ANDREW M. FREEDMAN, ESQ.
The information required
on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities
Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however,
see
the
Notes
).
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1
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NAME OF REPORTING PERSON
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Okumus Fund Management Ltd.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ☐
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(b) ☒
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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☐
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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Cayman Islands
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NUMBER OF
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7
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SOLE VOTING POWER
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SHARES
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BENEFICIALLY
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- 0 -
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OWNED BY
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8
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SHARED VOTING POWER
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EACH
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REPORTING
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1,788,079
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PERSON WITH
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9
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SOLE DISPOSITIVE POWER
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- 0 -
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10
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SHARED DISPOSITIVE POWER
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1,788,079
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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1,788,079
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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☐
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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5.2%
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14
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TYPE OF REPORTING PERSON
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CO
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1
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NAME OF REPORTING PERSON
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Okumus Opportunistic Value Fund, Ltd.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ☐
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(b) ☒
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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☐
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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British Virgin Islands
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NUMBER OF
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7
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SOLE VOTING POWER
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SHARES
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BENEFICIALLY
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- 0 -
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OWNED BY
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8
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SHARED VOTING POWER
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EACH
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REPORTING
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1,788,079
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PERSON WITH
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9
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SOLE DISPOSITIVE POWER
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- 0 -
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10
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SHARED DISPOSITIVE POWER
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1,788,079
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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1,788,079
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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☐
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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5.2%
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14
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TYPE OF REPORTING PERSON
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CO
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1
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NAME OF REPORTING PERSON
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Ahmet H. Okumus
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ☐
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(b) ☒
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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☐
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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Republic of Turkey
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NUMBER OF
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7
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SOLE VOTING POWER
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SHARES
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BENEFICIALLY
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- 0 -
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OWNED BY
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8
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SHARED VOTING POWER
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EACH
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REPORTING
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1,788,079
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PERSON WITH
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9
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SOLE DISPOSITIVE POWER
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- 0 -
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10
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SHARED DISPOSITIVE POWER
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1,788,079
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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1,788,079
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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☐
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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5.2%
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14
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TYPE OF REPORTING PERSON
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IN
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The following constitutes
the Schedule 13D filed by the undersigned (the “Schedule 13D”).
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Item 1.
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Security and Issuer.
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This statement relates to
the Common Stock, $0.0001 par value (the “Shares”), of Shutterfly Inc., a Delaware corporation (the “Issuer”).
The address of the principal executive offices of the Issuer is 2800 Bridge Parkway, Redwood City, California 94065.
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Item 2.
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Identity and Background.
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(a) This
statement is filed by:
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(i)
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Okumus Opportunistic Value Fund, Ltd., a company established under the laws of the British Virgin
Islands (“Opportunistic Value Fund”), with respect to the Shares directly and beneficially owned by it;
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(ii)
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Okumus Fund Management Ltd., a Cayman Islands exempted company (“Okumus Fund Management”),
as the investment manager of Opportunistic Value Fund; and
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(iii)
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Ahmet H. Okumus, as the President of Okumus Fund Management and a director of Opportunistic Value
Fund.
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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.
Set forth on Schedule
A annexed hereto (“Schedule A”) is the name and present principal occupation or employment, principal business address
and citizenship of the executive officers and directors of Opportunistic Value Fund and Okumus Fund Management. To the best of
the Reporting Persons’ knowledge, except as otherwise set forth herein, none of the persons listed on Schedule A beneficially
owns any securities of the Issuer or is a party to any contract, agreement or understanding required to be disclosed herein.
(b) The
principal business address of Opportunistic Value Fund is Craigmuir Chambers, P.O. Box 71, Road Town, Tortola VG 1110. The principal
business address of Okumus Fund Management and Mr. Okumus is 767 Third Avenue, 35th Floor, New York, NY 10017.
(c) The
principal business of Opportunistic Value Fund is investing in securities. The principal business of Okumus Fund Management is
serving as an investment adviser and the investment manager of Opportunistic Value Fund. Mr. Okumus serves as the President and
a director of Okumus Fund Management and a director of Opportunistic Value Fund.
(d) No
Reporting Person, nor any person listed on Schedule A, 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 A, 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) Mr.
Okumus is a citizen of the Republic of Turkey. The citizenship of the persons listed on Schedule A is set forth therein.
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Item 3.
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Source and Amount of Funds or Other Consideration
.
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The Shares purchased by Opportunistic Value Fund
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. The aggregate purchase price of the 1,788,079 Shares beneficially owned by Opportunistic
Value Fund is approximately $85,917,661, including brokerage commissions.
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Item 4.
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Purpose of Transaction
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The Reporting Persons
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.
On March 6, 2019,
the Reporting Persons entered into a Confidentiality and Non-Disclosure Agreement with the Issuer (the “Agreement”),
pursuant to which the Reporting Persons agreed to hold in confidence and refrain from disclosing certain discussion information
and confidential information relating to the Issuer’s announced strategic review process and CEO transition. The terms of
the Agreement provide that the Reporting Persons may not acquire beneficial ownership of 4.99% or more of the Issuer’s then-outstanding
Shares, except to the extent acquired solely as a result of the exercise by a third party of put options written by the Reporting
Persons as of the date of the Agreement. The Agreement also includes certain other customary standstill restrictions that remain
in effect from the date of the Agreement until the later of (i) written notice by one party to the other party that it is electing
to terminate discussions and (ii) the first date on which the Issuer files its proxy statement, or preliminary proxy statement,
for the 2019 annual meeting of stockholders.
