The following
constitutes the Schedule 13D filed by the undersigned (the “Schedule
13D”).
The
undersigned were previously part of a Section 13(d) reporting group that
included Knightspoint Partners, LLC, and certain of its affiliates (the
“Knightspoint Group”). The undersigned ceased to be members of the
Knightspoint Group on August 29, 2007. For ownership information
relating to the undersigned prior to the filing of this Schedule 13D, please
make reference to Schedule 13D filed by Knightspoint Partners II, L.P. with the
Securities and Exchange Commission (the "SEC") on March 9, 2006, as amended by
that certain Amendment No. 1 filed with the SEC on May 11, 2006, by that certain
Amendment No. 2 filed with the SEC on September 29, 2006, by that certain
Amendment No. 3 filed with the SEC on March 20, 2007, by that certain Amendment
No. 4 filed with the SEC on May 24, 2007, by that certain Amendment No. 5 filed
with the SEC on August 29, 2007.
Item
1.
Security and
Issuer
.
This statement relates to shares of the
Common Stock, par value $0.01 per share (the “Shares”), of Sharper Image
Corporation (the “Issuer”). The address of the principal executive
offices of the Issuer is 350 The Embarcadero, 6
th
Floor,
San Francisco, CA 94105.
Item
2.
Identity and
Background
.
(a) This
statement is filed by:
|
|
(i)
|
Parche,
LLC, a Delaware limited liability company (“Parche”), with respect to the
Shares directly and beneficially owned by
it;
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|
(ii)
|
Starboard
Value and Opportunity Master Fund Ltd., a Cayman Islands exempted company
(“Starboard”), with respect to the Shares directly and beneficially owned
by it;
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(iii)
|
RCG
Enterprise, Ltd, a Cayman Islands exempted company (“RCG
Enterprise”);
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(iv)
|
RCG
Starboard Advisors, LLC, a Delaware limited liability company (“RCG
Starboard Advisors”), who serves as the managing manager of Parche and as
the investment manager of
Starboard;
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(v)
|
Ramius
Capital Group, L.L.C., a Delaware limited liability company (“Ramius
Capital”), who serves as the sole member of RCG Starboard Advisors and as
the investment manager of RCG
Enterprise;
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(vi)
|
C4S
& Co., L.L.C., a Delaware limited liability company (“C4S”), who
serves as managing member of Ramius
Capital;
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(vii)
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Peter
A. Cohen ("Mr. Cohen"), who serves as one of the managing members of
C4S;
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(viii)
|
Morgan
B. Stark ("Mr. Stark"), who serves as one of the managing members of
C4S;
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(ix)
|
Thomas
W. Strauss ("Mr. Strauss"), who serves as one of the managing members of
C4S; and
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(x)
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Jeffrey
M. Solomon ("Mr. Solomon"), who serves as one of the managing members of
C4S.
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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 Agreement, as further described in Item 6. Accordingly,
the Reporting Persons are hereby filing a joint Schedule 13D.
Peter A. Feld, a party to the Agreement to Jointly File Schedule 13D, entered
into by the Reporting Persons on August 27, 2007 and filed as Exhibit 1 to
Amendment No. 5 to the Schedule 13D filed by the Knightspoint Partners II, L.P.,
on August 29, 2007, resigned as a director of the Issuer effective January 25,
2008. As a result, Mr. Feld is no longer considered a member of a
“group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of
1934 and, therefore, is not a "Reporting Person" for purposes of this Schedule
13D.
(b) The
address of the principal office of each of Parche, RCG Starboard Advisors,
Ramius Capital, C4S and Messrs. Cohen, Stark, Strauss and Solomon is
666 Third Avenue, 26
th
Floor,
New York, New York 10017.
The
address of the principal office of each of Starboard and RCG Enterprise is c/o
Citco Fund Services (Cayman Islands) Limited, Corporate Center, West Bay Road,
Grand Cayman, Cayman Islands, British West Indies. The officers and
directors of Starboard and their principal occupations and business addresses
are set forth on Schedule B and incorporated by reference in this Item
2. The officers and directors of RCG Enterprise and their principal
occupations and business addresses are set forth on Schedule C and incorporated
by reference in this Item 2.
(c) The
principal business of each of Starboard, Parche and RCG Enterprise is serving as
a private investment fund. Each of Starboard and Parche has been formed for the
purpose of making equity investments and, on occasion, taking an active role in
the management of portfolio companies in order to enhance shareholder
value. The principal business of RCG Starboard Advisors is acting as
the managing member of Parche and as the investment manager of
Starboard. Ramius Capital is engaged in money management and
investment advisory services for third parties and proprietary accounts and
serves as the investment manager of RCG Enterprise. C4S serves as
managing member of Ramius Capital. Messrs. Cohen, Strauss, Stark and Solomon
serve as co-managing members of C4S.
