Starboard Files Detailed Investor Presentation On Tessera And Delivers Letter To Shareholders

Starboard Files Detailed Investor Presentation On Tessera And Delivers Letter
                               To Shareholders

Urges Shareholders to Ignore the Company's Rhetoric and Vote the WHITE Proxy
Card Today to Support the Best and Most Qualified Slate of Directors to Lead
Tessera on the Right Path Forward

PR Newswire

NEW YORK, April 30, 2013

NEW YORK, April 30, 2013 /PRNewswire/ --Starboard Value LP (together with its
affiliates, "Starboard"), one of the largest shareholders of Tessera
Technologies, Inc. (NASDAQ: TSRA) ("Tessera" or the "Company") with
approximately 7.7% of the outstanding common stock of the Company, announced
today that it has filed an extensive Investor Presentation with the Securities
and Exchange Commission ("SEC") in connection with the Company's 2013 Annual
Meeting scheduled to be held on May 23, 2013. In the Investor Presentation,
Starboard sets forth in detail its views regarding why significant change is
necessary at Tessera, how Starboard's slate of nominees is far more qualified
to govern and oversee Tessera than the Company's proposed slate of nominees,
and how Starboard's nominees have a superior plan for restoring and enhancing
shareholder value at Tessera.

The Investor Presentation is available at the SEC's website and at the
following link: http://tinyurl.com/StarboardTSRAPresentation

Additionally, Starboard announced today it has delivered a letter to Tessera
shareholders urging its fellow shareholders to help put Tessera back on track
for long-term value creation by voting the WHITE proxy card to elect
Starboard's six highly qualified nominees, Tudor Brown, George Cwynar, Peter
A. Feld, Tom Lacey, George Riedel and Don Stout, at the upcoming Annual
Meeting. Starboard appreciates the ongoing dialogue it has had with fellow
Tessera shareholders and is encouraged by the great deal of support it has
received thus far in the election contest. Starboard is confident that its
fellow shareholders will see through the Company's rhetoric and instead focus
on the real and critical operational issues and opportunities facing the
Company.

The full text of the letter follows:

April 30, 2013

Dear Fellow Tessera Technologies Shareholders:

Support a New Board and a New Plan for Tessera

Ignore the Company's Rhetoric and Focus on the Facts

Vote the WHITE Proxy Card Today

Starboard Value LP, together with its affiliates ("Starboard"), currently owns
approximately 7.7% of the outstanding common shares of Tessera Technologies,
Inc. ("Tessera" or the "Company"), making us one of the Company's largest
shareholders. As you know, the Company's 2013 Annual Meeting (the "Annual
Meeting") is quickly approaching and shareholders must make a crucial decision
to determine the future composition of the Company's board of directors (the
"Board"). We appreciate the ongoing dialogue we have had with our fellow
Tessera shareholders and are encouraged by the great deal of support we have
received thus far. We believe that our involvement has already made a very
positive difference at Tessera, but our job is not yet done.

We are seeking your support because we believe that our nominees are far more
qualified than the Company's proposed slate of nominees to lead Tessera on the
right path forward and have a better strategic plan to enhance shareholder
value at the Company. Throughout this campaign we have kept our
communications with you focused on the facts, the Company's business, and our
plans to best position Tessera for the future so that you can objectively
choose the better slate of director nominees. Unlike the current management
team and Board, we have no interest in engaging in personal attacks to gain
votes in this election contest. We are confident that our fellow shareholders
will see through the Company's rhetoric and instead focus on the real and
critical operational issues and opportunities facing the Company.

Prior to our public involvement a few short months ago, Tessera was on a
troubled path towards continued shareholder value destruction following years
of terrible performance. With the best interests of all shareholders in mind,
we spoke out publicly against the Company's dismal operating performance and
failed leadership. Our concerns were further elevated following the serious
and troubling claims from two directors who decided to resign due to
disagreements with the Company's former Chairman over serious issues involving
the failure of the Company's Board leadership and the resulting negative
impact on shareholder value. The very incumbent directors who first stood
firmly behind that former Chairman and the disturbing status quo now have
resorted to using slander and personal attacks against us to scare you into
supporting the Company's slate and to distract your attention from the
significant role we have played in catalyzing much-needed change at Tessera.

