UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a)
of
the Securities Exchange Act of 1934
Filed
by
the Registrant ¨
Filed
by
a Party other than the Registrant x
Check
the
appropriate box:
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¨
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Preliminary
Proxy Statement
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¨
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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x
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Soliciting
Material Pursuant to Section
240.14a-12
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CLST
Holdings, Inc.
(Name
of Registrant as Specified In Its Charter)
Timothy
S. Durham
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1) |
Title
of each class of securities to which transaction applies:
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(2) |
Aggregate
number of securities to which transaction applies:
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(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 was determined):
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(4) |
Proposed
maximum aggregate value of transaction:
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Fee
paid previously with preliminary materials.
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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.
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(1) |
Amount
Previously Paid:
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(2) |
Form,
Schedule or Registration Statement No.:
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On
May
18, 2007, Dale V. Kesler, chairman of the Board of Directors of CLST Holdings,
Inc. (the “Issuer”) sent a letter (the “Board Letter”) to stockholders of the
Issuer (the “Stockholders”) addressing, among other things, the nomination of
directors at the upcoming annual meeting of Stockholders. The letter was filed
as Exhibit 99.1 to the Issuer’s current report on Form 8-K, filed May 18,
2007.
In
response to the Board Letter, on May 18, 2007, counsel for Timothy S. Durham
(“Mr. Durham”) sent a letter (the “Durham Letter”) addressed to the chairman of
the board of directors of the Issuer, Dale V. Kesler. The Durham Letter is
attached as Exhibit 1 hereto.
During
the course of conversations with other Stockholders, Mr. Durham has expressed,
and may continue to express, the view that the best interests of the
Stockholders would be served by the immediate election of Mr. Durham and Mr.
Brian Ladin to the Board of Directors of the Issuer to fill vacancies thereon,
to serve, along with Mr. Robert Kaiser, a current member of the board of
directors, as the entire board of directors until such time as a board of
directors can be duly elected and qualified at an annual meeting of
Stockholders. Also during certain of those conversations and meetings, Mr.
Durham has encouraged, and may continue to encourage, other Stockholders to
communicate to the Issuer their views regarding the composition of the board
of
directors of the Issuer pending the holding of an annual meeting.
SECURITY
HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED
TO
SOLICITATION OF PROXIES BY MR. DURHAM AND HIS AFFILIATES FROM THE STOCKHOLDERS,
FOR USE AT ITS ANNUAL MEETING WHEN AND IF THEY BECOME AVAILABLE, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE
PARTICIPANTS IN ANY SUCH PROXY SOLICITATION. WHEN AND IF COMPLETED, A DEFINITIVE
PROXY STATEMENT AND A FORM OF PROXY WHICH WILL BE MAILED TO STOCKHOLDERS OF
THE
ISSUER, AND WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE
COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV.
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Press
Release and Lawsuit
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On
May
29, 2007, Mr. Durham issued the following:
May
29, 2007
Timothy
S. Durham of Obsidian Enterprises, Inc. and a major stockholder of CLST
Holdings, Inc., formerly known as CellStar Corporation, (the "Company") filed
a
lawsuit May 25, 2007 in Delaware Chancery Court against the Company seeking
an
order pursuant to Section 211 of the Delaware General Corporation Law compelling
the Company to hold an annual meeting of stockholders. In his lawsuit, Mr.
Durham alleges that the Company has failed to hold an annual meeting of
stockholders since November 5, 2004 and has asked the Chancery Court
to:
(1)
order
the Company to immediately hold an annual meeting of stockholders at which
all
seats on the Board of Directors shall stand for election; and (2) designate
the
record date, meeting date, time and place of the meeting; and (3) appoint a
special master to conduct the meeting; and (4) award Mr. Durham his attorney's
fee and expenses.
SECURITY
HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED
TO
ANY SOLICITATION OF PROXIES BY MR. DURHAM AND HIS AFFILIATES FROM THE
STOCKHOLDERS FOR USE AT ANY ANNUAL MEETING WHEN AND IF THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING
TO THE PARTICIPANTS IN ANY SUCH PROXY SOLICITATION. WHEN AND IF COMPLETED,
A
DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE MADE AVAILABLE TO
STOCKHOLDERS OF CLST HOLDINGS, INC., AND WILL BE AVAILABLE AT NO CHARGE AT
THE
SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV
Obsidian
Enterprises, Inc.
