Caesarstone Sets Facts Straight in Response to Kibbutz's Recent Letters to Shareholders
Refutes False Claims Made by Kibbutz About Caesarstone's Investor
Presentation, Urges Shareholders to Vote "FOR" ALL Seven of
Caesarstone's Nominees and "AGAINST" the Kibbutz's Two Nominees on the WHITE
MENASHE, Israel--(BUSINESS WIRE)--
Caesarstone Sdot Yam Ltd. (NASDAQ:CSTE) ("Caesarstone" or the "Company")
takes this opportunity to respond to the statement released by Kibbutz
Sdot-Yam (the "Kibbutz") on November 23, 2015, in which the Kibbutz
re-published its letter to Caesarstone shareholders alleging
inaccuracies in the Company's recent presentation to a leading
independent proxy advisory firm, Institutional Shareholder Services Inc.
("ISS"). As outlined below, the Kibbutz's letter misrepresents both the
Company's position and the background of the current contested election.
The Company reiterates its belief that the Kibbutz's nominees will not
act in the best interest of shareholders and that, in contrast, the
Company's nominees offer an appropriate combination of stability and
innovation. Shareholders are urged to follow the recommendations of
leading independent proxy advisory firms ISS, Glass Lewis & Co., LLC
("Glass Lewis") and Egan-Jones Proxy Services ("Egan-Jones") to vote "FOR"
ALL seven of Caesarstone's director
nominees - Moshe Ronen, Shachar Degani, Amihai
Beer, Amit Ben Zvi, Ronald Kaplan, Yonatan Melamed and Ofer Tsimchi
- and "AGAINST" the two opposition director nominees of Kibbutz
Sdot-Yam (the "Kibbutz") - Amnon Dick and Yitzhak (Itzick) Sharir - on
the WHITE proxy card.
Your vote is important. In the event that more than seven nominees
receive the affirmative vote of holders of a majority of the voting
power represented at the Company's annual general meeting of
shareholders (the "Meeting") to be held on December 3, 2015, the seven
nominees who receive the highest number of affirmative votes in favor of
their election out of these nine nominees will be elected to serve as
The Kibbutz's Claims
Whatever the outcome of the vote, the Kibbutz will have only three
out of nine directors on the board.
If the Kibbutz's nominees are elected, five directors on the
Company's nine-person board will have ties to the Kibbutz,
including the three Kibbutz members nominated by the Company and
two directors hand-picked by the Kibbutz in place of the
independent directors proposed by the independent nominating
committee and board.
The Kibbutz has stated that if the size of the board is
increased above nine directors, it would seek to nominate
additional directors. In other words, the Kibbutz wants a
majority of board members to be its affiliates or nominees.
The Kibbutz favors nominating an independent chairman to the board
and voluntarily gave up the chairmanship by asking Maxim Ohana, a
Kibbutz member, not to run for reelection as chairman of the
The Company's independent nominating committee asked Mr. Ohana
to remain as Chairman due to his impeccable service and history
of acting in the best interests of all shareholders since the
Company's initial public offering. However, the Kibbutz refused
The Kibbutz's actions underscore its quest for control. The
Kibbutz wished to nominate someone else as chairman because it
believed that Mr. Ohana did not sufficiently advocate for the
The Kibbutz proposes to replace Mr. Melamed, who is an
independent director and was selected by the board to replace
Mr. Ohana as a chairman. It is apparently the Kibbutz's intent
that the new chairman be elected by the board once it is
comprised of a majority of directors that are the Kibbutz's
affiliates or nominees.
The Kibbutz seeks to add two directors with complete independence.
The Kibbutz's hand-picked nominees will not exhibit "complete
independence." Kibbutz nominee Amnon Dick previously served as
director of Nicevend Ltd., a company in which the Kibbutz is a
The Kibbutz failed to disclose Mr. Dick's past directorship on
Nicevend Ltd. in its own proxy statement
The Kibbutz's director nominees are highly qualified.
Glass Lewis and Egan-Jones found in their reports that the
Kibbutz's nominees do not appear to possess sufficient executive
or public director experience.
Neither Kibbutz nominee has the credentials relevant to the
Company's profile as a home-building products manufacturer.
The Kibbutz suggested and introduced Ronald Kaplan to the Company's
nominating committee after engaging JPMorgan.
The Kibbutz published a press release on November 25, 2015 in
order to correct its previous release of November 23, 2015. In
contrast to what it previously claimed, the Kibbutz did not
engage JPMorgan to provide services to it in locating a U.S.
qualified director. The Kibbutz confirmed that such services
were provided to the Company.
