PLX Technology Commences Mailing of Definitive Proxy Materials, Letter to Stockholders

PLX Technology Commences Mailing of Definitive Proxy Materials, Letter to 
Stockholders 
Recommends Stockholders Vote White Proxy Card to Support PLX Board of
Directors' Full Slate of Highly Qualified, Experienced Nominees --
Urges Stockholders to Reject Potomac Capital's Attempt to Pursue
Self-Interested Agenda 
SUNNYVALE, CA -- (Marketwired) -- 11/13/13 --  PLX Technology, Inc.
(NASDAQ: PLXT), the global leader in PCI Express(R) (PCIe(R)) silicon
and software connectivity solutions enabling emerging data center
architectures, today announced that it has commenced the mailing of
definitive proxy materials to PLX Technology stockholders in
connection with the Company's 2013 Annual Meeting of Stockholders on
December 18, 2013.  
The PLX Board of Directors unanimously recommend that stockholders
protect the value of their investment in PLX Technology by voting on
the WHITE proxy card "FOR ALL" the following very experienced and
highly qualified director nominees: D. James Guzy, John H. Hart,
David Raun, Thomas Riordan, Michael J. Salameh, Ralph Schmitt, Robert
H. Smith and Patrick Verderico.  
Included in the proxy materials is a letter to all stockholders. The
full text of the letter from D. James Guzy, Independent Chairman of
the PLX Technology Board of Directors, and David Raun, President,
Chief Executive Officer and Director, is below:  
VOTE "FOR" ALL OF THE PLX TECHNOLOGY NOMINEES TO THE BOARD ON THE
WHITE PROXY CARD TODAY 
November 13, 2013 
Dear Stockholder: 
We are writing to you today regarding PLX Technology's upcoming
Annual Meeting of Stockholders, which will be held on December 18,
2013. At this meeting, you will be asked to make an important
decision regarding the composition of the Board of Directors and, by
extension, the future of PLX Technology. As you may be aware, Potomac
Capital Partners II, L.P. ("Potomac Capital"), which has been a PLX
Technology stockholder for roughly one year, is seeking to replace
three members of your Board of Directors with three of their own
nominees. We question whether their nominees, if elected, would place
Potomac Capital's interests ahead of the interests of all PLX
Technology stockholders.  
We are always open to listening to the views of our stockholders and
engaging in a meaningful, constructive dialogue. Over the last
several months, we have met with Potomac Capital numerous times to
discuss their suggestions as described in the proxy. Despite our best
efforts, including our offer to replace two of our existing Board
members with two of their nominees, Potomac Capital has been
unwilling to agree to a reasonable settlement and now insists on
running a costly proxy contest at the expense of all PLX Technology
stockholders.  
Potomac Capital has consistently expressed its desire to have the
Company sold immediately. Recent history shows that we are not at all
opposed to a sale of the Company -- in April 2012, your Board
approved a definitive agreement for the combination of PLX Technology
with Integrated Device Technology, Inc. ("IDTI"). Unfortunately for
all of us, this transaction was ultimately blocked by the Federal
Trade Commission. Contrary to statements by Potomac Capital, your
Board and management team have been and remain committed to exploring
ways to maximize value for all PLX Technology stockholders, including
through a sale of the Company.  
Mindful of the need to continue to enhance stockholder value, the
Board and management team has executed multiple steps over the last
year to produce the most profitable first nine months of any year in
the Company's history. We believe it is in stockholders' best
interest to maintain the current Board that is familiar with the
Company's markets, products, employees, customers and strategy so we
can continue to execute without disruption. This is a critical point
in the execution of the Company's strategy and potential instability
at any level would be counterproductive.  
This is not the time to make changes at the board level or to the
strategic direction of the Company -- we are executing well, and we
are confident we will achieve our milestones in a reasonable
timeframe. To introduce a contingent on the Board whose primary focus
appears to be to sell the Company, demonstrating a lack of
understanding of the strategy being effectively implemented to
generate shareholder value, would be, in our belief, a mistake.  
We believe your existing Board is better experienced and equipped to
maximize stockholder value than any of the Potomac Capital nominees.
