MRO Magazine

Ultratech Comments on ISS Report


July 5, 2016
By Business Wire News

SAN JOSE, Calif.

Ultratech, Inc. (Nasdaq:UTEK), a leading supplier of lithography, laser­processing and inspection systems used to manufacture semiconductor devices and high­brightness LEDs (HB­ LEDs), as well as atomic layer deposition (ALD) systems, today issued the following statement in response to a July 1, 2016 report by Institutional Shareholder Services (“ISS”) regarding the election of directors to Ultratech’s Board of Directors at the Company’s 2016 Annual Meeting of Stockholders, to be held on July 19, 2016.

Ultratech strongly believes that ISS reached the wrong conclusion in failing to recommend that stockholders vote “FOR” all seven of Ultratech’s experienced and highly-qualified director nominees. We believe ISS’ analysis is flawed and reflects a fundamental misunderstanding of Ultratech’s business, performance and cyclical nature of its industry. We encourage stockholders to look closely at the facts to understand the actions the Company has already taken.

Ultratech’s Board and management team are actively and effectively executing a strategic plan to enhance stockholder value. We believe that the Company’s highly qualified and experienced director nominees are best positioned to achieve this goal given their significant and relevant experience in the semiconductor industry as well as their strong track records of execution.

As a result of the successful execution of its strategy, Ultratech’s stock price is up more than 21 percent over the last 12 months1. We maintain our technology and industry leadership across a number of applications and have made significant progress in our re-prioritization of R&D for both technology future needs and reduction in cost of ownership. The Company continues to outperform its peer group on a total stockholder return basis and our stock price is up approximately 16 percent since the beginning of this year1. Ultratech is confident that the continued execution of its strategy and its portfolio of high-value products will enable the Company to capitalize upon our current momentum to enhance value for all of our stockholders.

Given the relatively small size of Ultratech’s markets and the unique cyclical nature of the semiconductor equipment industry, identifying director candidates with the right qualifications and skill sets takes time. As such, similar to many of its peers, Ultratech’s Board is comprised of directors with longer than average tenure as they have experience necessary to oversee the execution of the Company’s strategy and deliver long term stockholder value.

Of course, Ultratech recognizes that bringing new and fresh perspectives to its Board is important to value creation and is in the process of refreshing its Board through the nomination of Dr. Paramesh Gopi, President and Chief Executive Officer of Applied Micro.

Initially identified by an independent stockholder, Dr. Gopi was nominated based on his experience serving in senior operating positions of publicly traded semiconductor companies, deep technology background and established relationships with several foundries, including primary foundry TSMC, as well as secondary foundries SMIC, UMC, Global Foundries and Samsung.

In addition, Ultratech has had a longstanding management succession plan whereby Bruce R. Wright, Chief Financial Officer, would succeed as CEO in the event Art Zafiropoulo could not perform his duties. In February 2016, Ultratech announced a longer-term succession plan with the promotion of two individuals to executive officer positions – Tammy D. Landon and Dave Ghosh. Each of Ms. Landon and Mr. Ghosh has more than 30 years of experience in relevant industries and positions.

Importantly, we disagree with ISS’ assessment of Neuberger Berman’s director nominees Ronald Black and Beatriz Infante, both of whom have records of consistently suboptimal performance with regard to their board and/or managerial experience at other companies. Each of Dr. Black and Ms. Infante has piloted several companies into bankruptcy, including MobiWire for Dr. Black and Momenta for Ms. Infante.

  • Specific to Dr. Black:
    • Ultratech has received unfavorable feedback from a number of its customers regarding Dr. Black and his position as President and CEO of Rambus.
      • Rambus has established a reputation for patent litigation within the industry, thereby threatening Ultratech’s relationship with several of its customers.
      • Despite touting that Rambus’ stock price doubled (to around $11.57) while Dr. Black has been CEO, Rambus’ stock price continues to trade well below its peak stock price over the last 10 years of $24.40 per share.
    • If elected to Ultratech’s Board, Dr. Black would sit on the board of directors of five companies, both public and private, including Rambus, and would be an “overboarded” director.
    • The sale of Wavecom under Dr. Black’s leadership for €8.50 per share represented a discount of more than 37 percent to Wavecom’s initial public offering at €13.50 per share.
  • Specific to Ms. Infante:
    • During her tenure as President, CEO and Chairman of Aspect Communications Corporation, Aspect’s share price declined from $34.442 to $7.533, representing a decline of more than 78 percent.
    • Has had a problematic history at numerous other publicly traded companies where she was a director or executive officer:
      • Liquidity, Current Director – Stock down approximately 59 percent.
      • Sonus, Current Director – Stock down approximately 30 percent.
      • Emulex Corp., Past Director – Voted in favor of selling Emulex for $8 per share when an $11 per share offer was on the table only a few years prior. She was also the defendant in a stockholder suit.

Given ISS’ lack of understanding of the key facts, Ultratech’s Board and senior management are available to speak with any and all stockholders to offer context and answer questions about the Company’s strategy, performance and corporate governance.

The Ultratech Board is composed of carefully selected and highly-qualified directors with a deep understanding of and relevant experience in the semiconductor industry. The Company’s director nominees are best positioned to execute its current strategy for growth and stockholder value creation.

We strongly urge Ultratech stockholders to protect the value of their investment by voting “FOR” all seven of the Company’s director nominees on the WHITE proxy card today.

Ultratech stockholders are reminded that their vote is extremely important, no matter how many or few shares they own. The Ultratech Board unanimously recommends that stockholders vote on the WHITE proxy card “FOR” all seven of the Company’s highly qualified and experienced director nominees – Arthur W. Zafiropoulo, Michael Child, Paramesh Gopi, Nicholas Konidaris, Dennis R. Raney, Henri Richard and Rick Timmins.

