Cypress descends into all out war

Cypress descends into all out war

Business news |
By Nick Flaherty

Executive Chairman Ray Bingham, former CEO of Cadence Design Systems and director of ST Microelectronics, has stepped down after a lawsuit accused the company of a conflict of interest. He co-founded venture fund Canyon Bridge, which bought FPGA designer Lattice Semiconductor in November with backing from the Chinese state-owned China Venture Capital Fund.  

The new chairman, Steve Albrecht, former CEO of memory chip maker Spansion, and the newly appointed CEO of Cypress, Hassane El-Khoury, have written to shareholders about the wider row around ‘Cypress 3.0’, the re-invention of the company from a memory maker through an application specific controller maker to a ‘fab-lite’ solutions company.

TJ Rogers wants more engineers on the board, while the board is proposing more marketing and sector specialists.

“It has been a great privilege to serve as Chairman of Cypress’ Board of Directors and most recently Executive Chairman, alongside some of the smartest minds in the business, at such an important time in Cypress’ history,” said Bingham. “In the last year, we have accomplished a great deal, including removing an underperforming CEO who was no longer right for the company, and appointing a dynamic CEO who I believe will continue to lead the Company upward and implement the successful turnaround driven by the Cypress 3.0 strategy.” He was executive chairman as El-Khoury was appointed as CEO in December last year.  

“On behalf of the full Board, I want to thank Ray for his years of contributions to Cypress,” said W. Steve Albrecht, the new Chairman of Cypress. “His extensive experience and deep industry knowledge played an enormous part in the turnaround that started with the removal of TJ Rodgers as CEO and member of the Board and culminated with the appointment of Hassane as the new CEO and his formulation and execution of the Cypress 3.0 strategy.”

Next: Lawsuits

In April Rodgers sued the board. “Cypress stockholders have a right to accurate and complete information before voting at the annual meeting, yet the Cypress Board continues to ignore its Duty of Candour by misleading stockholders regarding Mr. Bingham’s conflicts as well as the Board’s own failure to address this serious problem, which it has known about at least since December 9, 2016 when I wrote a private letter describing the problem and urging Board action,” he said.

“As a major Cypress fan and major stockholder with most of my net worth invested in the Company, I am driven by my belief that these serious wrongdoings, unaddressed by the Cypress Board, are a threat to stockholder value,” he said.

While this led to Bingham stepping down today, the board has been even more critical of Rodgers.

“The Board and the management team are committed to Cypress 3.0 and feel very strongly that we cannot return to the old ways of TJ Rodgers,” they said in the public letter to shareholders today. “We think the vote is actually a referendum on a much broader issue. Very fundamentally, [the vote] is a big step toward preventing the return of TJ to a disruptive position of influence – a position that, to the benefit of us all, we worked so hard to remove and we believe he will relentlessly seek to reacquire. Many of you have told us you share our and management’s deep concern that even the spectre of TJ’s return is, and will remain, a significant disruptive force.”

The delayed Annual General Meeting of Cypress Semiconductor takes place in California on June 20th.

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