Therefore, to protect the value of your investment in PLX Technology,
your Board unanimously recommends that stockholders vote on the
enclosed WHITE proxy card "FOR" all of your Board's director nominees
-- D. James Guzy, John H. Hart, David Raun, Thomas Riordan, Michael
J. Salameh, Ralph Schmitt, Robert H. Smith and Patrick Verderico --
at the 2013 Annual Meeting of Stockholders. We urge you to discard
any materials and gold cards you receive from Potomac Capital.  
Your vote is very important. We encourage you to make your voice
heard by voting online, by telephone, or by signing and dating the
enclosed WHITE proxy card and returning it in the postage-paid
envelope provided.  
YOUR BOARD IS EXECUTING ON A STRATEGIC PLAN THAT IS DELIVERING VALUE
FOR ALL STOCKHOLDERS 
PLX Technology has distinguished itself as a market leader, with a 70
percent share and growing. The management team and Board of PLX
Technology anticipated and drove the market for PCI Express ("PCIe")
switches over a period of many years through careful consideration of
industry trends, long term planning and investment, and superior
execution. We were first to market with innovative products in the
PCIe switching market, and we have continually outperformed numerous
competitors to emerge as the clear leader.  
In the face of recent challenges, including the economic recession
and the temporary disruption of the terminated combination with IDTI,
your Board and management team have delivered three consecutive
profitable quarters in 2013 and the highest year-to-date profits in
the Company's 27-year history. This has been achieved by focusing and
expanding the Company's market position in PCIe, and by significantly
reducing operating expenses, while increasing stockholder equity by
almost 20 percent in the process. Combined with record profits, PLX
Technology has paid down debt and increased our cash levels to
provide additional balance sheet strength. During this period, we
have continued to invest in our market-leading switch products while
also expanding our addressable market with new innovative solutions
to serve PCIe Solid State Drives (SSD) and network fabrics (PLX's
ExpressFabric) within the cloud and data center to provide additional
organic growth for years to come.  
We believe the combination of a record design win pipe to fuel growth
combined with further leveraging of the PCIe-focused operating model
can produce increased profitability over the coming years. While we
are confident in the outlook for PCIe, its growth may not always be
linear. Four years ago the design activity pipeline, which creates
future growth as programs go into production, with the previous PCIe
Gen2 technology, resulted in PCIe revenues more than doubling from
2009 to 2012. Today, our overall design activity pipeline is greater
than three times the size it was in 2009, but now with Gen3 driving
the activity. Therefore, we believe this puts PLX Technology in an
excellent position to see similar or better results over the next
three years as our design pipeline goes to production serving this
growing market.  
Your Board and management team are focused on execution and
optimization, as well as market-leading product design. PLX
Technology is gaining greater market share, expanding our business
and achieving growth through a robust pipeline and portfolio:  


 
--  Year to date, PCIe has experienced record revenues as well as design
    wins and PCIe now comprises more than 70 percent of the Company's
    revenue. Innovative products, an improving competitive landscape and
    our blue-chip customer base continue to drive our market share up.
    PCIe Gen3 customer design wins in 2012 and 2013 include every one of
    the top enterprise server, storage and networking companies around the
    world, including Cisco, Dell, EMC, NetApp, HP, IBM, Huawei, Fujitsu,
    Juniper, Intel and Brocade.
--  The Company expects to close the year with 18 PCIe Gen3 switch
    products in production. Only one other supplier is known to have three
    devices, thus positioning us more attractively to a broader customer
    base with diverse requirements. PLX is not aware of losing a single
    significant design over the past six months.
--  The Company's objective is to quadruple the size of the addressable
    market by 2017 by focused product innovation and leveraging internal
    skills rather than expansion by acquisition. The team is doing this by
    driving higher attach rates in current market segments and taking
    advantage of emerging growth opportunities like PCIe solid state disks
    (SSD). The ExpressFabric program opens up an entirely new, large
    addressable market as a fabric outside the box with silicon and system
    level products. This solution offers the lowest power and cost at a
    very high performance level. All of these products serve the growing
    demand for equipment within the cloud and data center to handle the
    ever-increasing traffic and storage needs of the connected world.

  
Through the continued execution of our operational and strategic
initiatives, the Company is delivering solid and improving
performance.  