The Company appreciates this correction, but hopes the Kibbutz
will correct the other inaccuracies identified by the Company.
Company nominee Ronald Kaplan was nominated to improve the Company's
board of directors and corporate governance.
The Company approached Mr. Kaplan aiming to have an experienced
U.S. director serving on the board.
In a letter written to the Company's board (included in the
Company's presentation to ISS), Mr. Kaplan praised the very
slate of Company nominees that the Kibbutz argues will promote
bad corporate governance, and described the Kibbutz's proxy
contest as "not serv[ing] a productive purpose."
Mr. Kaplan stated that he was expecting to serve only alongside
the Company's board nominees, who, like him, were proposed and
vetted by the nominating committee.
Last year, the Kibbutz suggested five qualified and independent
candidates as part of the nominating committee's search, and
management rejected each one for no reason.
Any nominees suggested last year by the Kibbutz were rejected by
the Company's nominating committee and NOT by management.
Director nominations are overseen by the nominating committee
and not by management.
The Kibbutz presented various candidates to the Company's board
earlier this year before nominating Messrs. Sharir and Dick.
However, all candidates were Kibbutz members and none was
Last year, the board included five directors affiliated with the
Kibbutz and another director who was a Kibbutz nominee. Two
Kibbutz nominees resigned from the board in September.
The Kibbutz has endeavored to work with the board to put forward
exceptional and well-respected candidates.
The Kibbutz waited until just hours before the Company's third
quarter earnings call to spring the names of its nominees,
Messrs. Dick and Sharir.
The Kibbutz failed to give the Company's independent nominating
committee an opportunity to vet Mr. Dick, and only informed the
Company that it was even considering him for the first time when
the Kibbutz officially announced his candidacy in November.
The Company's independent nominating committee vetted Mr.
Sharir, but ultimately decided not to recommend him to the board.
All of the Kibbutz's requests to meet with the Company have gone
The Company's nominating committee met with the Kibbutz several
times prior to forming its recommendation to the board with
respect to the Company's board slate.
After launching its campaign, the Kibbutz refused to respond to
multiple invitations by the Company to discuss the Kibbutz's
concerns, including formal written communication to the
Kibbutz's lawyers proposing a meeting with the Kibbutz.
The Kibbutz has tried to harm efforts at reconciliation by
instructing its legal counsel to send warning letters to the
Company, its directors and its CEO stating that they may not
speak to Kibbutz members.
Only last week, a few Kibbutz representatives agreed to meet
with representatives of the board. In such meeting, the
Kibbutz's representatives repeated their intent to fill the
board with their hand-picked nominees while at the same time
stating their appreciation for, and satisfaction with, the
Company's management. However, shortly afterward, the Kibbutz's
counsel sent another letter threatening legal action against the
The Company refuses to discuss the identity of director nominees.
The only new nominee proposed by the Company is Ronald Kaplan.
The other new nominee, Amit Ben Zvi, is interim chair of the
Kibbutz's economic council.
The Company has been completely transparent about the board
The CEO does not permit the board to meet without his presence and
exercises undue influence on the board of directors, compromising
their independence. The CEO dominates the board.
The allegations raised by the Kibbutz against the CEO are
baseless. The board has noted the excellent performance of the
CEO throughout his term, and the tremendous achievements,
including ongoing growth, demonstrated by the Company under his
No member of management is a member of, or is nominated as, a
member of the Company's board, which is majority independent.
Board members possess significant influence on the content of
board meetings. Directors' recommendations for discussions are
frequently accepted, and under Israeli law, if two directors
request to include any matter on a board meeting's agenda, the
board must fulfill that request.
The CEO does not manage board meetings or agendas and it is at
the chairman's and the board's discretion who should attend
The Company's CEO is deeply involved in selecting board members and
attempts to influence internal Kibbutz procedures.
The nomination of directors is overseen solely by the Company's
nominating committee, comprised of three independent and highly
experienced directors. The CEO's view of the board, as well as
the Kibbutz's requests related to the board structure and
nominees, were considered by the committee as one factor in its
absolutely independent vetting process.
The CEO has not attempted to influence any Kibbutz procedures,
but upon receipt by the Company of the Kibbutz's notice of its
proxy contest a few hours before the release of the Company's
third quarter results, he approached the Kibbutz's authorized
representative suggesting that the Kibbutz reconsider its plan.
