Starboard Delivers Open Letter To Shareholders Of Tessera Technologies

    Starboard Delivers Open Letter To Shareholders Of Tessera Technologies

Comments on Tessera's Recent Announcements Regarding Changes in Management and
the Board and Restructuring Initiatives

Believes that Announced Measures are Reactionary and are Not a Holistic
Solution to Tessera's Problems

Questions the Board's Sudden Reversal of its Strong Support for
Soon-to-be-Replaced CEO Robert Young and Former Chairman Boehlke

Cites Concerns Regarding Qualifications and Allegiances of the Three
Newly-Appointed Directors, Two of Whom Have Direct Ties to Chairman Richard

Announces Intent to File Revised Proxy Materials to Elect Full Slate of Six
Highly Qualified Director Candidates at Upcoming 2013 Annual Meeting

PR Newswire

NEW YORK, April 1, 2013

NEW YORK, April 1, 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 7.6% of the outstanding common stock of the Company, announced
today that it has delivered an open letter to the shareholders of Tessera, the
full text of which is included below:

April 1, 2013

Open Letter to Shareholders of Tessera Technologies, Inc.

Dear Fellow Shareholders:

Starboard Value LP, together with its affiliates ("Starboard"), currently owns
approximately 7.6% of the outstanding common shares of Tessera Technologies,
Inc. ("Tessera" or the "Company"), making us one of the Company's largest
shareholders. Our interests are directly aligned with yours, and we continue
to believe that there is significant value to be realized at Tessera. We
appreciate the strong words of support we have received from many of you in
response to our involvement and the recent positive changes we have helped to
effect at Tessera. There is still a great deal to be accomplished and we will
continue to press for actions and changes that we believe are in the best
interests of all shareholders.

Since the filing of our original preliminary proxy materials on March 15,
2013, the Company has announced the following significant corporate

1.Restructuring initiatives that include exiting the camera module and lens
    manufacturing operations of the Company's DigitalOptics Corporation
    business segment ("DOC") and general and administrative cost reductions;
2.Changes in management and on the Board, including a search for a new chief
    executive officer to replace Robert Young, the naming of Richard Hill as
    the Company's new Chairman of the Board to replace Robert Boehlke, the
    Board's decision not to re-nominate Mr. Boehlke, Dr. Young, and Anthony
    Tether for election to the Board at the 2013 Annual Meeting (the "Annual
    Meeting"), and the addition of three newly-appointed, independent
    directors to the Board.

We believe these changes are entirely reactionary to our involvement and are
being undertaken merely to attempt to appease shareholders in the midst of
this election contest. The speed of the Company's about-face is nothing short
of astonishing. It was less than one month ago that the Board issued a letter
expressing unequivocal and unanimous support for Dr. Young, and touting the
Company's "significant and strong actions to increase long-term stockholder
value." The announced restructuring actions and pending departures of Mr.
Boehlke and Dr. Young are positive events, but do not constitute a holistic
solution to Tessera's overarching problems.

Our objectives in this election contest have not changed and are very simple.
We want to set Tessera on a new path towards long-term shareholder value
creation. In order to do this, we want to compose a new board made up of the
absolute best director candidates with appropriate and relevant skill sets who
all have a mutual objective of creating tremendous value for the benefit of
all Tessera shareholders. During this contest, the Company is going to try to
tell you that we are seeking to take control of Tessera. We do not believe
this contest is about "majority" or "control", it is about which group of
director nominees is more qualified to oversee and govern Tessera.
Shareholders require real and sweeping change on the Board, not just the
appearance of change.

The proposed restructuring actions at DOC and the general and administrative
cost reductions, although a step in the right direction, are too little and
much too late. For over a year now, Starboard has been arguing for the need
for changes in the Company's strategy with respect to DOC to better balance
investment spending with opportunity. Additionally, we have continually
pressed for substantial cost reductions throughout the entire Company. For
most of that time frame, our requests were ignored. It is only in the face of
an imminent election contest that the Company has finally acknowledged the
issues at DOC and has begun to take action. We believe that these actions,
however, will still result in significant continued losses for DOC of greater
than $50 million in 2013, prior to any cash restructuring costs, and the
Company has revised its commitment to shipping only "small quantities" of MEMS
camera modules in 2013 versus past promises of substantial revenue and
profitability in this business by the end of this year. Further, we believe
there are additional cost savings opportunities throughout the Company that
are well in excess of the recently announced actions. The DOC business has
been an unmitigated disaster and expenses at Tessera remain terribly bloated.
We believe a solution to these issues requires an objective and unbiased
review by new, truly independent directors with relevant experience in this
industry to determine the most appropriate way to move forward and realize
maximum value from these businesses.

