SAN JOSE, Calif., Feb. 17, 2017 /PRNewswire/ -- Cypress Semiconductor Corporation ("Cypress") (NASDAQ: CY) today confirmed that former CEO and Director T.J. Rodgers, who stepped down last year and who holds less than 3% of the Company's outstanding shares, has filed a lawsuit demanding books and records of Cypress and submitted nominations for two candidates for election to the Board of Directors (the "Board") at the Company's 2017 Annual Meeting of Stockholders.
The Company issued the following statement in response:
"We are disappointed that Mr. Rodgers has chosen to take these actions against Cypress and to malign the integrity of Cypress, its directors and its executives without basis. Cypress has the utmost respect for the rights of stockholders to voice their concerns, but will not be coerced into advancing the self-serving agenda of an individual. Mr. Rodgers recently transitioned out of Cypress and with due respect for his many contributions as founder, it is unfortunate that he has chosen to act in this disruptive and potentially value-destructive manner.
"Cypress is committed to maintaining a highly qualified and experienced Board, which is especially important as we transition from a founder-led company to our next stage of growth. Our Board has a defined process to evaluate candidates, and the Nominating and Corporate Governance Committee met with and evaluated Mr. Rodgers' nominees.
"The Company is at a critical juncture in its history and remains squarely focused on executing its Cypress 3.0 strategy. While we are hesitant to bring on a former director of the Company closely associated with Mr. Rodgers, and who would not meet independence standards under Nasdaq rules, in effort to avoid the costly distraction of a proxy contest and having to defend ourselves against Mr. Rodgers' baseless litigation, we offered to expand the Board from seven to eight directors and appoint Daniel McCranie as a director of the Company. The appointment was conditional upon Mr. Rodgers dismissing his lawsuit against the Company and entering into customary and appropriate standstill and non-disparagement provisions.
"However, Mr. Rodgers rejected this proposal and, in addition to demanding that both his hand-picked candidates be put on the Board, he would not agree to dismiss his meritless lawsuit. As such, and after careful consideration, the Board has determined it is not in the best interest of all stockholders to add Mr. Rodgers' nominees under these terms and has rejected his demands.
"Regarding Mr. Rodgers' lawsuit, Cypress' independent directors and outside counsel reviewed his claims and determined they are speculative and without merit. Cypress is committed to best-in-class corporate governance practices and has clear policies in place at all levels of the company to ensure that we take the appropriate steps to guard against conflicts of interest.
"By executing our Cypress 3.0 strategy, we are positioning the Company for long-term growth by expanding the reach of our innovative embedded systems and solutions in high-growth markets, including automotive, IoT and industrial. Our Board played an instrumental role in developing our strategy, and the Company's strong performance in the fourth quarter and for fiscal year 2016 demonstrates that our strategy to diversify our business into fast-growing segments is beginning to take hold.
"Under the leadership of Executive Chairman Ray Bingham and CEO Hassane El-Khoury, we are making solid progress toward building a more focused, stronger and more competitive Cypress. As we look ahead, we are confident in our Cypress 3.0 strategy and the long-term value that it can deliver to stockholders. We believe that a highly qualified, innovative and forward-thinking Board is essential to our ability to successfully execute our growth plans, while anticipating and staying ahead of rapidly changing industry dynamics."
Strengthening Corporate Governance
Cypress also today announced steps to strengthen its corporate...