The full text of the letter follows:
May 07, 2018
Dear Fellow Shareholders,
At Mellanox's extraordinary general meeting of shareholders ("extraordinary general meeting") on May 24, 2018, you will be asked to vote in favor of two best-in-class governance proposals that will allow shareholders to vote for the individual director candidates of their choosing at Mellanox's 2018 annual general meeting of shareholders ("annual general meeting").
The two proposals on which you will vote are:
Plurality Voting in the Event of a Contested Election
A plurality vote standard has been adopted by the vast majority of U.S.-listed companies for contested elections. In a contested election under our current majority voting standard, it would be possible for fewer than 11 director candidates to receive the necessary majority of votes cast as required to be elected. Any vacancies would then be filled by the majority-elected directors rather than by our shareholders. With a plurality vote standard, the Mellanox Board of Directors ("Board") would consist of the director nominees receiving the greatest number of votes. Therefore, all of the directors who serve on the Board would be elected directly by our shareholders.
Use of Universal Proxy Cards in the Event of a Contested Election
Therefore, all The adoption of a universal proxy card will provide for all nominees put forth by either the Board or a shareholder of Mellanox to be listed together on any proxy card sent to shareholders.
- Institutional Shareholder Services Research Note, March 28, 2018
Mellanox is focused on executing its long-term growth strategy. The Company is expanding its market share and growing while maintaining its competitive advantage of superior technology to create cutting-edge solutions for Infiniband and 25 gigabit per second and above Ethernet. At the same time, the Company continues to optimize efficiencies, rationalize investments and improve operating margins.
In fact, Mellanox's strong first quarter 2018 earnings performance was a result of the successful execution of its growth strategy. First quarter revenue of $251 million exceeded the top end of the Company's upwardly revised first quarter outlook of $240 to $250 million, and increased 33 percent year-over-year. First quarter Ethernet revenues increased 70 percent year-over-year, primarily due to expanding customer adoption of 25 gigabit per second and above products globally. Mellanox is benefiting from strategic investments made in prior years and is now a primary global supplier of 25 gigabit per second Ethernet adapters. First quarter non-GAAP operating margin of 21% exceeded Mellanox's prior full year 2018 forecast of 18% to 19%, demonstrating Mellanox's commitment to deliver higher operating leverage. Further, the increased full year 2018 outlook of 21% to 22% is based on the strength of the first quarter and the increased visibility into market trends for the remainder of 2018.
In addition to continued focus on innovation, Mellanox remains committed to delivering increasing levels of operating leverage during 2018. The Company is focusing investments on businesses with significant potential for growth and high return on invested capital. Due to ongoing tight control on operating expenses, the Company expects its second quarter non-GAAP operating expenses to be flat to down on a sequential basis.
Looking ahead, Mellanox believes its strong product cycles and share gain momentum have potential to allow for substantial growth, while also allowing for improvements to our overall profitability.
The Board and management team continue to work to provide enhanced value to our shareholders. Along with this letter, you will find the proxy materials necessary to vote on our best-in-class governance proposals: establishing a plurality vote standard and requiring the use of a universal proxy card for contested elections. Definitive copies of the proxy materials have been filed with the U.S. Securities and Exchange Commission ("SEC") and are publicly available at https://www.stockholderdocs.com/mlnx
The Board is committed to protecting and growing your investment. Voting "FOR" each of these two proposals at the extraordinary general meeting will align our governance policies with best practices to protect your interests and ensure that the composition of the Board fairly reflects your intentions.
The accompanying notice and proxy statement of the extraordinary general meeting contain details about the business to be conducted at the extraordinary general meeting. Please read these documents carefully.
Sincerely,
Irwin Federman Chairman of the Board
Eyal Waldman President, CEO and Director
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VOTE TODAY "FOR" THE TWO BEST-IN-CLASS GOVERNANCE PROPOSALS ON THE PROXY CARD |
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If you have any questions or need assistance in completing the
proxy card, |
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| (212) 929-5500 (Call Collect) |
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Call Toll-Free (800) 322-2885 |
About
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This release contains "forward-looking statements" (as defined in the
Private Securities Litigation Reform Act of 1995). These statements are
based on Mellanox's current expectations and involve risks and
uncertainties, which may cause results to differ materially from those
set forth in the statements. The forward-looking statements may include
statements regarding actions to be taken by
A reconciliation of GAAP to non-GAAP condensed consolidated statements
of operations is presented with our Press Release dated
Important Additional Information and Where You Can Find It
The Company and certain of its directors and executive officers may be
deemed to be participants in a solicitation of proxies in connection
with the matters to be considered at the extraordinary general meeting
and the annual general meeting. Information regarding the names of the
Company's directors and executive officers and their respective
interests in the Company by security holdings or otherwise is set forth
in the Company's definitive proxy statement for its extraordinary
general meeting, filed with the
The Company has furnished or intends to furnish its definitive proxy
statements and WHITE proxy cards for the extraordinary general meeting
and the annual general meeting to each shareholder entitled to delivery
of a proxy, and has filed or intends to file such definitive proxy
statements and WHITE proxy cards with the