We also have serious questions regarding the sudden flip-flop in the Board's
support for Mr. Boehlke and Dr. Young. Recall that only a short time ago, two
former Tessera directors, Kevin Rivette and John Goodrich, wrote a letter to
the Board expressing their discontent with the Board's leadership and making
serious and troubling claims about the manner in which Mr. Boehlke governed
the Company as Chairman. In this letter, Messrs. Rivette and Goodrich stated
their intent to resign from the Board unless Mr. Boehlke stepped down. In
what appeared to be a strong show of support for Mr. Boehlke by the other
directors, the Board simply accepted the resignations of Messrs. Rivette and
Goodrich without announcing an investigation of their claims or any corporate
governance changes. Similarly, less than one-month ago, after the Company
publicized Starboard's delivery of a private letter to the Board that
included, among other things, questions regarding possible improper conduct by
Dr. Young, the Board issued a letter in which it stated, "the Board
unanimously stands behind our CEO Dr. Young." This appeared to be a strong
show of support for Dr. Young by the Board, which we felt was surprising and
irresponsible due to the Board's apparent refusal to investigate the concerns
raised in our letter.

Yet, here we are just a short time after these incidents and the Board has
stripped Mr. Boehlke of his position as Chairman, announced an immediate
search to replace Dr. Young as CEO, and has decided not to re-nominate either
of them or current director Tether for re-election to the Board, with little,
if any, explanation as to why the Board has suddenly changed its course. Did
the Board conduct an investigation of either or both of Mr. Boehlke and Dr.
Young and find some form of malfeasance or wrongdoing? Or were the Board's
actions merely taken in response to the pressure of the impending election
contest in an attempt to gain support from shareholders?

Regardless of the motivation for these actions, it appears the Company now
recognizes the severe need for significant change in management and the Board
in order to address years of terrible performance. In the Company's March 25,
2013 press release, in addition to the removal of Chairman Boehlke and CEO
Young, Tessera announced the naming of current board member Richard Hill as
its new Chairman and appointment of three new independent directors to the
Board - John Chenault, John H. F. Miner, and Christopher A. Seams.

It seems we are all now in agreement that we need a new board of directors.
Now the question is how do we select the best possible board to oversee and
govern Tessera in the best interests of all shareholders?

As we assembled a slate of directors for election at the upcoming Annual
Meeting, we asked ourselves what critical skills are sorely lacking on the
Board. We determined that the Company needs directors with directly relevant
experience and knowledge of the Company's intellectual property licensing
business and imaging technology components business. We therefore conducted a
thorough process to identify a group of individuals who could address these
needs. We leveraged our internal network of relationships and retained a
tier-one executive search firm to assist us in a two-month process to
interview, examine, and qualify candidates with the requisite skill sets. We
believe we have identified a world-class group of individuals with the direct
experience necessary to lead Tessera towards enhanced shareholder value. Our
non-Starboard nominees include:

  Tudor Brown was one of the founding members and until May 2012, President
  and Board Member of ARM Holdings plc, a publicly-traded, semiconductor IP
  and software design company based in Cambridge, UK, where he served in
  various positions over a career of more than twenty years. ARM Holdings plc
  currently has a market value of nearly $20 billion and is one of the most
  successful semiconductor IP licensing companies in the world.

  George Cwynar is the former President, Chief Executive Officer, and Board
  Member of MOSAID Technologies Incorporated, a Canadian-based leading
  designer and licensor of memory technology, and supplier of memory test
  systems to major semiconductor companies worldwide. During his tenure at
  MOSAID, Mr. Cwynar managed the delicate balance between intellectual
  property licensing and product sales. He is uniquely positioned to
  understand the complications Tessera faces by participating in both the
  semiconductor IP licensing business and technology components business.

  Thomas Lacey previously served as the President of Flextronics
  International's Components Division, now Vista Point Technologies, from
  which Tessera acquired camera module manufacturing assets integral to its
  DOC business segment. Mr. Lacey has a broad knowledge of the technology
  components business and has specific knowledge of elements of Tessera's DOC
  business. Earlier in his career, Mr. Lacey held various management and
  executive positions at Intel Corporation for 13 years, including Vice
  President Sales and Marketing, President of Intel Americas, and Vice
  President and General Manager, Flash Products.

  George A. Riedel previously served in various positions with Nortel Networks
  Corporation, where he led the sale/restructuring of various carrier and
  enterprise business units, and later on, led the effort to monetize the
  company's remaining 6,500 patents and patent applications, culminating in
  the sale of its patent portfolio for $4.5 billion to a consortium which
  included several of the leading technology companies in the world. This is
  one of the largest single transactions for intellectual property ever

  Donald E. Stout is a senior partner at the law firm of Antonelli, Terry,
  Stout & Kraus, LLP, where his legal practice has involved all facets of
  intellectual property licensing, litigation, and general patent work. Mr.
  Stout co-founded NTP Inc., a very successful patent holding company for
  which he prepared the original patents and managed its patent litigation
  strategy, and currently serves as its Chief Strategist.

