Kibbutz sdot-yam corrects inaccuracies made by caesarstone management
Menashe, israel--(business wire)--kibbutz sdot-yam, the founder and largest shareholder of caesarstone sdot-yam ltd. (nasdaq:cste) (“caesarstone” or the “company”), owning approximately 32.4% of the company’s outstanding shares, today sent the following letter to all caesarstone shareholders in response to assertions made by caesarstone management in its recent investor presentation. below the kibbutz corrects substantial inaccuracies put forth by management regarding the kibbutz’s proposed independent board candidates, the process for proposing these candidates and its interests in caesarstone. the kibbutz urges all caesarstone shareholders to vote the gold proxy card today to elect independent nominees yitzhak sharir and amnon dick to the caesarstone board of directors. the full text of the letter follows: dear fellow caesarstone shareholder: there has been a great deal of inaccurate information propagated by caesarstone management against the kibbutz, our interests and our independent director nominees. we want to take this opportunity to set the record straight. we hope doing so will help inform shareholders as they decide for themselves who the best directors are to help the company deal with its current challenges and achieve its true potential. the kibbutz seeks to control the company’s board regardless of the outcome of the vote, the kibbutz will have only 3 out of 9 directors on the board. the kibbutz voluntarily, without a request from other board members or management, gave up the chairmanship of the board, which the kibbutz had held since the company’s ipo, in order to ensure that the chairman would be independent. we are seeking to add 2 highly qualified directors with complete independence from both the kibbutz and from management. we believe these 2 individuals will provide accountability for the board and much needed oversight of management. the kibbutz’s interests are not aligned with those of the company’s public shareholders as founder and the largest shareholder of the company, with the vast majority of the kibbutz’s net worth invested in caesarstone, our interests in growing and maximizing shareholder value are completely aligned with all shareholders. the kibbutz’s investment in cste is by far our most valuable asset, representing more than 90% of our equity. we are laser-focused on enhancing the value of the company and its stock, which is precisely why we believe the board needs new, independent directors who will fulfill their fiduciary duty to enhance value for all shareholders. the directors proposed by the kibbutz are not independent the directors proposed from the kibbutz are not affiliated with the kibbutz and we have no material relationship with them. mr. dick was previously chairman of another company (for only 3 months, and was nominated by another stockholder) where we have a small interest as a stockholder, and we saw first-hand his skills and talent as a director. however, at the time we suggested him as a nominee for caesarstone, he was no longer on the board of nicevend ltd., nor in any way affiliated with the kibbutz. the kibbutz’s method of proposing candidates runs counter to notions of good governance we have done all we can to work with the board and nominating committee to put forward exceptional, independent and well-respected candidates. last year we suggested 5 qualified and independent candidates as part of the nominating committee’s search. management rejected each of them with no valid reason. the company refuses to even discuss with the kibbutz the identity of its director nominees. we have exhausted all other avenues of recourse. all our requests to meet with the company have gone unanswered. this proxy contest is our last resort to ensure truly independent directors are added to the board who can provide a counterbalance to management as well as oversight and accountability. management suggested and introduced director nominee ronald kaplan to the nominating committee as part of the search process for new, independent board candidates, the kibbutz, at its own initiative and expense, engaged jp morgan, to find a highly qualified and well-respected director in the u.s. that could join the board. jp morgan recommended mr. kaplan who was then interviewed by management and the board. contrary to management’s assertions, we proposed mr. kaplan as a nominee, since we believed and still believe that having a qualified american on the board is very important for the company. we fully support mr. kaplan’s candidacy on the cste board and hope that he, alongside the 2 independent nominees we are proposing, will bring about meaningful and much-needed improvement to caesarstone’s board of directors and corporate governance. we believe that having an american director is important to addressing the company’s largest growth opportunity in the u.s. the company has instituted strong corporate governance practices the ceo does not permit the board to meet in executive sessions in which the ceo is not present. the ceo exercises undue influence on several directors and it is apparent to us that their independence is compromised. the ceo is deeply involved in selecting board members. the ceo even tries to influence internal kibbutz procedures in its capacity as a shareholder. management’s nominees are both independent current director mr. melamed has established a close alliance with the company’s ceo after 8 years of service on the board. we have witnessed firsthand that this relationship hinders mr. melamed’s ability to challenge the ceo’s decisions, provide adequate oversight or exercise independent judgment. current director mr. tsimchi worked as a director alongside the company’s ceo at tefron ltd. for 3 years; we believe, and the experience of the past year has shown, that mr. tsimchi is similarly unlikely to challenge the ceo’s decisions or offer an objective and independent view. based on our experience, management's nominees will do nothing to correct the corporate governance lapses, which led 2 highly regarded directors to resign from the board in the last 3 months, and will continue to allow the ceo to dominate the board. vote the gold proxy card today! support good corporate governance and help realize caesarstone's true potential we recommend that you vote "for" each of the director nominees who are listed in proposals 1 and 3, and "against" each of the company's director nominees, who are listed in proposal 2. we furthermore recommend that you vote "against" proposal 4 (as the current chairman of the board is not among the candidates we are nominating or support) and "for" proposals 5, 6, 7 and 8 to be considered at the meeting. even if you have already completed and submitted the white proxy card or voting instruction form sent to you by the company's board of directors, you can still change your vote by submitting a later-dated gold proxy card or voting instruction form. only your latest-dated, validly executed proxy card will be counted at the meeting. if you have any questions, require additional copies of our proxy materials or need assistance in voting on your gold proxy card, please contact our proxy solicitor at the phone numbers or email listed below: 105 madison avenue new york, new york 10016 call toll-free (800) 322-2885 (north america) or collect at + (212) 929-5500 or email: proxy@mackenziepartners.com about sdot-yam founded in 1937 near haifa, israel, kibbutz sdot-yam, today based in caesarea, is the largest shareholder of caesarstone sdot-yam ltd. (nasdaq: cste), with approximately 32.4% of the shares in the company. initially formed as a fishing and agriculture enterprise, the kibbutz sdot-yam expanded to encompass industrial enterprises, including caesarstone, a global leader and pioneer in quartz surfaces for a variety of uses and applications such as kitchen countertops, bathroom vanities, flooring, wall cladding and more. launched by kibbutz sdot-yam in 1987, caesarstone products are available in more than 40 countries around the world.
