one to ten,
`with ten being the worst possible rating. We believe this poor rating from an independent governance rating source speaks volumes about the need for
`immediate governance improvements at the Company.
`
`OUR THREE NOMINEES HAVE THE EXPERIENCE AND QUALIFICATIONS NECESSARY TO FULLY EXPLORE AVAILABLE
`OPPORTUNITIES TO UNLOCK VALUE FOR STOCKHOLDERS AND ARE COMMITTED TO HOLDING MANAGEMENT ACCOUNTABLE FOR
`THE COMPANY'S PERFORMANCE
`
`We have identified three highly-qualified, independent directors with relevant business and financial experience who we believe will bring a fresh
`perspective to the Board and would be valuable in assessing and executing on initiatives to unlock value at the Company. Each meets the relevant
`independence standards established by Nasdaq. Further, our nominees would be committed to holding management accountable for the Company's
`performance.
`
`Nathaniel August is the founder and President of Mangrove Partners. Prior to founding Mangrove Partners in 2010, Mr. August was a Director at
`White Eagle Partners, a global, value-oriented investment advisory firm, and previously served as a Senior Analyst at Brahman Capital Partners, a long/short
`equity strategy hedge fund, as an Investment Analyst at K Capital Partners, a private investment firm, and an Analyst at Goldman Sachs in the Principal
`Investment Area
`
`Gilbert S. Palter has a 20-year track record of value creation in private equity as the Co-Founder, Chief Investment Officer & Managing Partner of
`EdgeStone Capital Partners ("EdgeStone"). In 1999 Mr. Palter co-founded EdgeStone, one of Canada's leading independent private capital managers with in
`excess of $2 billion of capital commitments for its private equity, mezzanine debt, and venture capital funds. He has extensive experience serving on Boards
`of Directors, including presently serving as a member of the Board of Directors of Atlantic Power Corporation (NYSE: AT), a power generation and
`infrastructure company with a portfolio of assets in the United States and Canada, since June 2015.
`
`Gregory Share has nearly twenty years of private equity experience, most recently leading software and financial services investing at Moelis
`Capital Partners, a mid-market private equity fund, where he was a Partner and Investment Committee Member. Prior to joining Moelis, Mr. Share served as a
`Managing Director of Fortress Investment Group. At Fortress he originated, led and monitored private equity investments in North America and Europe.
`Before joining Fortress, Mr. Share was a Vice President at Madison Dearborn Partners.
`
`IPR2015-01046
`Mangrove Partners Master Fund Ltd. & Apple Inc. v. VirnetX Inc.
`IPR2015-01047
`Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp IP, LLC v. VirnetX Inc.
`Exhibit 1052, page 11
`
`

`

`PROPOSAL NO.1
`
`ELECTION OF DIRECTORS
`
`The Board is currently comprised of eight directors divided into three classes with staggered three-year terms. There are currently two directors in
`Class I, three directors in Class II and three directors in Class III. The term of office of the Company's Class II directors will expire at the Annual Meeting. The
`term of office of the Class III directors will expire at the 2017 annual meeting of stockholders and the term of office of the Class III director will expire at the
`2018 annual meeting of stockholders. We are seeking your support at the Annual Meeting to elect our highly-qualified Nominees in opposition to the
`Company's three Class II director nominees. Your vote to elect our Nominees will have the legal effect of replacing three incumbent directors of the
`Company. If elected, our Nominees will represent a minority of the members of the Board and therefore it is not guaranteed that they will have the ability to
`enhance stockholder value.
`
`Our Nominees:
`
`Nathaniel August, age 37, is the founder and President of Mangrove Partners. Prior to founding Mangrove Partners in April 2010, Mr. August was a
`Director at White Eagle Partners, a global, value-oriented investment advisory firm, from December 2008 to January 2010. Previously he served as a Senior
`Analyst at Brahman Capital Partners, a long/short equity strategy hedge fund, from March 2006 to September 2008, an Investment Analyst at K Capital
`Partners, a private investment firm, from June 2003 to January 2006, and an Analyst at Goldman Sachs in the Principal Investment Area from July 2001 to
`May 2003. Mr. August received his bachelor's degree from Brown University. Mangrove believes that Mr. August will be a valuable asset to the Board given
`his extensive background in financial analysis and broad understanding of the operational, financial and strategic issues facing public companies.
`
`Gilbert S. Palter, age 50, has a 20-year track record of value creation in private equity as the Co-Founder, Chief Investment Officer & Managing
`Partner of EdgeStone Capital Partners ("EdgeStone"). In 1999 Mr. Palter co-founded EdgeStone, one of Canada's leading independent private capital
`managers with in excess of $2 billion of capital commitments for its private equity, mezzanine debt, and venture capital funds. He has extensive experience
`serving on Boards of Directors, including presently serving as a member of the Board of Directors of Atlantic Power Corporation (NYSE: AT), a power
`generation and infrastructure company with a portfolio of assets in the United States and Canada, since June 2015. Mr. Palter was a recipient of the Ernst &
`Young Entrepreneur of the Year Award in 2006. Mr. Palter has an MBA from Harvard Business School and earned a B.Sc. degree in computer science and
`economics from the University of Toronto. Mangrove believes that Mr. Palter's over twenty years of financial and operations experience and public and
`private company board experience will make him a valuable addition to the Board.
`
`Gregory Share, age 42, is an independent investor focused on investments in software and financial services companies. Mr. Share has nearly twenty
`years of private equity experience, most recently leading software and financial services investing at Moelis Capital Partners, a mid-market private equity
`fund, where he was a Partner and Investment Committee Member from August 2008 until February 2015. Prior to joining Moelis, Mr. Share served as a
`Managing Director of Fortress Investment Group from 2003 to 2008. At Fortress he originated, led and monitored private equity investments in North
`America and Europe. Before joining Fortress, Mr. Share was a Vice President at Madison Dearborn Partners from 1998 until 2003. He started his investment
`career at Lazard Freres in New York. Mr. Share earned a B.S. degree in Economics from the University of Pennsylvania, The Wharton School and attended
`Northwestern University, Kellogg School of Management. Mangrove believes that Mr. Share's extensive financial and investment experience will allow him
`to provide valuable advice and guidance to the Board.
`
`Messrs. August and Share are citizens of the United States of America. Mr. Palter is a cit