Tessera Believes Glass Lewis Recommendation Lacks Thoughtful Analysis
Tessera Believes Glass Lewis Recommendation Lacks Thoughtful Analysis
Company Gratified that Glass Lewis Recognizes that Starboard Should Not Be Given Board Control
Stockholders Urged to Ignore Misguided Critiques and Vote the GOLD Proxy Card FOR Full Management Slate
SAN JOSE, Calif.--(BUSINESS WIRE)-- Tessera Technologies, Inc. (NAS: TSRA) ("Tessera" or the "Company") today issued the following statement in response to the Glass Lewis & Co. ("Glass Lewis") report regarding the board of directors nominees for Tessera's 2013 annual meeting of stockholders to be held on May 23, 2013.
"While we are pleased that Glass Lewis recognizes that dissident stockholder Starboard Value LP ("Starboard") does not merit control of the Tessera board, we are greatly troubled that Glass Lewis failed to recognize that Starboard nominees Peter Feld and Tom Lacey could be detrimental to preserving and enhancing stockholder value. Feld has a clear conflict of interest by serving as the chairman of a competing intellectual property ("IP") licensing company Unwired Planet (formerly Openwave), which has suffered great financial losses with Feld at the helm. Meanwhile, Lacey's contract manufacturing work experience represents the exact same capital-intensive business model that we tried, and it proved to be prohibitively costly and inefficient. Bringing Lacey in would just reset and repeat that detrimental experience, while bringing Feld in would guarantee an untenable situation where constant recusals from key board decisions would be necessary to preserve ethical board guidelines," said Richard S. Hill, interim CEO and executive chairman of Tessera Technologies, Inc.
"Electing Feld and his nominees to our board would likely transform Tessera into a 'patent troll', as well as regress the Company into a camera module manufacturer requiring hundreds of millions of dollars of additional capital, which frankly neither the reconstituted board, nor our stockholders, have an appetite for. Importantly, incumbent director Dave Nagel is in the unique position of understanding and articulating the flaws of the "patent troll" business model (serving as a member of Unwired Planet's board for over 18 months with Feld), contract manufacturing strategies, and other avenues Tessera has embarked upon during his eight years of service on our board. We recognize mistakes have been made and believe it is imperative to preserve some continuity at the board level to ensure we don't try what has already been unsuccessfully trodden. It is critical that the leadership team preserves a depth of understanding to ensure a smooth transition to an essentially brand new board at Tessera.
"We do agree, however, that Tudor Brown and George Cwynar, at least on paper, appear to have the relevant experience to be value-added members to our board. As a matter of fact, we offered to interview both Brown and Cwynar ourselves on numerous occasions, but were denied the opportunity each and every time. Thus, we take no position with Glass Lewis's endorsement of these two individuals.
"Lastly, we strongly believe that by not taking the time to meet with the Company in making its recommendation, Glass Lewis made numerous flawed assumptions that resulted in the wrong conclusion by failing to support allof Tessera's highly qualified and experienced nominees. Since August of 2012 when Tim Stultz and I were named as directors, we have worked diligently to bring experience and relevant expertise to the board, and continue to collaborate with the other directors and the management team to act decisively and efficiently to execute on the refocused strategic plan for the Company that is already showing progress," stated Hill.
The Tessera board's nominees are proven business leaders with a diverse range of complementary experience in IP monetization, operations, engineering, finance, high tech and semiconductors, as well as other areas essential to ensure the continued successful execution of Tessera's strategy and to deliver greater value for stockholders.
Tessera's board is committed to driving enhanced stockholder returns, as exemplified in the continued execution of Tessera's restructured and detailed value creation strategy, which has already begun to yield results. In fact, Tessera recently announced near-term and longer term objectives and a target financial model for its IP business. We expect at least $130 million-$150 million in recurring revenues in 2014, out of an annual run rate of at least $180 million-$200 million for our IP business with meaningful growth over the longer term.
We urge stockholders to vote the GOLD proxy card FOR Chenault, Hill, Miner, Nagel, Seams and Stultz and simply discard any WHITE proxy card they may receive from Starboard. Stockholders should be advised that they CANNOT use Starboard's WHITE proxy card to vote for any of Chenault, Hill, Miner, Nagel, Seams and Stultz.
If you have questions about how to vote your shares, or need additional assistance, please contact MacKenzie Partners, Inc., who is assisting the Company in the solicitation of proxies:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016
Stockholders may call toll-free at (800) 322-2885 or call collect at (212) 929-5500 with any questions
Safe Harbor Statement
This press release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ significantly from those projected, particularly with respect to the Company's strategic plans, market opportunities, financial targets and projections, value creation and stockholder return. Material factors that may cause results to differ from the statements made include the plans or operations relating to the Company's businesses; market or industry conditions; changes in patent laws, regulation or enforcement, or other factors that might affect the Company's ability to protect or realize the value of its intellectual property; the expiration of license agreements and the cessation of related royalty income; the failure, inability or refusal of licensees to pay royalties; initiation, delays, setbacks or losses relating to the Company's intellectual property or intellectual property litigations, or invalidation or limitation of key patents; the timing and results, which are not predictable and may vary in any individual proceeding, of any ICC ruling or award, including in the Amkor arbitration; fluctuations in operating results due to the timing of new license agreements and royalties, or due to legal costs; the risk of a decline in demand for semiconductor and camera module products; failure by the industry to use technologies covered by the Company's patents; the expiration of the Company's patents; the Company's ability to successfully complete and integrate acquisitions of businesses; the risk of loss of, or decreases in production orders from, customers of acquired businesses; financial and regulatory risks associated with the international nature of the Company's businesses; failure of the Company's products to achieve technological feasibility or profitability; failure to successfully commercialize the Company's products; changes in demand for the products of the Company's customers; limited opportunities to license technologies and sell products due to high concentration in the markets for semiconductors and related products and camera modules; the impact of competing technologies on the demand for the Company's technologies and products; and the reliance on a limited number of suppliers for the components used in the manufacture of DOC products. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release. The Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended Dec. 31, 2012, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, include more information about factors that could affect the Company's financial results. The Company assumes no obligation to update information contained in this press release. Although this release may remain available on the Company's website or elsewhere, its continued availability does not indicate that the Company is reaffirming or confirming any of the information contained herein.
About Tessera Technologies
Tessera Technologies, Inc. is a holding company with operating subsidiaries in two segments: Intellectual Property and DigitalOptics. Our Intellectual Property segment, managed by Tessera Intellectual Property Corp., generates revenue from manufacturers and other implementers that use our technology. Our DigitalOptics business delivers innovation in imaging systems for smartphones. For more information call 1.408.321.6000 or visit www.tessera.com.
Tessera, the Tessera logo, DOC, the DOC logo, and Invensas Corporation are trademarks or registered trademarks of affiliated companies of Tessera Technologies, Inc. in the United States and other countries. All other company, brand and product names may be trademarks or registered trademarks of their respective companies.
Tessera Technologies, Inc.
Rick Neely, 408-321-6756
Chief Financial Officer
The Abernathy MacGregor Group
Chuck Burgess, 212-371-5999
KEYWORDS: United States North America California
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