Starboard Delivers Open Letter To Shareholders Of Tessera Technologies

    Starboard Delivers Open Letter To Shareholders Of Tessera Technologies

Addresses False Statements Made by Board Regarding Starboard's Private Notice
of CEO's Potentially Inappropriate Conduct

Clarifies Terms of Private Settlement Proposal

Believes Majority Change in the Board Required Given Company's Dismal
Financial and Stock Performance, Failed Execution, Poor Governance Practices
and Troubling Recent Director Resignations

Urges Board to Follow Through on its Commitment and Formally Schedule a May
23, 2013 Annual Meeting

PR Newswire

NEW YORK, March 6, 2013

NEW YORK, March 6, 2013 /PRNewswire/ --Starboard Value LP (together with its
affiliates, "Starboard"), one the largest shareholders of Tessera
Technologies, Inc. (NASDAQ: TSRA) ("Tessera" or the "Company")with
approximately 7.4% of the outstanding common stock of the Company, announced
today that it has delivered an open letter to the shareholders of Tessera in
response to the "Open Letter to Starboard Value" issued by Tessera's Board of
Directors on March 4, 2013.

The full text of Starboard's letter is included below:

March 6, 2013

Open Letter to Shareholders of Tessera Technologies, Inc.

Dear Fellow Shareholders:

Starboard Value LP, together with its affiliates ("Starboard"), currently owns
approximately 7.4% of the outstanding common shares of Tessera Technologies,
Inc. ("Tessera" or the "Company"), making us one of the Company's largest
shareholders.

As you may be aware, Starboard conducts extensive diligence using publicly
available information in order to gain conviction in each of our investments.
During the course of the ongoing diligence process in connection with our
investment in Tessera, we became aware from sources, which we believe to be
credible, that the Company's CEO may have been engaging in inappropriate
behavior. This is not information that we set out to find. Rather, this was
information that was volunteered to us. Starboard generally does not seek to
raise personal issues in assessing the merits of changes at a company, and we
were therefore reluctant to even disclose this information to Tessera.
However, through continued diligence, we determined that the situation, if
true, may have serious negative implications for the operations of the
business and our investment. Therefore, we followed what we believed to be
proper protocol and made the Company's board of directors (the "Board") aware
of our concerns through a private letter so the Board could fully investigate
the matter. We did not publicly disclose any of this sensitive information
and had no intention to do so. In fact, the day after our private letter to
the Board, we released a public letter to shareholders in which we
intentionally omitted any reference to any personal issues.

A board of directors is supposed to serve as the shareholders' representatives
and oversee best governance practices. Whistleblower claims should be
delivered privately to the board of directors, and the board of directors has
a responsibility to investigate such matters. For this reason, we believe
that the Board's response on March 4, 2013 to the existence of potential
inappropriate conduct by Dr. Young is surprising and irresponsible. In our
experience, most well-functioning boards would respond to such allegations
privately by committing to fully investigate the situation and take
appropriate actions, as necessary. In the letter to Starboard, the Board
stated, "In the meantime please note that the Board unanimously stands behind
our CEO Dr. Young." We are concerned that the Board may be standing behind
Dr. Young without first having formally investigated this potentially serious
issue. The Board's handling of this matter is even more troubling in light of
the recent resignations of Messrs. Rivette and Goodrich, who cited
disagreements with Board leadership, oversight, and strategy in their
resignation letter. We are not at all surprised that the new, smaller Board
is "unanimous" in their support of Dr. Young.

The Company's "Open Letter to Starboard Value" then goes on to state that
Starboard omitted the demands we made in our private letter from our public
letter, implying that this was somehow unethical. To the contrary, we
intentionally omitted the information in an attempt to keep the public debate
to business issues, while privately initiating a dialogue with the Board
regarding a potential settlement. Typically those discussions would remain
private. Again, the Board chose to publicly disclose this information, not
us. Now that our proposal is public, however, it deserves a bit more
explanation.