CONTACT:
Timothy Durham, CEO of Obsidian Enterprises, Inc.,
+1-317-237-4055,
tsdurham@msn.com
EXHIBIT
1
May
18,
2007
Via
E-mail and Hand Delivery
Dale
V.
Kesler
Chairman
of the Board of Directors
CLST
Holdings, Inc.
601
S.
Royal Lane
Coppell,
Texas 75019
Dear
Mr.
Kesler:
As
you
know, we represent Timothy S. Durham, a substantial stockholder of CLST
Holdings, Inc. We are in receipt of your letter dated May 17, 2007 addressed
to
our client and others, which was delivered to us by electronic mail this morning
(the “May 17 Letter”).
Our
client is disappointed that the Board has placed conditions on stockholder
participation in the director nominating process that are not present in the
corporation’s Bylaws, Certificate of Incorporation or applicable law.
Effectively, the Board has precluded meaningful participation by stockholders
in
the nominating process unless those stockholders can prove to the Board’s
satisfaction that, among other things, election results in their favor are
a
forgone conclusion. Our client believes that this is unfortunate and a breach
of
the fiduciary duties of participating members of the Board of
Directors.
Our
client also notes the fourth numbered paragraph of your letter referring to
the
views of Grant Thornton, the Company’s auditors. Specifically, that paragraph
states as follows:
“4.
Grant
Thornton, the Company’s auditors, have indicated some concern and uncertainty
about continuing as the Company’s auditors if a new Board is elected. The
nominees should explain how they would address this issue, which could
conceivably cause a delay in SEC filings.”
So
that
our client may understand and possibly address the concerns of Grant Thornton,
please provide us immediately with copies of all written communications, and
written summaries of all oral communications, between Grant Thornton and members
of the Company’s Board of Directors or management in which Grant Thornton
indicates “some concern and uncertainty about continuing as the Company’s
auditors if a new Board is elected.” Please also immediately provide us with all
written communications, and written summaries of all oral communications,
indicating the persons who Grant Thornton prefers be members of the Board of
Directors of the Company, together with an explanation of why Grant Thornton
believes those persons are suited to be members of the Board of Directors.
Finally, please immediately provide us with copies of all written communications
and written summaries of all oral communications between the Company or its
representatives, including members of the Board of Directors and officers and
employees of the Company, and Grant Thornton relating to the make up of the
Board of Directors or which seek to influence Grant Thornton’s opinion of our
client or other prospective nominees for the Board of Directors.
In
order
that our client may understand and address the Board’s new requirements for
stockholder participation in the process of nominating candidates for election
to the Board of Directors, please immediately provide us with minutes of the
meetings at which the procedures outlined in the May 17 Letter were adopted,
together with copies of all management recommendations, briefing books and
other
materials received or considered by the Board of Directors in connection
therewith.
The
foregoing information is necessary to permit our client to participate in the
nomination and election of directors under applicable law and under the
requirements established by the Board in the May 17 Letter. Please respond
immediately to this letter regarding whether the Company will immediately
cooperate with the foregoing demands. Absent that immediate cooperation, our
client intends to make a demand under Section 220 of the Delaware General
Corporation Law for the same materials.
Finally,
we encourage you to carefully consider the Report on Form 8-K filed by the
Company today, attaching a copy of the May 17 Letter. We are concerned that
the
May 17 Letter, by itself, is incomplete, and thus materially misleading as
to
the Board’s discussions with stockholders to date and the other matters
addressed therein. In particular, we are concerned that the matters addressed
by
numbered paragraphs 2 and 3, varying as they do from applicable law and the
Company’s Certificate of Incorporation and Bylaws require additional explanation
as to the purpose of the Board’s determination that participation by
stockholders in the nomination process be subject to unusual disabilities.
As
discussed above, we believe that numbered paragraph 4 may indicate the existence
of serious issues relating to the Company’s relationship with its auditors and
should be addressed fully. Numbered paragraph 5, expressing the view of an
employee and agent of the Company, is completely unsupported by discussion
in
your letter, but addresses, along with numbered paragraph 4, matters of
potentially grave concern and should be more fully addressed. In giving
consideration to these matters, we invite your attention to items 3.01, 3.03,
4.01, 5.02, 5.03 and 8.01 of Form 8-K.
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Very
truly yours
Jeffrey
M. Sone
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JMS/rr
Robert
A.
Kaiser
William
R. Hays, III
Haynes
& Boone, LLP
901
Main
Street, Suite 3100
Dallas,
Texas 75202