Cypress Semiconductor Files Definitive Consent Solicitation to Eliminate Cumulative Voting, Protecting Stockholders from Founder and Former CEO with Self-Serving Agenda to Regain Influence
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
The full text of the letter is as follows:
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
The Board determined that it needed to transition
We also think it is important to set the record straight with respect to several misstatements recently made by
February 2016, Cypress was evaluating a range of potential transactions and made the strategic decision to narrow its focus on Internetof 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. Rodgerswas 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. Binghamofficially joined Canyon Bridgein December 2016- more than a month after Canyon Bridgeannounced its acquisition of Lattice. Mr. Binghamreached an understanding to join Canyon Bridge'sfounding team in October and officially became a partner in December 2016. Mr. Binghamdiscussed his role at Canyon Bridgewith 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. Binghamwas not involved in Canyon Bridge'sefforts 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'sappointment as Executive Chairman and his compensation, which Mr. Rodgersnow calls "excessive and unnecessary." Furthermore, Mr. Bingham'scompensation was established by the Board working with an independent compensation advisor.
Simply put: Don't allow
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.
Lead Independent Director
President and CEO
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
Stockholders will be able to obtain, free of charge, copies of the 2017 Proxy Statement, any amendments or supplements thereto and any other documents (including the WHITE proxy card) when filed by the Company with the
Statements herein that are not historical facts and that refer to Cypress or its subsidiaries' plans and expectations for the future are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. We may use words such as "may," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," "future," "continue" or other wording indicating future results or expectations to identify such forward-looking statements that include, but are not limited to statements related to: our proposed governance changes, including changes regarding the removal of cumulative voting, the adoption of majority voting provisions and the adoption of proxy access provisions; our Cypress 3.0 strategy; the composition of our Board of Directors; our 2017 Annual Meeting; the Company's financial performance; our corporate governance policies and practices; our plans to file certain materials with the
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