Due to events that have occurred following our public engagement with Tessera,
change on the Board is an absolute certainty following the Annual Meeting
given that the Board will be almost entirely made up of either new directors
or directors who have served for less than one year. In light of this certain
and extensive change in the Board's composition, the Annual Meeting represents
a unique opportunity for shareholders to select the best possible Board to
oversee Tessera based purely on qualifications, not on incumbency. As
shareholders, we cannot let this important opportunity slip away to put
Tessera back on track for long-term value creation. It is time to make a
clean break with Tessera's past failures and reject the Company's
unprofessional and unethical scare tactics by voting your shares on the WHITE
proxy card so we can reconstitute the Board, install a new strategic plan and
turn Tessera around.

Our Nominees Have a Better Strategic Plan to Enhance Shareholder Value at
Tessera

Our director nominees have been working diligently in conjunction with
Starboard and our advisors to create a new strategic plan for Tessera that we
strongly believe will result in dramatically improved financial results. The
essential principles of this plan involve:

  oRefocusing Tessera on becoming a successful technology licensing company
    with a disciplined approach to spending and capital allocation.
  oRealizing the full licensing value of Tessera's current patent assets
    across multiple industries through expanded licensing and assertion
    efforts.
  oEvaluating partnerships for DigitalOptics Corporation ("DOC") that would
    allow Tessera to exit the design, manufacturing, and sales
    responsibilities for these products while retaining upside through equity
    ownership or per unit royalties.
  oRetaining DOC's intellectual property and beginning a licensing effort to
    realize revenues from this valuable portfolio.
  oExploring industry partnerships and small tuck-in acquisitions to expand
    on Tessera's core intellectual property assets in order to grow revenue
    and extend the life of the portfolio.
  oSignificantly reducing costs across all functional areas of Tessera
    including the Company's Intellectual Property business ("IP Business"),
    DOC, and corporate overhead.
  oDelivering improved revenue growth and achieving best-in-class EBITDA
    margins of up to 60% to 70% in the medium to long-term.
  oReturning excess capital to shareholders through increased quarterly
    dividends, special dividends, and share buyback programs.

The Company's Plan Sounds Eerily Similar to Failed Plans of Past Management

The Company revealed its so-called "new strategic plan" in an investor
presentation last week. Rather than presenting a detailed plan with near-term
targets and commitments so shareholders can hold management accountable, the
Company chose to present only high-level information and make commitments
about financial performance more than three years from now. The Company's
business plan includes:

  oContinued heavy investment in DOC – We estimate that management's plan
    would cause the Company to burn an additional $95 million in cash in 2013
    alone. The Company's "path forward" for DOC as stated in its investor
    presentation includes a "Break-even target mid-2015, ~$100m of incremental
    investment". Given our estimate of a $95 million cash burn for DOC in
    2013 alone, we believe that the Company's claim of $100 million of
    incremental investment through a break-even target of mid-2015
    significantly underestimates the incremental investment for DOC in that
    time period.
  oContinued heavy investment in research and development – The Company
    claims, "our innovations drive the sustainability and growth of our IP
    revenue stream". Is that why revenue in the IP Business has fallen by
    28.5% over the past three years despite massive increases in spending?
    Our research shows that Tessera's truly valuable patents were either
    acquired or issued prior to 1997. For just one confirmatory data point,
    we do not believe that Tessera has asserted a single patent that was
    internally-developed within the past 12 years in any of the current legal
    actions to which it is a party.
  oContinued heavy spending on SG&A and corporate overhead – Management
    recently stated, "The Company's restructuring will reduce spending in DOC
    and Corporate Overhead, but not in the Company's Intellectual Property
    business." The reality is that management plans to spend well in excess
    of $30 million in corporate overhead in 2013 and has no intention of
    significantly reducing expenses in the IP Business, which has experienced
    substantially deteriorating financial performance and profit margins over
    the past few years.
  oNo near or medium-term financial performance commitments – The Company's
    investor presentation does not include margin commitments for 2013, 2014,
    or even 2015. Instead, management provides guidance for 2016, more than
    three years from now.