Whether or not stockholders plan to attend the 2016 Annual Meeting, they have an opportunity to protect their investment in Ultratech by voting the WHITE proxy card. Ultratech urges stockholders to vote today by telephone, by Internet or by signing and dating the enclosed WHITE proxy card and returning it in the postage-paid envelope provided. Stockholders may receive an opposing proxy statement and goldproxy card, as well as letters or other proxy solicitation materials from Neuberger Berman. Please do not return or otherwise vote any proxy card sent by Neuberger Berman.

For more information, please visit Ultratech’s investor relations website at http://ir.ultratech.com.

 

Every Vote Is Important, No Matter How Many Or How Few Shares Stockholders Own.

Please vote the WHITE proxy card TODAY. If stockholders have any questions or require any
assistance with voting your shares or if you need additional copies of the proxy materials, please
contact:

 

D.F. King & Co., Inc.

48 Wall Street
New York, NY 10005
 

Stockholders May Call Toll-Free: (800) 252-8173

Banks & Brokers May Call: (212) 269-5550

 
 

About Ultratech

Ultratech, Inc. (Nasdaq: UTEK) designs, builds and markets manufacturing systems for the global technology industry. Founded in 1979, Ultratech serves three core markets: front­end semiconductor, back­end semiconductor, and nanotechnology. The Company is the leading supplier of lithography products for bump packaging of integrated circuits and high­ brightness LEDs. Ultratech is also the market leader and pioneer of laser spike anneal technology for the production of advanced semiconductor devices. In addition, the Company offers solutions leveraging its proprietary coherent gradient sensing (CGS) technology to the semiconductor wafer inspection market and provides atomic layer deposition (ALD) tools to leading research organizations, including academic and industrial institutions. Visit Ultratech online at: www.ultratech.com.

Important Additional Information

In connection with the solicitation of proxies, Ultratech, Inc. (“Ultratech”) has filed with the Securities and Exchange Commission (the “SEC”), a definitive proxy statement and other relevant documents concerning the proposals to be presented at Ultratech’s 2016 Annual Meeting of Stockholders (the “2016 Annual Meeting”). The proxy statement contains important information about Ultratech and the 2016 Annual Meeting. In connection with the 2016 Annual Meeting, Ultratech has mailed the definitive proxy statement to stockholders. In addition, Ultratech files annual, quarterly and special reports, proxy statements and other information with the SEC. You are urged to read the proxy statement and other information because they contain important information about Ultratech and the proposals to be presented at the 2016 Annual Meeting. These documents are available free of charge at the SEC’s website (www.sec.gov) or from Ultratech at our investor relations website (http://ir.ultratech.com). The contents of any websites referenced herein are not deemed to be incorporated by reference into the proxy statement.

Ultratech and its directors, executive officers and certain employees may be deemed to be participants in the solicitation of proxies from Ultratech’s stockholders in connection with the election of directors and other matters to be proposed at the 2016 Annual Meeting. Information regarding the interests, if any, of these directors, executive officers and specified employees is included in the definitive proxy statement and other materials filed by Ultratech with the SEC.

Forward-Looking Statements

This release includes forward­looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward­looking statements can generally be identified by words such as “anticipates,” “expects,” “remains,” “thinks,” “intends,” “believes,” “estimates,” and similar expressions and include management’s current expectation of its longer term prospects for success. These forward­looking statements are based on our current expectations, estimates, assumptions and projections about our business and industry, and the markets and customers we serve, and they are subject to numerous risks and uncertainties that may cause these forward­looking statements to be inaccurate. Such risks and uncertainties include the timing and possible delays, deferrals and cancellations of orders by customers; quarterly revenue fluctuations; industry and sector cyclicality, instability and unpredictability; market demand for consumer devices utilizing semiconductors produced by our clients; our ability to manage costs; new product introductions, market acceptance of new products and enhanced versions of our existing products; reliability and technical acceptance of our products; our lengthy sales cycles, and the timing of system installations and acceptances; lengthy and costly development cycles for laser­processing and lithography technologies and applications; competition and consolidation in the markets we serve; improvements, including in cost and technical features, of competitors’ products; rapid technological change; pricing pressures and product discounts; our ability to collect receivables; customer and product concentration and lack of product revenue diversification; inventory obsolescence; general economic, financial market and political conditions and other factors outside of our control; domestic and international tax policies; cybersecurity threats in the United States and globally that could impact our industry, customers, and technologies; and other factors described in our SEC reports including our Annual Report on Form 10­K filed for the year ended December 31, 2015 and our Quarterly Report on Form 10-Q filed for the quarterly period ended April 2, 2016. Due to these and other factors, the statements, historical results and percentage relationships set forth herein are not necessarily indicative of the results of operations for any future period. We undertake no obligation to revise or update any forward­looking statements to reflect any event or circumstance that may arise after the date of this release.

(UTEKF)

1 Based on Ultratech’s closing stock price on June 23, 2016, the last trading day prior to announcement of the results of the referendum vote on the United Kingdom leaving the European Union.

2 Aspect’s closing stock price on April 5, 2000, the last trading day prior to the announcement of Ms. Infante’s appointment as Aspect’s President and CEO.

3 Aspect’s closing stock price on August 17, 2003, the last trading day prior to the announcement of Ms. Infante’s departure from Aspect.

Ultratech, Inc.
Bruce R. Wright, 408-321-8835
Senior Vice President and CFO
or
Investor Relations:
The Blueshirt Group
Suzanne Schmidt, 415-217-4962
suzanne@blueshirtgroup.com
Melanie Solomon, 415-217-4964
melanie@blueshirtgroup.com
or
Media Relations:
Joele Frank, Wilkinson Brimmer Katcher
Steve Frankel / Nick Leasure, 212-355-4449