As we have consistently stated, given the Company's dismal financial and stock
price performance, failed execution, poor governance, and troubling recent
director resignations, we believe a change in a majority of the Board is
required. Several weeks ago, we may have been able to be convinced that a
solution to the Company's current issues could be achieved by changing less
than a majority of the Board. However, following the resignations of Messrs.
Rivette and Goodrich, two directors who we believe are reasonable,
open-minded, and pressing for positive change at Tessera, it became clear to
us that a change of a minority of the Board would no longer be enough to
ensure that the best interests of all shareholders are being represented in
the boardroom. Although our proposed solution, which was presented to the
Company when the size of the Board was still set at eight total directors,
would result in a change in a majority of the Board, it is important to point
out the following:

  i)Our proposal only requires two additional incumbent directors to resign,
  one of which would be the current Chairman, while four of the incumbent
  directors would remain for continuity;

  ii)We only proposed for one Starboard direct representative to join the
  Board, while the other four new directors would be truly independent
  directors with highly relevant and successful industry credentials;

  iii) The new Chairman and new CEO would be identified and selected by the
  pro forma Board; and

  iv)Although several of the independent nominees we have proposed are highly
  qualified and willing to serve as interim CEO, we believe following the
  re-composition of the Board, it would be most appropriate to conduct a full
  CEO search process in which the Board would consider both internal and
  external candidates.

As for Tessera's settlement proposal of "adding two candidates from
Starboard's slate that meet the Company's criteria, including independence and
business acumen", this is news to us. All that was previously communicated to
us was the Company's willingness to interview four of our independent
nominees. In response, we stated that we would be happy for the Board to
interview our nominees prior to their appointment if and when we had reached a
tentative agreement on mutually agreeable terms to resolve the pending
election contest. We believe allowing the Company to interview these
candidates now would be premature because it does not appear that the Company
is prepared to consider proposals that will result in substantial change to
the Board, a key component for us of any potentially acceptable settlement
scenario. This was made especially clear in light of statements made during
our meeting that under no circumstance whatsoever would the Company consider
allowing any Starboard direct representative to join the Board.

In the letter, the Board then alleges that "the appointment of Starboard
executives to our Board would present a conflict of interest." We believe
this allegation is without merit. The Board, itself, appears to acknowledge
that there is no current conflict, stating that Unwired Planet, which I
currently chair, "may compete with the Company's strategic plans for its
Intellectual Property business." It appears then that even Tessera believes
there is no conflict today, and any potential conflict of interest is purely
speculative.

On February 19, 2013, we published a 10-page letter outlining our views, which
included four specific initiatives we believe will create significant value at
Tessera. Further, in our public letter on March 1, 2013, we committed to
disclosing additional information on our plans for the Company, each of its
businesses, and our strategy to unlock substantial value for the benefit of
all shareholders. In response to our letter, all the Company has done is make
broad statements about its status quo plan and make claims that the current
strategy is working. Yet the reality is that the so-called "significant cost
reduction initiatives" the Company has announced are only marginal and nowhere
near acceptable. The Company's commentary that the "DigitalOptics business
continues to have a unique opportunity" makes no mention of years of failed
investment and missed expectations. Lastly, the Board states that the
Company's "Intellectual Property business continues to perform well", yet
revenue decreased 28.5% while operating expenses increased 69.1% from 2009 to
2012, resulting in a staggering decline in segment operating income of
approximately $116.6 million over this same time period.

If the Company's status quo strategy were working, then ask yourself the
following: Why has the Company's stock price terribly underperformed over
almost any time period? Why has the Company's financial performance
deteriorated drastically? Why have the heads of both of Tessera's business
units resigned within months of one another? And, finally, why have two
highly-qualified and well respected directors abruptly resigned alleging
serious issues at the Company? We cannot believe that these are signs of a
healthy and prospering Company. Instead, these are symptoms of a
dysfunctional Board and demonstrate the need for significant change in the
Company's leadership, direction, and oversight.