(d) No
Reporting Person, nor any person listed on Schedule B or Schedule C, each
annexed hereto, has, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) No
Reporting Person, nor any person listed on Schedule B or Schedule C, each
annexed hereto, 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.
Cohen, Stark, Strauss, and Solomon are citizens of the United States of
America.
Item
3.
Source and Amount of Funds
or Other Consideration
.
The Shares
purchased by Starboard and Parche were purchased with the working capital of
such entities
(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, as set forth in Schedule A, which is
incorporated by reference herein. The aggregate purchase cost of the
1,849,470
Shares beneficially owned in the aggregate by Starboard and Parche is
approximately $18,350,750, excluding brokerage commissions
.
Certain Shares reported in this
Schedule 13D as beneficially owned by Parche were acquired in private
transactions with various transferors for which Ramius Capital or an affiliate
serves as the investment manager, the managing member or the managing member of
the investment manager. Ramius Capital is the sole member of RCG
Starboard Advisors, which is the managing member of Parche. Parche
acquired from such transferors an aggregate of 103,471 Shares on February 27,
2006 at a per Share price of $11.04, equal to the last reported sales price on
the Nasdaq National Market on the date the transaction was completed, or an
aggregate of $1,142,320. The total of 103,471 Shares transferred to Parche were
initially acquired by the transferors for an aggregate of $1,142,320 (excluding
commissions and other execution related costs). Such transferors have
not effected any transactions in the Shares within the 60 days prior to the
filing of this Schedule 13D. The Reporting Persons do not believe
that the information contained in this paragraph is called for by the Items of
Schedule 13D and are disclosing it for supplemental informational purposes
only.
Item
4.
Purpose of
Transaction
.
The
Reporting Persons originally purchased the Shares based on the Reporting
Persons’ belief that the Shares, when purchased, were undervalued and
represented an attractive investment opportunity. Depending upon overall market
conditions, other investment opportunities available to the Reporting Persons,
and the availability of Shares at prices that would make the purchase or sale of
Shares desirable, the Reporting Persons may endeavor to increase or decrease
their position in the Issuer through, among other things, the purchase or sale
of Shares on the open market or in private transactions or otherwise, on such
terms and at such times as the Reporting Persons may deem
advisable.
No
Reporting Person has any present plan or proposal which would relate to or
result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of
Schedule 13D except as set forth herein or such as would occur upon completion
of any of the actions discussed herein. The Reporting Persons intend to review
their investment in the Issuer on a continuing basis.
Depending
on various factors including, without limitation, the Issuer’s financial
position and investment strategy, the price levels of the Shares, conditions in
the securities markets and general economic and industry conditions, the
Reporting Persons may in the future take such actions with respect to their
investment in the Issuer as they deem appropriate including, without limitation,
seeking Board representation, making proposals to the Issuer concerning changes
to the capitalization, ownership structure or operations of the Issuer,
purchasing additional Shares, selling some or all of their Shares, engaging in
short selling of or any hedging or similar transaction with respect to the
Shares, or changing their intention with respect to any and all matters referred
to in Item 4.
Item
5.
Interest in Securities of
the Issuer
.
The aggregate percentage of Shares
reported owned by each person named herein is based upon 15,154,249 Shares
outstanding, as of December 7, 2007, which is the total number of Shares
outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q, filed
with the Securities and Exchange Commission on December 10, 2007.
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(a)
|
As
of the close of business on February 22, 2008, Parche beneficially owned
295,915 Shares.
|
Percentage:
Approximately 2.0%.
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(b)
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1.
Sole power to vote or direct vote:
295,915
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2.
Shared power to vote or direct vote:
0
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3.
Sole power to dispose or direct the disposition:
295,915
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4.
Shared power to dispose or direct the disposition:
0
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(c)
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The
transactions in the Shares by Parche in the past 60 days are set forth in
Schedule A and are incorporated by
reference.
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(a)
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As
of the close of business on February 22, 2008, Starboard beneficially
owned 1,553,555 Shares.
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Percentage:
Approximately 10.3%.
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(b)
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1.
Sole power to vote or direct vote:
1,553,555
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2.
Shared power to vote or direct vote:
0
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3.
Sole power to dispose or direct the disposition:
1,553,555
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4.
Shared power to dispose or direct the disposition:
0
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(c)
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The
transactions in the Shares by Starboard in the past 60 days are set forth
in Schedule A and are incorporated by
reference.
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(a)
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As
of the close of business on February 22, 2008, RCG Enterprise, as the sole
non-managing member of Parche and owner of all economic interests therein,
may be deemed the beneficial owner of the 295,915 Shares beneficially
owned by Parche.
|
Percentage:
Approximately 2.0%.