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 or in connection with completion of, or following,
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, engaging in communications with management and the Board of Directors of the Issuer, engaging in discussions with shareholders
of the Issuer and others about the Issuer and the Reporting Persons’ investment, making other proposals to the Issuer concerning
changes to the capitalization, ownership structure, board structure (including board composition) 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.
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Item 5.
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Interest in Securities of the Issuer
.
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The aggregate percentage
of Shares reported owned by each person named herein is based upon 34,170,027 Shares outstanding as of March 18, 2019, which is
the total number of Shares outstanding as reported in the DEFR14A filed with the Securities and Exchange Commission on April 8,
2019.
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A.
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Opportunistic Value Fund
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(a)
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As of the close of business on April 26, 2019, Opportunistic Value Fund beneficially owned 1,788,079
Shares.
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Percentage: Approximately 5.2%
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(b)
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1. Sole power to vote or direct vote: 0
2. Shared power to vote or direct vote: 1,788,079
3. Sole power to dispose or direct the disposition: 0
4. Shared power to dispose or direct the disposition: 1,788,079
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(c)
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The transactions in the Shares by Opportunistic Value Fund during the past sixty days are set forth
on Schedule B and incorporated herein by reference.
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B.
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Okumus Fund Management
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(a)
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Okumus Fund Management, as the investment manager of Opportunistic Value Fund, may be deemed the beneficial owner of the 1,788,079
Shares owned by Opportunistic Value Fund.
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Percentage: Approximately 5.2%
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(b)
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1. Sole power to vote or direct vote: 0
2. Shared power to vote or direct vote: 1,788,079
3. Sole power to dispose or direct the disposition: 0
4. Shared power to dispose or direct the disposition: 1,788,079
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(c)
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Okumus Fund Management has not entered into any transactions in the Shares during the past sixty
days. The transactions in the Shares on behalf of Opportunistic Value Fund during the past sixty days are set forth on Schedule
B and incorporated herein by reference.
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(a)
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Mr. Okumus, as the President of Okumus Fund Management and a director of Opportunistic Value Fund,
may be deemed the beneficial owner of the 1,788,079 Shares owned by Opportunistic Value Fund.
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Percentage: Approximately 5.2%
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(b)
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1. Sole power to vote or direct vote: 0
2. Shared power to vote or direct vote: 1,788,079
3. Sole power to dispose or direct the disposition: 0
4. Shared power to dispose or direct the disposition: 1,788,079
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(c)
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Mr. Okumus has not entered into any transactions in the Shares during the past sixty days. The
transactions in the Shares on behalf of Opportunistic Value Fund during the past sixty days are set forth on Schedule B and incorporated
herein by reference.
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Each Reporting Person,
as a member of a “group” with the other Reporting Persons 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.
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(d)
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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, the Shares.
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Item 6.
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Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
.
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Opportunistic Value
Fund sold short certain exchange-listed American-style put options referencing an aggregate of 367,800 Shares, which had an exercise
price of $40.00 and expired on April 18, 2019. 2,098 options expired worthless pursuant to their terms, while 158,000 Shares (represented
by 1,580 options) were delivered to Opportunistic Value Fund upon assignment of such options as further described in Schedule B
hereto.
On April 29, 2019,
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 the securities of the Issuer to the extent required by applicable
law. The Joint Filing 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.
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Item 7.
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Material to be Filed as Exhibits
.
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99.1
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Joint Filing Agreement by and among Okumus Opportunistic Value Fund, Ltd., Okumus Fund Management
Ltd. and Ahmet H. Okumus, dated April 29, 2019.
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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: April 29, 2019
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Okumus Opportunistic Value Fund, Ltd.
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By:
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/s/ Ahmet H. Okumus
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Name:
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Ahmet H. Okumus
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Title:
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Director
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Okumus Fund Management Ltd.
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By:
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/s/ Ahmet H. Okumus
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Name:
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Ahmet H. Okumus
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Title:
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President
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/s/ Ahmet H. Okumus
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Ahmet H. Okumus
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SCHEDULE A
Directors and Officers of Okumus Opportunistic
Value Fund, Ltd.
Name and Position
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Principal Occupation
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Principal Business Address
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Citizenship
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Ahmet Okumus
Director*
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David Cooper
Director
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Attorney
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Cumberland House
9th Floor
1 Victoria Street
P.O. Box HM 1561
Hamilton HM FX
Bermuda
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Bermuda
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Directors and Officers of Okumus Fund
Management Ltd.
Name and Position
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Principal Occupation
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Principal Business Address
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Citizenship
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Ahmet Okumus President and Director*
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Melis Okumus
Director
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Company Director
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767 3rd Avenue, 35
th
Floor
New York, New York 10017
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Turkey
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*
Mr. Okumus is a Reporting Person and, as such,
the information with respect to Mr. Okumus called for by the Schedule 13D is set forth therein.
SCHEDULE B
Transactions in the Securities of the Issuer
During the Past Sixty (60) Days
Nature of Transaction
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Amount of Securities
Purchased/(Sold)
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Price per Share ($)
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Date of
Purchase
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OKUMUS OPPORTUNISTIC
VALUE FUND, LTD.
Sale of April 18, 2019 Put Option ($40.00 Strike Price)
1
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(2,800)
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0.5500
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03/04/2019
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Sale of April 18, 2019 Put Option ($40.00 Strike Price)
1
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(875)
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0.5500
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03/04/2019
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Sale of April 18, 2019 Put Option ($40.00 Strike Price)
1
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(3)
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0.6000
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03/04/2019
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Delivery of Common Stock Upon Assignment of April 18, 2019 Put Option ($40.00 Strike Price)
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158,000
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40.0000
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04/18/2019
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___________________________________
1
Represents a short sale.