YOUR BOARD'S DIRECTOR NOMINEES ARE INDEPENDENT AND HAVE THE RIGHT
EXPERTISE TO MAXIMIZE VALUE FOR ALL PLX TECHNOLOGY STOCKHOLDERS  
Your directors are proven business leaders who possess deep knowledge
of PLX Technology and its end markets. Importantly, your Board has
proven itself to be flexible, adaptable and experienced at capturing
growth through new technology waves. Your Board has the experience,
qualifications and independence necessary to provide effective
oversight and direction to the Company. It has a proven track record
at PLX Technology, including oversight of PCIe's growth into a market
leading position at a compounded annual growth rate greater than 25
percent from 2006 to 2012, outperforming every competitor that has
entered the space, including IDT, NEC, Pericom, Tundra, Texas
Instruments, and others.  
In short, your Board has demonstrated that it has the skills
necessary to guide PLX Technology to identify and create new major
market opportunities, continue to be nimble and position the Company
for continued success as the environment in which we operate evolves.
We strongly believe the leadership and continuity of your Board is
critical to the success of PLX Technology's ongoing delivery of
profitable growth and stockholder value.  
YOUR BOARD HAS BEEN REASONABLE AND OPEN TO A RESOLUTION WITH POTOMAC
CAPITAL  
Your Board values the input of Potomac Capital, as we do that of all
of our stockholders, and has made repeated attempts to avoid a costly
and disruptive proxy contest at the upcoming Annual Meeting. Your
Board engaged with Potomac Capital on numerous occasions with a goal
of reaching a constructive resolution in the best interest of all
stockholders, but to no avail.  
In a sign of further good faith, your Board offered to add three new
nominees to the Board, including two nominees of Potomac Capital and
a third nominee to be mutually agreed upon. In addition, your Board
offered to have two existing members not stand for re-election at the
2013 Annual Meeting, which would have resulted in a nine member
Board. Putting it into context, Potomac Capital was offered direct
control of more than 20 percent of the Board, far exceeding its
ownership of approximately 10 percent of the Company's outstanding
shares. In exchange, your Board requested that Potomac Capital agree
to customary standstill restrictions. Potomac Capital rejected your
Board's reasonable settlement offer and, to date, continues to be
unwilling to work constructively with your Board to reach a mutually
agreeable resolution.  
Despite your Board's best efforts to resolve this matter, we believe
that Potomac Capital remains solely interested in pursuing a proxy
contest to promote its own interest with apparent disregard of other
stockholders. In its most recent response to our settlement proposal,
Potomac Capital was unreasonable in insisting on significant
standstill carve-outs that would allow it to, among other things,
interfere with value-maximizing transactions approved by your Board,
conditions that could inhibit the Company from maximizing value for
stockholders. Additionally, Potomac Capital insisted that it now
wants three current members of your Board not to stand for
re-election, with Potomac Capital determining who those three
directors would be - a provision that would enable Potomac Capital to
force off the three Board members who it believes are most likely to
impede its self-serving plans. Potomac Capital also requested broad
observer rights to participate in your Board's meetings prior to the
2013 Annual Meeting but did not indicate it was revising its previous
opposition to executing a non-disclosure agreement with us - an
absurd and unworkable scenario that would impede our ability to
engage openly and have productive Board meetings.  
Your Board believes Potomac Capital's actions demonstrate that it is
only interested in its self-serving agenda at any cost to the Company
and irrespective of the cost to all other PLX Technology
stockholders.  
PROTECT YOUR INVESTMENT - VOTE THE WHITE PROXY CARD TODAY  
We urge stockholders to support the election of your Board's eight
highly qualified director nominees. Your Board unanimously recommends
that stockholders vote "FOR" the Company's eight experienced and
highly qualified director nominees: D. James Guzy, John H. Hart,
David Raun, Thomas Riordan, Michael J. Salameh, Ralph Schmitt, Robert
H. Smith and Patrick Verderico.  
Whether or not you plan to attend the Annual Meeting and no matter
how many or how few shares of PLX Technology you own, we urge you to
protect your investment in the Company by voting the WHITE proxy card
today. You can vote today by telephone, by Internet, or by signing
and dating the enclosed WHITE proxy card and returning it in the
postage-paid envelope provided. Please do not return or otherwise
vote any proxy card sent to you by Potomac Capital.  