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(b)
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1.
Sole power to vote or direct vote:
295,915
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2.
Shared power to vote or direct vote:
0
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3.
Sole power to dispose or direct the disposition:
295,915
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4.
Shared power to dispose or direct the disposition:
0
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(c)
|
RCG
Enterprise did not enter into any transactions in the Shares in the past
60 days. The transactions in the Shares by Parche in the past
60 days are set forth in Schedule A and are incorporated by
reference.
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D.
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RCG
Starboard Advisors
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(a)
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As
of the close of business on February 22, 2008, as the managing member of
Parche and the investment manager of Starboard, RCG Starboard Advisors may
be deemed the beneficial owner of the (i) 1,553,555 Shares beneficially
owned by Starboard, and (ii) 295,915 Shares beneficially owned by
Parche.
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Percentage:
Approximately 12.2%.
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(b)
|
1.
Sole power to vote or direct vote:
1,849,470
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2.
Shared power to vote or direct vote:
0
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3.
Sole power to dispose or direct the disposition:
1,849,470
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4.
Shared power to dispose or direct the disposition:
0
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(c)
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RCG
Starboard Advisors did not enter into any transactions in the Shares in
the past 60 days. The transactions in the Shares in the past 60
days on behalf of Starboard and Parche, which were all in the open market,
are set forth in Schedule A and are incorporated by
reference.
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(a)
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As
of the close of business on February 22, 2008, as the sole member of RCG
Starboard Advisors, Ramius Capital may be deemed the beneficial owner of
the (i) 1,553,555 Shares beneficially owned by Starboard and (ii) 295,915
Shares beneficially owned by
Parche.
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Percentage:
Approximately 12.2%.
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(b)
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1.
Sole power to vote or direct vote:
1,849,470
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2.
Shared power to vote or direct vote:
0
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3.
Sole power to dispose or direct the disposition:
1,849,470
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4.
Shared power to dispose or direct the disposition:
0
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(c)
|
Ramius
Capital did not enter into any transactions in the Shares in the past 60
days. The transactions in the Shares in the past 60 days on
behalf of Starboard and Parche, which were all in the open market, are set
forth in Schedule A and are incorporated by
reference.
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(a)
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As
of the close of business on February 22, 2008, as the managing member of
Ramius Capital, C4S may be deemed the beneficial owner of the (i)
1,553,555 Shares beneficially owned by Starboard and (ii) 295,915 Shares
beneficially owned by Parche.
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Percentage:
Approximately 12.2%.
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(b)
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1.
Sole power to vote or direct vote:
1,849,470
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2.
Shared power to vote or direct vote:
0
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3.
Sole power to dispose or direct the disposition:
1,849,470
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4.
Shared power to dispose or direct the disposition:
0
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(c)
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C4S
did not enter into any transactions in the Shares in the past 60
days. The transactions in the Shares in the past 60 days on
behalf of Starboard and Parche, which were all in the open market, are set
forth in Schedule A and are incorporated by
reference.
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G.
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Messrs.
Cohen, Stark, Strauss and Solomon
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(a)
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As
of the close of business on February 22, 2008, as the managing members of
C4S, each of Messrs. Cohen, Stark, Strauss and Solomon may be deemed the
beneficial owner of the (i) 1,553,555 Shares beneficially owned by
Starboard and (ii) 295,915 Shares beneficially owned by
Parche.
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Percentage:
Approximately 12.2%.
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(b)
|
1.
Sole power to vote or direct vote:
0
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2.
Shared power to vote or direct vote:
1,849,470
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3.
Sole power to dispose or direct the disposition:
0
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4.
Shared power to dispose or direct the disposition:
1,849,470
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(c)
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None
of Messrs. Cohen, Stark, Strauss or Solomon has entered into any
transactions in the Shares in the past 60 days. The
transactions in the Shares in the past 60 days on behalf of Starboard and
Parche, which were all in the open market, are set forth in Schedule A and
are incorporated by reference.
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(d)
|
No
person other than the Reporting Persons is known to have the right to
receive, or the power to direct the receipt of dividends from, or proceeds
from the sale of, such shares of the Common
Stock.
|
Item
6.
Contracts, Arrangements,
Understandings or Relationships With Respect to
Securities of the
Issuer
.
On February 22, 2008, the Reporting
Persons entered into a Joint Filing Agreement in which the Reporting Persons
agreed to the joint filing on behalf of each of them of statements on Schedule
13D, with respect to securities of the Issuer, to the extent required by
applicable law. A copy of this agreement is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
Other
than as described herein, there are no contracts, arrangements, understandings
or relationships among the Reporting Persons, or between the Reporting Persons
and any other person, with respect to the securities of the Issuer.
Item
7.
Material to be Filed as
Exhibits
.
