MENASHE, Israel--(BUSINESS WIRE)--Kibbutz Sdot-Yam, the founder and largest shareholder of Caesarstone
Sdot-Yam Ltd. (NASDAQ:CSTE) (“Caesarstone” or the “Company”), owning
approximately 32.4% of the Company’s outstanding shares, today sent the
following letter to all Caesarstone shareholders in response to
assertions made by Caesarstone management in its recent investor
presentation. Below the Kibbutz corrects substantial inaccuracies put
forth by management regarding the Kibbutz’s proposed independent board
candidates, the process for proposing these candidates and its interests
The Kibbutz urges all Caesarstone shareholders to vote the GOLD proxy
card today to elect independent nominees Yitzhak Sharir and Amnon Dick
to the Caesarstone board of directors.
The full text of the letter follows:
Dear fellow Caesarstone shareholder:
There has been a great deal of inaccurate information propagated by
Caesarstone management against the Kibbutz, our interests and our
independent director nominees. We want to take this opportunity to
set the record straight. We hope doing so will help inform
shareholders as they decide for themselves who the best directors are to
help the Company deal with its current challenges and achieve its true
What CSTE management claims
The real facts are
The Kibbutz seeks to control the Company’s board
Regardless of the outcome of the vote, the Kibbutz will have
only 3 out of 9 directors on the board.
The Kibbutz voluntarily, without a request from other board
members or management, gave up the chairmanship of the board,
which the Kibbutz had held since the Company’s IPO, in order to
ensure that the chairman would be independent.
We are seeking to add 2 highly qualified directors with
complete independence from both the Kibbutz and from
We believe these 2 individuals will provide accountability for
the board and much needed oversight of management.
The Kibbutz’s interests are not aligned with those of the
company’s public shareholders
As founder and the largest shareholder of the Company, with the
vast majority of the Kibbutz’s net worth invested in
Caesarstone, our interests in growing and maximizing shareholder
value are completely aligned with all shareholders.
The Kibbutz’s investment in CSTE is by far our most valuable
asset, representing more than 90% of our equity. We are
laser-focused on enhancing the value of the Company and its
stock, which is precisely why we believe the board needs new,
independent directors who will fulfill their fiduciary duty to
enhance value for all shareholders.
The directors proposed by the Kibbutz are not independent
The directors proposed from the Kibbutz are not affiliated with
the Kibbutz and we have no material relationship with them.
Mr. Dick was previously chairman of another company (for only 3
months, and was nominated by another stockholder) where we have
a small interest as a stockholder, and we saw first-hand his
skills and talent as a director.
However, at the time we suggested him as a nominee for
Caesarstone, he was no longer on the board of NiceVend Ltd., nor
in any way affiliated with the Kibbutz.
The Kibbutz’s method of proposing candidates runs counter to
notions of good governance
We have done all we can to work with the board and nominating
committee to put forward exceptional, independent and
Last year we suggested 5 qualified and independent candidates as
part of the nominating committee’s search. Management rejected
each of them with no valid reason.
The Company refuses to even discuss with the Kibbutz the
identity of its director nominees.
We have exhausted all other avenues of recourse. All our
requests to meet with the Company have gone unanswered. This
proxy contest is our last resort to ensure truly independent
directors are added to the board who can provide a
counterbalance to management as well as oversight and
Management suggested and introduced director nominee Ronald
Kaplan to the nominating committee
As part of the search process for new, independent board
candidates, the Kibbutz, at its own initiative and expense,
engaged JP Morgan, to find a highly qualified and well-respected
director in the U.S. that could join the board.
JP Morgan recommended Mr. Kaplan who was then interviewed by
management and the board.
Contrary to management’s assertions, we proposed Mr.
Kaplan as a nominee, since we believed and still believe that
having a qualified American on the board is very important for
the Company. We fully support Mr. Kaplan’s candidacy on
the CSTE board and hope that he, alongside the 2 independent
nominees we are proposing, will bring about meaningful and
much-needed improvement to Caesarstone’s board of directors and
We believe that having an American director is important to
addressing the Company’s largest growth opportunity in the U.S.
The Company has instituted strong corporate governance practices
The CEO does not permit the board to meet in executive sessions
in which the CEO is not present.
The CEO exercises undue influence on several directors and it is
apparent to us that their independence is compromised.
The CEO is deeply involved in selecting Board members. The CEO
even tries to influence internal Kibbutz procedures in its
capacity as a shareholder.
Management’s nominees are both independent
Current director Mr. Melamed has established a close alliance
with the Company’s CEO after 8 years of service on the board. We
have witnessed firsthand that this relationship hinders Mr.
Melamed’s ability to challenge the CEO’s decisions, provide
adequate oversight or exercise independent judgment.
Current director Mr. Tsimchi worked as a director alongside the
Company’s CEO at Tefron Ltd. for 3 years; we believe, and the
experience of the past year has shown, that Mr. Tsimchi is
similarly unlikely to challenge the CEO’s decisions or offer an
objective and independent view.
Based on our experience, management's nominees will do nothing
to correct the corporate governance lapses, which led 2 highly
regarded directors to resign from the board in the last 3
months, and will continue to allow the CEO to dominate the board.
Vote The GOLD Proxy Card TODAY!
Support Good Corporate Governance and Help Realize Caesarstone's
We recommend that you vote "FOR" each of the director nominees who
are listed in Proposals 1 and 3, and "AGAINST" each of the Company's
director nominees, who are listed in Proposal 2. We furthermore
recommend that you vote "AGAINST" Proposal 4 (as the current chairman of
the board is not among the candidates we are nominating or support) and
"FOR" Proposals 5, 6, 7 and 8 to be considered at the meeting.
Even if you have already completed and submitted the WHITE proxy card or
voting instruction form sent to you by the Company's board of directors,
you can still change your vote by submitting a later-dated GOLD proxy
card or voting instruction form. Only your latest-dated, validly
executed proxy card will be counted at the meeting.
If you have any questions, require additional copies of our proxy
materials or need assistance in voting on your GOLD proxy card, please
contact our proxy solicitor at the phone numbers or email listed below:
105 Madison Avenue
New York, New York 10016
Call Toll-Free (800) 322-2885 (North America) or
Collect at + (212) 929-5500 or
Founded in 1937 near Haifa, Israel, Kibbutz Sdot-Yam, today based in
Caesarea, is the largest shareholder of Caesarstone Sdot-Yam Ltd.
(NASDAQ: CSTE), with approximately 32.4% of the shares in the Company.
Initially formed as a fishing and agriculture enterprise, the Kibbutz
Sdot-Yam expanded to encompass industrial enterprises, including
Caesarstone, a global leader and pioneer in quartz surfaces for a
variety of uses and applications such as kitchen countertops, bathroom
vanities, flooring, wall cladding and more. Launched by Kibbutz Sdot-Yam
in 1987, Caesarstone products are available in more than 40 countries
around the world.