Mr. Melamed's relationship with the Company's CEO hinders his
ability to challenge the CEO's decisions or exercise independent
Mr. Melamed has served as an independent director for the past
eight years, and is considered independent by ISS and Glass
The Kibbutz supported Mr. Melamed in seven consecutive elections
without raising any concern about his impartiality.
Mr. Melamed was recommended to serve as chairman after Mr. Ohana
completed his tenure by the entire current board (including the
board members affiliated with the Kibbutz, two of whom are
promoting the Kibbutz's current campaign against Mr. Melamed's
Ofer Tsimchi worked as a director alongside the Company's CEO at
Tefron Ltd. for three years, casting doubt on his independence as a
director at Caesarstone.
Mr. Tsimchi served as an external director at Tefron Ltd. Under
Israeli law, external directors are elected for a three-year
Mr. Tsimchi was recommended a year ago by the Company's
nominating committee. Prior to his nomination, he was also
interviewed by the Kibbutz and received its support. Mr.
Tsimchi's past tenure as an external director at Tefron, at the
time it was managed by the Company's CEO, was known to the
Kibbutz, to the nominating committee and the board.
Mr. Tsimchi was elected by the shareholders with the unanimous
support of the board in 2014.
Caesarstone shareholders are reminded that their vote is extremely
important, no matter how many or how few shares they own. All
shareholders of record as of November 3, 2015 are entitled to vote at
the Meeting to be held on December 3, 2015. Caesarstone urges
shareholders to follow the recommendations of ISS, Glass Lewis and
Egan-Jones and to vote "FOR" ALL
seven of Caesarstone's director nominees - Moshe
Ronen, Shachar Degani, Amihai Beer, Amit Ben Zvi, Ronald Kaplan, Yonatan
Melamed and Ofer Tsimchi - and "AGAINST" the Kibbutz's
two director nominees - Amnon Dick and Yitzhak (Itzick) Sharir - on the WHITE
proxy card today. Your vote is important, as in the event that more than
seven nominees receive the affirmative vote of holders of a majority of
the voting power represented at the Meeting, the seven nominees who
receive the highest number of affirmative votes in favor of their
election out of these nine nominees will be elected to serve as
If shareholders have questions or need assistance in voting their shares
for the upcoming annual general meeting, they may contact Morrow & Co.,
Caesarstone's proxy solicitor. Morrow & Co. can be reached by dialing
+203-658-9400 or toll-free within the United States at 800-662-5200, or
via e-mail at CSTE@morrowco.com.
Caesarstone manufactures high quality engineered quartz surfaces, which
are used in both residential and commercial buildings as countertops,
vanities, wall cladding, floors and other interior surfaces. The wide
variety of colors, styles, designs and textures of Caesarstone®
products, along with Caesarstone's inherent characteristics such as
hardness, non-porous, scratch and stain resistance and durability,
provide consumers with excellent surfaces for their internal spaces
which are highly competitive to granite, manufactured solid surfaces and
laminate, as well as to other engineered quartz surfaces. Caesarstone's
four collections of products — Classico, Supremo, Motivo and Concetto —
are available in 55 countries around the world. For more information
about the Company, please visit our website www.caesarstone.com.
Information provided in this press release may contain statements
relating to current expectations, estimates, forecasts and projections
about future events that are "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements generally relate to the Company's plans,
objectives and expectations for future operations, including its
projected results of operations and the expected timing of expanding its
manufacturing facilities. These forward-looking statements are based
upon management's current estimates and projections of future results or
trends. Actual results may differ materially from those projected as a
result of certain risks and uncertainties. These factors include, but
are not limited to: the strength of the home renovation and construction
sectors; economic conditions within any of the Company's key existing
markets; actions by the Company's competitors; changes in raw material
prices, particularly polymer resins and pigments; fluctuations in
currency exchange rates; the success of the Company's expansion efforts
in the United States; the outcome of silicosis claims and the claim by
the Company's former quartz processor; unpredictability of seasonal
fluctuations in revenues; delays in manufacturing if the Company's
suppliers are unable to supply raw materials; and other factors
discussed under the heading "Risk Factors" in the Company's most recent
annual report on Form 20-F and other documents filed with the Securities
and Exchange Commission. These forward-looking statements are made only
as of the date hereof, and the Company undertakes no obligation to
update or revise the forward-looking statements, whether as a result of
new information, future events or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151130006183/en/
Source: Caesarstone Sdot Yam Ltd.
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