We find the substance of the Company's plan eerily similar to the failed
business plans pursued by prior management. For years now, management has
been making the same promises: a spinout or separation of DOC, reduced
expenses, revenue growth, and improved financial performance. Management has
not made good on a single one of these commitments and now the Company is
asking for your support to implement a modestly revised plan without providing
the type of detail necessary to hold management accountable within a
reasonable time frame. Why should we trust them this time? Do you think that
the Company would even be making these commitments had Starboard not taken
action to push for value-creating changes? A vote for our nominees is a vote
for a better plan to put Tessera back on track for long-term value creation.

Our Nominees are Far More Qualified to Lead Tessera on the Right Path Forward

Our nominees have specific expertise in areas pertinent to Tessera, track
records of prior successful performance, and true independence from current
and former members of Tessera's management and Board. These individuals have
the necessary skill sets to successfully oversee the execution of an
aggressive plan to return Tessera to prominence. Our nominees were identified
through a thorough two-month long search process. The result is a
well-balanced mix of candidates with deep expertise in Tessera's key markets,
a broad understanding of the intellectual property licensing and technology
components businesses, and the independence necessary to hold management
accountable for its performance. Further, of the five non-Starboard nominees,
only one of them had any prior relationship with Starboard prior to our search
for Tessera board nominees. Our highly-qualified, 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 is
uniquely qualified due to his 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 completed.

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.

Based on the Company's recent investor presentation, the Board apparently
believes that it needs to misrepresent the qualifications of its nominees and
engage in scare tactics to sway shareholders to support its slate. Included
in the list of attributes the Company uses to evaluate director nominees are
items such as "technology innovation", "location" and "appointed within last 8
months". The Company conveniently hides the nominees' lack of specific
expertise in intellectual property licensing or imaging technology components
within the undefined category of "technology innovation". Living within a
two-hour flight of the Company's headquarters and having been appointed in the
last eight months do not make up for this lack of directly relevant businesses
experience. The truth is that given the opportunity to hand-pick three new
directors, the Board appears to have chosen individuals close to Interim CEO
and Executive Chairman Hill instead of individuals with the necessary
experience to turn the Company around.

It is incumbent upon the Company's shareholders to simply evaluate the
opposing slates based on each nominee's credentials, qualifications, and track
records to determine which slate is most qualified to represent your interests
on the Board. We have worked hard to assemble a truly qualified and
outstanding slate of director candidates to represent the best interests of
all of the shareholders. Starboard, of which I am one of the founding
members, has a long track record of representing shareholder interests and
creating value for the shareholders of our portfolio companies. We are
working hard to create as much value as possible at Tessera for the benefit of
all of us.

We Encourage You to Review our Investor Presentation

We filed an extensive Investor Presentation with the SEC earlier today laying
out in detail our views regarding why significant change is necessary at
Tessera, why our slate of nominees is far more qualified to govern and oversee
Tessera than the current Board, and why our nominees have a superior plan for
restoring and enhancing shareholder value. We encourage you to review this
presentation, which can be found at the link below:

http://tinyurl.com/StarboardTSRAPresentation

We look forward to discussing this presentation with all shareholders and urge
each of you to reach out with any questions.

Our interests are directly aligned with yours and we continue to believe that
there is significant value to be realized at Tessera. We greatly appreciate
the support we have received so far and we urge all shareholders to support
our nominees at the Annual Meeting so together we can put Tessera back on
track for long-term value creation.

VOTE FOR A NEW PLAN AND A NEW BOARD AT TESSERA

PLEASE SIGN, DATE, AND MAIL THE ENCLOSED WHITE PROXY CARD TODAY

We look forward to your support at the Annual Meeting.

Best Regards,

Peter A. Feld
Managing Member
Starboard Value

If you have any questions, or require assistance with your vote, please
contact Okapi Partners LLC toll- free at (877) 869-0171 or email:
info@okapipartners.com.

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

If you have any questions, require assistance with submitting yourWHITE proxy
card or need additional copies of the proxy materials, please contact:

Okapi Partners
Bruce H. Goldfarb/Patrick McHugh
(212) 297-0720

SOURCE Starboard Value LP

Website: http://www.starboardvalue.com
 
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