- DSP Group Board Takes Actions Adopting Corporate Governance Best Practices
- Current Board Nominees Best Positioned to Lead the Company Forward
- Executing on a Clear Plan for Revenue Growth
- Robust & Successful Turnaround Well Underway and Producing Results
- Recommends All Stockholders to Vote the GOLD Proxy Card Today
Dear Fellow Stockholders,
We are writing to you to let you know that your Board has adopted today a number of actions to place the Company at the forefront of corporate governance best practices. These corporate governance initiatives include:
1. The election of a non-executive Chairman, Patrick Tanguy, a current independent director of the Board. He replaces
Eliyahu Ayalon, who will remain as a member of the Board and will continue to contribute to the Company and management, leveraging his strong relationships with key customers and suppliers across East Asiaand Europe, and in helping the Company retain and attract key engineering talent in Israel.
Mr. Tanguy is a highly experienced executive who has demonstrated his leadership and contribution by utilizing astute business judgment and his extensive executive network throughout
Europeand Asiaincluding major service providers, mobile OEMs, and home automation and energy management companies. Mr. Tanguy is a Managing Director at Wendel Group, an investment firm that invests and assists sector-leading companies in their long-term development by focusing on operational performance and accountability. He joined Wendel Groupin September 2007and is a member of both the Investment and the Management Committees, and serves as a non-executive Director on various Wendelcompanies. Mr. Tanguy graduated from HEC in 1983 in Paris, and began his career at Bain & Co.in 1984 and was made partner in 1990. In 1991, he joined Strafor-Facom, where he was nominated as Director of Sales and Marketing of Steelcase Strafor and subsequently CEO of Airborne. He became CEO of DAFSA in 1993 and then President in 1996. Having acted as President of the "Courrier-Express" division of the Hays Groupin Francefor a year, Mr. Tanguy assumed the Presidency of the Technal group in Toulouse from 1999 to 2004. Before joining Wendelin 2007, he acted first as President of the Monné-Decroix company in Toulouse and then of the Prezioso Technilor in Lyon.
2. Adoption of a resolution to declassify the Company's Board of Directors from three classes to a single class, beginning in 2014, subject to required approval by the Company's stockholders. All of the Company's directors, whose terms would otherwise expire after the 2014 Annual Meeting of Stockholders, will be requested to submit their resignations so that all directors will be up for election at the Company's annual meeting in 2014.
3. Adoption of a resolution to establish a minimum stock ownership policy for members of the DSP Group Board of Directors and the Company's senior management, in accordance with corporate governance best practices. The Nomination and Corporate Governance Committee will evaluate alternatives and propose a specific policy to the Board for its approval no later than
June 30, 2013.
These actions, which have been approved by your Board, represent its continuing commitment to best-in-class corporate governance and demonstrate that the Board is attentive and receptive to stockholder feedback. Your Board is committed to provide the strategic direction and specialized talent to lead
In addition to the corporate governance initiatives that have been adopted, the Company recently added a strong new independent director to its board,
Moreover, it's important to note that your Board has, within the past two years, added additional independent directors; three out of our nine serving directors have been designated or suggested by stockholders of
Starboard's campaign has been based upon distorting the past, misrepresenting current achievements, and envisioning a short-sighted future. Rather than recognizing the important and meaningful steps taken by the Board to position
The fact is, your Board has been doing precisely what it is supposed to do – developing and implementing a coherent strategy, leveraging the Company's core competence that will position
Look at the Facts
Following are just a few examples of what have been accomplished under the current Board's leadership:
DSP Grouphas launched three new products that have successfully expanded the Company's total addressable market over ten-fold to more than 1 billion units, and to date two have achieved design wins and the third is expected to garner at least one design win by year end.
DSP Group'sfocused investments in R&D, which are significantly below System-on-Chip (SoC) peer averages, are paying off with new opportunities in cellular and enterprise telephony.
DSP Group'scommitment to cost-controls and increased efficiency has resulted in six consecutive quarters of operational improvements across all key metrics.
DSP Groupreturned to positive GAAP operating and net income in the most recent fiscal quarter.
Under the leadership of the current Board,
DSP Grouphas become the market leader in DECT connectivity in the Home Gateway (HGW) market. Year-to-date the Company has expanded its leadership position by shipping HGW products to 13 service providers worldwide, almost twice the number of service providers we shipped to in 2012.
DSP Groupis one of the founding members of the ULE Alliance, spearheading the evolution of DECT from a voice-only wireless standard into a control network ecosystem for home and building automation via new ULE (Ultra Low Energy) protocols.
DSP Group has successfully expanded its presence in the Office/ Enterprise market, becoming the third largest player in less than three years. The Company's VoIP revenues increased 39% year-over-year in 2012 and this rapid growth is expected to continue for the foreseeable future.
The Board's vision to take the Company's 25+ year history in voice processing into the mobile world became a reality during the first quarter of 2013 with the launch of the DBMD2 chipset powered by
DSP Group'sproprietary HDClear technology. The Company is now delivering engineering samples of this ground-breaking product and has begun evaluations with leading OEMs and mobile network operators globally.
DSP Group'sstock is one of the top performing stocks in our industry over the last 12 months and year-to-date
DSP Grouphas made significant operational and financial progress over the last 12 months
DSP Grouphas a clear, concise growth strategy and is on track to meet its strategic goals
- DSP Group Board nominees are diverse and have significant strategic, operational, financial and public board experience in our areas of focus and in the places where our operations are performed
We urge all stockholders to vote their GOLD proxy form to re-elect the Board's nominees and to help build long-term value for ALL stockholders.
Even if you have previously returned a white voting instruction form to Starboard, you have every right to change your vote and support your board's nominees using the enclosed GOLD voting instruction form. Only your latest dated, validly executed vote will count.
If you have any questions or need assistance voting your shares, please call our proxy solicitor
Thank you for your continued support.
The Company has filed with the
Certain Information Regarding Participants
The Company, its directors and certain of its officers may be deemed to be participants in the solicitation of the Company's stockholders in connection with its 2013 annual meeting. Information regarding the names, affiliations and direct and indirect interests (by security holdings or otherwise) of these persons can be found in the Company's definitive proxy statement and the proxy supplement for its 2013 annual meeting, which were filed with the
Non-GAAP Financial Information
This letter contains references to non-GAAP financial measures. See DSP Group's current report on Form 8-K, filed with the
Certain statements in this letter qualify as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Such statements are based on current expectations, and
CONTACT: Investor Relations
Christopher BastaDirector of Investor Relations, DSP GroupWork: 1-408-240-6844 Cell: 1-631-796-5644 firstname.lastname@example.org Daniel H. Burch, CEO MacKenzie Partners, Inc.Work: 1-212-929-5748 Cell: 1-516-429-2722 email@example.com Paul R. Schulman, EVP MacKenzie Partners, Inc.Work: 1-212.929.5364 Cell: 1-203.856.6080 firstname.lastname@example.org Media Relations Mike Sitrickand Jeff Lloyd Sitrick And CompanyWork: 1-310-788-2850 Jeff_Lloyd@sitrick.com Mike_Sitrick@sitrick.com