On behalf of your Board of Directors, we thank you for your continued
support. 
 Sincerely,  
/D. James Guzy/  
 D. James Guzy  
 Independent Chairman of the Board
of Directors 
/David Raun/ 
 David Raun 
 President, Chief Executive Officer and
Director   
If you have any questions, require assistance with voting your WHITE
proxy card, or need additional copies of the proxy materials, please
contact: 
105 Madison Avenue 
 New York, NY 10016   
proxy@mackenziepartners.com  
(212) 929-5500 (Call Collect) 
 Or 
 TOLL-FREE (800) 322-2885 
About PLX 
 PLX Technology, Inc. (NASDAQ: PLXT), based in Sunnyvale,
Calif., USA, is the industry-leading global provider of
semiconductor-based PCI Express connectivity solutions primarily
targeting enterprise data center markets. The Company develops
innovative software-enriched silicon that enables product
differentiation, reliable interoperability and superior performance.
Visit PLX on plxtech.com, LinkedIn, Facebook, Twitter and YouTube.  
PLX, and the PLX logo, are trademarks of PLX Technology, Inc., which
may be registered in some jurisdictions. All other product names that
appear in this material are for identification purposes only and are
acknowledged to be trademarks or registered trademarks of their
respective organizations. 
FORWARD-LOOKING STATEMENTS 
 This letter includes statements that
qualify as forward-looking statements under the Private Securities
Litigation Reform Act of 1995. These include statements about PLX's
future potential, design wins, and expected revenue related to design
wins. Such statements involve risks and uncertainties, which may
cause actual results to differ materially from those set forth in the
statements. Factors that could cause actual results to differ
materially include risks and uncertainties, such as reduced demand
for products of electronic equipment manufacturers that use the
Company's products, adverse economic conditions in general or those
specifically affecting the Company's markets, technical difficulties
and delays in the development process, errors in the products,
reduced backlog for the Company's customers and unexpected expenses.
Please refer to the documents filed by the Company with the SEC from
time to time, including, but not limited to, the Annual Report on
Form 10-K for the year ended December 31, 2012, and PLX's quarterly
report on Form 10-Q for the quarters ended March 31, 2013, June 30,
2013, and September 30, 2013, which identifies important risk factors
that could cause actual results to differ from those contained in the
forward-looking statements. All forward-looking statements are made
as of today, and the Company assumes no obligation to update such
statements.  
IMPORTANT ADDITIONAL INFORMATION 
 PLX, its directors and certain of
its executive officers and employees are deemed to be participants in
the solicitation of proxies from PLX's stockholders in connection
with the 2013 Annual Meeting. PLX has filed a definitive proxy
statement with the SEC on November 12, 2013 in connection with the
solicitation of proxies for the 2013 Annual Meeting (the "PLX Proxy
Statement"). STOCKHOLDERS ARE URGED TO READ THE PLX PROXY STATEMENT
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER
RELEVANT DOCUMENTS THAT PLX WILL FILE WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Additional
information regarding the identity of these participants and their
direct or indirect interests, by security holdings or otherwise, is
set forth in the PLX Proxy Statement.  
Stockholders can obtain, free of charge, copies of the PLX Proxy
Statement and any other documents filed by PLX with the SEC in
connection with the 2013 Annual Meeting at the SEC's website
(www.sec.gov), at PLX's website (www.plxtech.com) or by writing to
PLX's investor relations department at 870 W. Maude Avenue,
Sunnyvale, California 94085. In addition, copies of the proxy
materials may be requested from PLX's proxy solicitor, MacKenzie
Partners, Inc., 105 Madison Avenue, New York, NY 10016 or toll-free
at (800) 322-2885.  
CONTACTS 
Investor Relations: 
Leslie Green 
Green Communications Consulting, LLC (for PLX) 
(650) 312-9060 
leslie@greencommunicationsllc.com  
Amy Bilbija 
(212) 929-5802 
ABilbija@mackenziepartners.com  
Media Relations: 
Jamie Moser 
(212) 355-4449 x8642 
JMoser@joelefrank.com 
 
 
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