Cypress Semiconductor Files Definitive Consent Solicitation to Eliminate Cumulative Voting, Protecting Stockholders from Founder and Former CEO with Self-Serving Agenda to Regain Influence

Sends Letter Urging Stockholders to Vote with the WHITE Consent Card

SAN JOSE, Calif., March 3, 2017 — (PRNewswire) — Cypress Semiconductor Corporation ("Cypress") (NASDAQ: CY) today announced that it has filed definitive consent solicitation materials with the U.S. Securities and Exchange Commission ("SEC") seeking to amend the Company's Second Restated Certificate of Incorporation to eliminate cumulative voting.

In conjunction with the filing, Cypress is mailing a letter to its stockholders along with the definitive consent solicitation statement, which includes a WHITE consent card, allowing stockholders as of the February 27, 2017 record date to submit consents by March 24, 2017, subject to extension by the Board of Directors.  

The full text of the letter is as follows:

March 3, 2017

Dear Fellow Stockholder,

We are sending you the enclosed Consent Statement and accompanying WHITE consent card to seek your approval to eliminate cumulative voting.  As you may know, cumulative voting permits a stockholder with a minority stake in a company to have an outsized influence on the composition of its board of directors and to push an agenda with which a majority of stockholders disagree.  For example, even if stockholders holding as much as 87% of Cypress' outstanding shares do not support a particular director nominee to serve on the board, that nominee can still be elected to a seven-member board, which is what Cypress has, if a stockholder cumulates the remaining 13% of the votes.  This is the reason why cumulative voting is exceptionally rare and in place at less than 3% of the S&P 500.  Taking this step will align Cypress with 97% of S&P 500 companies.

Cypress' Board of Directors believes that it needs to take this action now to protect stockholders from former CEO T.J. Rodgers' efforts to regain boardroom influence to promote his personal agenda.  As evidenced by our recent financial results, Cypress' 3.0 strategy is taking hold and we are positioning the Company for long-term growth by focusing on the fast-growing automotive, IoT and industrial segments.  This consent solicitation is a necessary step to preserve that momentum and ensure Cypress remains well positioned for the future.

The Board determined that it needed to transition Mr. Rodgers out of Cypress as CEO in April 2016 and as a Director in August 2016, enabling the Company to move beyond the founding CEO and accelerate our 3.0 strategy.  Having successfully made that transition, we cannot let Mr. Rodgers now take advantage of an extremely unusual voting provision to stop our progress and put the best interests of our other stockholders at risk.  Mr. Rodgers' personal agenda, including his pursuit of a baseless lawsuit and a distracting proxy contest, is potentially value-destructive.  We need to take immediate steps to prevent a minority stockholder, whose vision for Cypress is no longer appropriate for today's realities, from seeking to advance his agenda by replacing two standing Board members with his hand-picked representatives.  Mr. Rodgers' agenda could include actions that we believe would not be supported by – or be in the best interests of – the majority of our stockholders.

We also think it is important to set the record straight with respect to several misstatements recently made by Mr. Rodgers in his press releases and lawsuit.

  • In February 2016, Cypress was evaluating a range of potential transactions and made the strategic decision to narrow its focus on Internet of Things businesses, and accordingly determined it would not move forward with Lattice or other non-IoT opportunities.  As part of this process, Cypress' Board of Directors, in consultation with the Company's financial and legal advisors, evaluated a potential transaction with Lattice and ultimately decided not to pursue this transaction.  This decision was made when Mr. Rodgers was still CEO and a member of Cypress' Board.  Additionally, following a final outreach by Lattice's financial advisor, Cypress' Chief Financial Officer again declined to pursue a transaction in September 2016, consistent with the Company's previous decision to focus on IoT.
  • Mr. Bingham officially joined Canyon Bridge in December 2016 – more than a month after Canyon Bridge announced its acquisition of Lattice.  Mr. Bingham reached an understanding to join Canyon Bridge's founding team in October and officially became a partner in December 2016.  Mr. Bingham discussed his role at Canyon Bridge with Cypress' Board and outside counsel prior to joining the firm.  The Cypress Board evaluated whether there was a conflict of interest and determined there was none.
  • Mr. Bingham was not involved in Canyon Bridge's efforts to source the Lattice transaction, perform due diligence or negotiate the terms.  Eric Benhamou, Cypress' Lead Independent Director, together with the Company's outside counsel, confirmed these facts.
  • Mr. Rodgers, as a member of Cypress' Board of Directors, voted with the Board to unanimously approve Mr. Bingham's appointment as Executive Chairman and his compensation, which Mr. Rodgers now calls "excessive and unnecessary."  Furthermore, Mr. Bingham's compensation was established by the Board working with an independent compensation advisor.

Simply put: Don't allow Mr. Rodgers to regain influence in the boardroom to promote his personal agenda; act promptly to sign and return the WHITE consent card today.  If you have any questions about executing or delivering your WHITE consent card or require assistance, please contact our consent solicitor, Okapi Partners at (212) 297-0720 or toll-free at (877) 285-5990.

On behalf of Cypress' Board of Directors, we thank you for your continued support and we look forward to executing our 3.0 strategy to deliver value to you, our stockholders.



Sincerely,




Eric A. Benhamou

Hassane El-Khoury

Lead Independent Director

President and CEO



About Cypress

Founded in 1982, Cypress is a leader in advanced embedded system solutions for the world's most innovative automotive, industrial, home automation and appliances, consumer electronics and medical products. Cypress' programmable systems-on-chip, general-purpose microcontrollers, analog ICs, wireless and USB-based connectivity solutions and reliable, high-performance memories help engineers design differentiated products and get them to market first. Cypress is committed to providing customers with support and engineering resources that enable innovators and out-of-the-box thinkers to disrupt markets and create new product categories. To learn more, go to www.cypress.com.

IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT

The Company, its directors and certain of its executive officers and employees may be deemed to be participants in the solicitation of proxies from stockholders in connection with the Company's 2017 annual meeting of stockholders (the "2017 Annual Meeting").

The Company plans to file a proxy statement with the SEC in connection with the solicitation of proxies for the 2017 Annual Meeting (the "2017 Proxy Statement"), together with a WHITE proxy card.  STOCKHOLDERS ARE URGED TO READ THE 2017 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY WILL FILE WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  Additional information regarding the identity of these potential participants and their direct or indirect interests, by security holdings or otherwise, will be set forth in the 2017 Proxy Statement and other materials to be filed with the SEC in connection with the 2017 Annual Meeting.

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