In addition to these five candidates, we intend to proceed with my nomination,
as a direct representative of one of Tessera's largest shareholders. We feel
this slate of six directors, comprised of five extremely well qualified and
truly independent nominees and a direct representative of one of the Company's
largest shareholders will best serve the Company and its shareholders going

In stark contrast to our highly qualified and diverse slate, we believe that
the Company, in an attempt to appease shareholders during this election
contest, hastily assembled a new Board made up of a combination of incumbent
directors and new directors, many of whom have overlapping experiences and
questionable allegiances. The Company's slate appears to have expertise in
the semiconductor industry with little to no directly relevant experience in
intellectual property licensing or the imaging technology components
business. It appears to us that none of the directors on the Company's slate
has run an intellectual property licensing business, none is a patent
attorney, and none has direct experience in businesses relevant to DOC.
Tessera is primarily an intellectual property licensing company that focuses
on the semiconductor industry, not a semiconductor product company. We
believe that this is an inherently different business than the semiconductor
product businesses in which many of the Company's nominees have been

Further, at least two of the new directors have direct ties to the Company's
newly appointed Chairman, Richard Hill. Mr. Chenault served in several roles
at Novellus since 1991, most recently as interim CFO for a four-month period
until his retirement in 2005, where he worked for Mr. Hill, who was CEO of
Novellus during that time frame. Mr. Miner currently serves on the board of
directors of LSI Corporation alongside Mr. Hill. We note that Tessera's
preliminary proxy materials state that the Company engaged an executive search
firm to "assist in identifying and evaluating Messrs. Chenault, Miner and
Seams as potential nominees." We seriously question whether a comprehensive
and objective search for independent candidates with appropriate skill sets
for Tessera would have resulted in the selection of these three individuals
considering their experience and the fact that two of the three new directors
have direct ties to the newly appointed Chairman. Were these candidates
selectedbecause they are well suited to oversee and govern Tessera or because
of their relationship with Chairman Hill? It is this type of consolidation of
power under the Chairman that became problematic under the leadership of
former Chairman Boehlke.

In light of the recent changes at Tessera, it appears both the Company and
Starboard now agree that a new Board is required at Tessera. We merely
disagree on the constitution of the Board. As we approach the Annual Meeting,
we ask each of you to review the qualifications of the two respective slates
and determine for yourself who you believe is most qualified to represent your
interests on the Board of Tessera. Again, this is not a contest about
"majority" or "control", it is a simple question of which group of individuals
is more qualified to oversee and govern Tessera. As one of Tessera's largest
shareholders, we believe the choice is clear.

Although we have proposed and intend to move forward with a full slate of six
nominees for election at the Annual Meeting, if elected, our nominees have
expressed their willingness to expand the Board from six directors to nine
directors to allow Tessera's new CEO to serve on the Board and for two
incumbent directors to be added back. We believe that this result would allow
Tessera to move forward under the leadership of a strong and well-qualified
Board while ensuring continuity at the Company.

We hope you recognize that our intentions are sincere and our incentives are
directly aligned with yours – we only want what is best for Tessera's
shareholders. We look forward to communicating with you more over the coming
weeks and months and sharing our detailed plans to create maximum value for
all shareholders of Tessera.

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


Starboard Value LP, together with the other participants named herein, has
filed a preliminary proxy statement and accompanying WHITE 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.


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 and Opportunity C LP ("Starboard C LP"),
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

As of the date of this filing, Starboard V&O Fund owned directly 2,455,350
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 545,841 shares of
Common Stock. As of the date of this filing, Starboard C LP owned directly
141,200 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 and Starboard C LP, may be
deemed the beneficial owner of an aggregate of 4,000,000 shares of Common
Stock held directly by Starboard V&O Fund, Starboard LLC and Starboard C LP
and including 857,609 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 4,000,000 shares of Common Stock
held directly by Starboard V&O Fund, Starboard LLC and Starboard C LP 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 1,400 shares of Common Stock and Mr. Stout directly
owned 581 shares of Common Stock.

As members of a "group" for the purposes of Rule 13d-5(b)(1) of the Securities
Exchange Act of 1934, as amended, each of the Participants in this proxy
solicitation is deemed to beneficially own the shares of Common Stock of the
Company beneficially owned in the aggregate by the other Participants. Each
of the Participants in this proxy solicitation disclaims beneficial ownership
of such shares of Common Stock except to the extent of his or its pecuniary
interest therein.

SOURCE Starboard Value LP

Press spacebar to pause and continue. Press esc to stop.