Celeritek and shareholders reach a settlement
Under the terms of the settlement, Celeritek will expand its board from six directors to seven. The new board will be composed of three of Celeritek s current directors, Tamer Husseini, Charles Waite and Robert Gallagher, three directors nominated by the CSPC, Bryant Riley, Lloyd Miller and Michael Targoff, and J. Michael Gullard, who is not affiliated with either the company or the CSPC. Gullard is general partner of Cornerstone Management, a enture capital and consulting firm that provides strategic focus and direction for technology companies primarily in the software and data communications industries.
The CSPC was formed by a shareholder group whose discontent arose over the board’s handling of a takeover offer from Anaren Microwave. The group highlighted a number of perceived shortcomings in the board’s management and called for the replacement of the entire board by vote at a special meeting scheduled for May 19.
Celeritek and the CSPC have agreed to postpone the special meeting until May 28, 2003 so that the parties can draft and execute a definitive agreement memorializing the terms of the settlement. Upon the execution of the definitive agreement, the special meeting will be cancelled. In addition, the CSPC and its members and related parties have agreed to various customary standstill provisions, which will be in effect until the adjournment of Celeritek s 2004 annual meeting of shareholders.
The terms of the settlement also indicate that at least one of the directors nominated by the CSPC will be appointed to each committee of the company s board, and that Bryant Riley will serve on the audit committee.
Celeritek also will terminate the company s shareholder rights plan and, subject to certain exceptions, the company will not implement a new rights plan at any time prior to its 2004 annual meeting of shareholders.
"We are pleased to be able to resolve this matter and remove the uncertainty created by the proxy contest,” said Tamer Husseini, Celeritek s chairman and CEO. “Our objective is to do what is right for our shareholders and we believe that our agreement with the CSPC does just that. With the advice and assistance of our new directors, we will continue to focus on delivering value to all of the company s shareholders. We will continue to take the steps that we believe are in our shareholders best interest and look forward to reporting on our continued progress along the way."