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Exhibit
99.1
|
Joint
Filing Agreement by and among Starboard Value and Opportunity Master Fund
Ltd., Parche, LLC, RCG Starboard Advisors, LLC, RCG Enterprise, Ltd,
Ramius Capital Group, L.L.C., C4S & Co., L.L.C., Peter A. Cohen,
Morgan B. Stark, Thomas W. Strauss, and Jeffrey M. Solomon, dated February
22, 2008.
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|
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Exhibit
99.2
|
Power
of Attorney for Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and
Jeffrey M. Solomon, dated August 16,
2007.
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SIGNATURES
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: February
22, 2008
|
PARCHE,
LLC
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RCG
STARBOARD ADVISORS, LLC
|
|
By: RCG
Starboard Advisors, LLC,
|
By: Ramius
Capital Group, L.L.C.,
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|
its managing
member
|
its sole
member
|
|
|
|
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STARBOARD
VALUE AND OPPORTUNITY MASTER FUND LTD.
|
|
RCG
ENTERPRISE, LTD
|
|
By: RCG
Starboard Advisors, LLC,
|
|
By: Ramius
Capital Group, L.L.C.,
|
|
its investment
manager
|
its investment
manager
|
|
|
|
|
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RAMIUS
CAPITAL GROUP, L.L.C.
|
|
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|
By:
C4S & Co., L.L.C.,
|
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as managing
member
|
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|
|
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C4S
& CO., L.L.C.
|
|
By:
|
|
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Name:
Jeffrey M. Solomon
|
|
|
Title:
Authorized Signatory
|
|
|
|
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JEFFREY
M. SOLOMON
|
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|
Individually
and as attorney-in-fact for Peter A. Cohen, Morgan B. Stark and Thomas W.
Strauss
|
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SCHEDULE
A
Transactions in the Shares
During the Past 60 Days
|
Shares
of Common Stock
Purchased/(Sold)
|
Price
Per
Share($)
|
Date
of
Purchase/Sale
|
PARCHE,
LLC
|
(128,000)
|
0.3789
|
02/20/08
|
STARBOARD
VALUE AND OPPORTUNITY MASTER FUND LTD.
|
(672,000)
|
0.3789
|
02/20/08
|
SCHEDULE
B
Directors
and Officers of Starboard Value and Opportunity Master Fund Ltd.
|
Name and
Position
|
Principal
Occupation
|
Principal Business
Address
|
|
|
|
|
|
Mark
Mitchell
Director
|
Partner
of Ramius Capital Group, L.L.C.
|
666
Third Avenue
26
th
Floor
New
York, New York 10017
|
|
|
|
|
|
Jeffrey
M. Solomon
Director
|
Managing
Member of C4S & Co., L.L.C., which is the Managing Member of Ramius
Capital Group, L.L.C.
|
666
Third Avenue
26
th
Floor
New
York, New York 10017
|
|
|
|
|
|
CFS
Company Ltd.
Director
|
Nominee
Company registered with Cayman Islands Monetary Authority and is
affiliated with Administrator of the Fund
|
c/o
Citco Fund Services (Cayman Islands) Limited
Corporate
Center
West
Bay Road
Grand
Cayman, Cayman Islands
British
West Indies
|
|
|
|
|
|
CSS
Corporation Ltd.
Secretary
|
Affiliate
of the Administrator of the Fund
|
c/o
Citco Fund Services (Cayman Islands) Limited
Corporate
Center
West
Bay Road
Grand
Cayman, Cayman Islands
British
West Indies
|
SCHEDULE
C
Directors
and Officers of RCG Enterprise, Ltd
|
Name and
Position
|
Principal
Occupation
|
Principal Business
Address
|
|
|
|
|
|
Morgan
B. Stark
Director
|
Managing
Member of C4S & Co., L.L.C., which is the Managing Member of Ramius
Capital Group, L.L.C.
|
666
Third Avenue
26
th
Floor
New
York, New York 10017
|
|
|
|
|
|
Marran
Ogilvie
Director
|
General
Counsel of Ramius Capital Group, L.L.C.
|
666
Third Avenue
26
th
Floor
New
York, New York 10017
|
|
|
|
|
|
CFS
Company Ltd.
Director
|
Nominee
Company registered with Cayman Islands Monetary Authority and is
affiliated with Administrator of the Fund
|
c/o
Citco Fund Services (Cayman Islands) Limited
Corporate
Center
West
Bay Road
Grand
Cayman, Cayman Islands
British
West Indies
|
|
|
|
|
|
CSS
Corporation Ltd.
Secretary
|
Affiliate
of the Administrator of the Fund
|
c/o
Citco Fund Services (Cayman Islands) Limited
Corporate
Center
West
Bay Road
Grand
Cayman, Cayman Islands
British
West Indies
|