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 issued the following letter to all Caesarstone shareholders in response to Caesarstone management’s continued campaign to mislead Caesarstone’s shareholders.
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 Caesarstone shareholder,
We read, with dismay, the letter issued by Caesarstone’s management on November 23. Instead of responding to the substantive points we have raised regarding the lack of true independence of management’s board nominees, and the need to improve the functioning of the company’s board of directors, management has chosen to mislead Caesarstone’s shareholders by criticizing the company’s largest shareholder. We have confidence that Caesarstone’s shareholders will see past these desperation tactics, and focus on the true issue before them: the lack of independence from management’s overbearing influence on Caesarstone’s board of directors.
Most significantly, management’s letter does not deny the key issues that we have raised regarding their “independent” nominees. They do not deny that Ofer Tsimchi is a long-time business associate of the CEO, from their time together at Tefron, and that the CEO suggested his candidacy to the board of directors for this reason. Shouldn’t this make you suspicious of his ability to provide true oversight of management’s performance? Ironically, management challenges the independence of our candidate, Amnon Dick, by saying that he served as “director and chairman of the board” at another company “held by the Kibbutz”. Well, the actual facts are that (i) the Kibbutz is a minority (27%) holder of this other company, (ii) Amnon Dick was nominated to serve on the board of this company by another shareholder of the company, not the Kibbutz, and (iii) he only served on the board of this company for a period of three months. All of these facts were known to the management of Caesarstone, but that hasn’t stopped them from distorting the truth in order to attack our nominee’s independence.
Management’s other “independent” nominee, Yonatan Melamed, has served with the CEO at Caesarstone for over eight years. During that time it has become clear to us that he does not exercise independent judgment, and does not question or challenge management to perform better for all shareholders.
Management also does not deny that the board of directors never meets in executive session – all meetings are held in the presence of the CEO or other employees who are subordinate to him. Management does not deny that they have refused our very reasonable request that the board of directors be advised by independent outside counsel, rather than an internal counsel who reports to the CEO.
We do wish to make one important correction to our press release of November 23, and clarify that we did not engage JP Morgan to provide services to us on this matter. We very much appreciate their continuing support to Caesarstone and all of its shareholders, including suggesting Ron Kaplan’s name as a potential director candidate to us and the company.
The choice for shareholders should be clear – if you want a truly independent board, with a clear majority of directors who are not beholden either to management or to the Kibbutz, support our slate and vote the GOLD proxy card.
KIBBUTZ SDOT YAM
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.
Please visit csteprotect.com for important documents and related information.