At this juncture, it has become clear to us that management and the Board of
Tessera are not yet willing to embrace a level of change necessary to unlock
value for its shareholders. This has further solidified our belief that a
majority of the current Board must be reconstituted. It is time to move
forward and for the Board to allow you, our fellow shareholders, to make the
ultimate determination as to whom you believe will most effectively represent
your interests on the Board. Unfortunately, for two years now the Company has
manipulated annual meeting dates and nomination deadlines to prevent
shareholders, and Starboard specifically, from making changes to the Board
that we believe would benefit all shareholders. We note that the Company
previously announced its intention to hold the 2013 Annual Meeting on May 23,
2013 in its fourth quarter results press release. However, our proxy
solicitors have informed us that, to their knowledge, the annual meeting date
has not been formally set by the Company. We hope and expect the Company will
follow through on its commitment and immediately formalize and publicly
announce a May 23, 2013 date, at the latest, for holding the Company's 2013
Annual Meeting date so that shareholders can exercise their right to vote,
without delay, on a slate of directors who they believe are best fit to serve
as stewards of shareholder value.

Best Regards,

Peter A. Feld
Managing Member
Starboard Value

About Starboard Value LP

Starboard Value LP is a New York-based investment adviser with a focused and
differentiated fundamental approach to investing in publicly traded U.S. small
cap companies. Starboard invests in deeply undervalued small cap companies and
actively engages with management teams and boards of directors to identify and
execute on opportunities to unlock value for the benefit of all shareholders.

Investor contacts:
Peter Feld, (212) 201-4878
Gavin Molinelli, (212) 201-4828
www.starboardvalue.com

CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Starboard Value LP, together with the other participants named herein, intends
to file a preliminary proxy statement and accompanying proxy card with the
Securities and Exchange Commission ("SEC") to be used to solicit votes for the
election of its slate of director nominees at the 2013 annual meeting of
stockholders of Tessera Technologies, Inc., a Delaware corporation.

STARBOARD STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY
STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY
STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES
SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.

The participants in the proxy solicitation are Starboard Value and Opportunity
Master Fund Ltd ("Starboard V&O Fund"), Starboard Value and Opportunity S LLC
("Starboard LLC"), Starboard Value LP, Starboard Value GP LLC ("Starboard
Value GP"), Starboard Principal Co LP ("Principal Co"), Starboard Principal Co
GP LLC ("Principal GP"), Jeffrey C. Smith, Mark R. Mitchell, Peter A. Feld,
Tudor Brown, George Cwynar, Thomas Lacey, George Riedel and Donald Stout
(collectively, the "Participants").

As of the date of this filing, Starboard V&O Fund owned directly 2,383,225
shares of common stock, $0.001 par value (the "Common Stock"), of the Company.
As of the date of this filing, Starboard LLC owned directly 529,841 shares of
Common Stock. Starboard Value LP, as the investment manager of Starboard V&O
Fund and of a certain managed account (the "Starboard Value LP Account"), and
the Manager of Starboard LLC, may be deemed the beneficial owner of an
aggregate of 3,875,000 shares of Common Stock held directly by Starboard V&O
Fund and Starboard LLC and including 830,859 shares of Common Stock held in
the Starboard Value LP Account. Each of Starboard Value GP, as the general
partner of Starboard Value LP, Principal Co, as a member of Starboard Value
GP, Principal GP, as the general partner of Principal Co and each of Messrs.
Smith, Mitchell and Feld, as a member of Principal GP and as a member of each
of the Management Committee of Starboard Value GP and the Management Committee
of Principal GP, may be deemed the beneficial owner of the 3,875,000 shares of
Common Stock held directly by Starboard V&O Fund and Starboard LLC and held in
the Starboard Value LP Account. As of the date of this filing, Mr. Brown
directly owned 600 shares of Common Stock, Mr. Cwynar directly owned 580
shares of Common Stock, Mr. Lacey directly owned 500 shares of Common Stock,
Mr. Riedel directly owned 400 shares of Common Stock and Mr. Stout directly
owned 581 shares of Common Stock.

SOURCE Starboard Value LP

Website: http://www.starboardvalue.com
 
Press spacebar to pause and continue. Press esc to stop.