Israeli big data interconnect company Mellanox Technologies Ltd. (Nasdaq:MLNX) last night announced that it has entered into an agreement with Starboard Value LP and its affiliates regarding the membership and composition of Mellanox's board of directors, among other things.
Under the terms of the agreement, Jon Olson and Greg Waters, independent directors recommended by Starboard, and Jack Lazar, an independent director mutually agreed upon by Mellanox and Starboard, have been appointed to the Mellanox Board, effective immediately. In connection with today's agreement, Dov Baharav, Shai Cohen and Tom Riordan have stepped down from the Board. Thom Weatherford has also agreed to serve as chair of the audit committee until March 2, 2019, at which time he will step down from the Board. The agreement also provides Starboard the right to appoint a direct representative to the Board if certain operating performance thresholds are not met in 2018 or certain last twelve months periods during 2019.
Mellanox chairman Irwin Federman said, "We are pleased to have reached this agreement with Starboard and welcome the new directors to the Mellanox board. Jack, Jon and Greg will bring valuable experience and perspectives to the board, and we look forward to working closely with them to create further value for shareholders. Along with the work being performed by PwC, these new directors will help to enhance our continued focus on generating above market revenue growth with significantly improved profitability."
Mellanox president and CEO Eyal Waldman said, "Today's announcement reflects our ongoing commitment to creating value for shareholders. Mellanox has leading positions in many of the key markets in which we operate, including InfiniBand and Ethernet, and I look forward to working together with Jack, Jon, and Greg, along with the rest of the board, to ensure that Mellanox continues to build on its strong financial performance. We remain fully focused on executing our deliberate investment strategy to continue achieving operational excellence, building on our strong momentum and capitalizing on the significant market opportunities ahead for Mellanox."
Starboard managing member Peter Feld said, "We are pleased to have worked constructively with the Board and management team to reach this solution. Mellanox is an outstanding company with great potential for future growth and significantly higher profitability. We are confident that the new Board will provide effective governance and oversight, and we look forward to a continuation of improved results on the top and bottom line."
As part of the agreement, Starboard, which has a 10.5% stake in Mellanox, will withdraw its slate of directors and vote all of its shares in favor of each of Mellanox's board nominees at the company's upcoming Annual Meeting of Shareholders on July 25 2018.
Starboard will also be subject to certain customary standstill provisions for a period ending prior to the 2019 Annual General Meeting or, if Starboard does not nominate directors for election at the 2019 Annual General Meeting, for a period ending prior to the 2020 Annual General Meeting.
Published by Globes [online], Israel business news - www.globes-online.com - on June 20, 2018
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