Knowles Corporation (NYSE: KN), a market leader and global provider of
advanced micro-acoustic, audio processing and precision device
solutions, today announced that it has entered into a Settlement
Agreement with Caligan Partners, LP, Falcon Edge Capital, LP and Patriot
Global Management, LP (the “Group”). As part of this agreement, the
Board of Directors will add Steven F. Mayer to the Knowles Board
effective immediately. Mr. Mayer will also stand for election at the
2019 Annual Meeting. Mr. Mayer’s appointment will expand the Knowles
Board to 10 directors, nine of whom are independent and five of whom
will have been appointed in the last four years.
In addition, the Governance and Nominating Committee of the Knowles
Board and the Group will search for an additional mutually agreed upon
independent director to be identified next year. Furthermore, following
approval at the 2018 Annual Meeting of Shareholders, the Knowles Board
will continue its process of phased declassification beginning at the
2019 Annual Meeting and concluding at the 2021 Annual Meeting of
Shareholders, after which the entire Board will stand for election
annually. The Knowles Board also continues to unanimously recommend that
shareholders vote in favor of proposals at the 2019 Annual Meeting to
eliminate the supermajority vote requirements for amending the Company’s
governance documents.
“The Knowles Board is committed to best-in-class governance and we are
pleased to add Steve as a new independent director along with our other
experienced and highly qualified nominees,” said Donald Macleod,
Chairman of the Knowles Board. “We look forward to working together to
drive sustainable growth and enhance value for all Knowles shareholders.”
“Knowles is the market leader in micro-acoustic components and
high-reliability ceramic capacitors and filters, with a rich history of
innovation. We look forward to working constructively with Steve and the
Knowles Board to help the Company achieve its substantial potential,”
said a spokesperson for the Group.
Knowles has entered into an agreement with the Group under which the
Group has agreed to withdraw its slate of director nominees and vote all
of its shares in support of Knowles’ full slate of directors at the
Company’s 2019 Annual Meeting. Additionally, the Group has agreed to
customary standstill and other provisions. The full agreement will be
filed on Form 8-K with the U.S. Securities and Exchange Commission (SEC).
Knowles plans to file with the SEC a supplement to its definitive proxy
statement, accompanied by a revised WHITE proxy card on which Knowles
shareholders can vote to elect the Company’s four director nominees,
including Mr. Mayer. Knowles shareholders who previously voted may
change their vote by executing a WHITE proxy card or by voting by
telephone or through the Internet by following the instructions shown on
the WHITE proxy card. Only the latest dated proxy submitted will be
counted.
J.P. Morgan is serving as Knowles’ financial advisor and Sidley Austin
LLP is serving as the Company’s legal advisor. Schulte, Roth & Zabel is
representing the Group.
2019 Analyst Day
Knowles also announced today that it plans to host an Analyst Day in the
fall of 2019. Specific details will be provided at a later date.
About Steven F. Mayer
Steven Mayer is the Chief Executive Officer of Iron Horse Acquisition
Corp. and Dedication Capital, LLC, privately held investment vehicles.
From 2002 until 2018, he held a variety of senior positions with
Cerberus Capital Management, L.P. and Cerberus California, LLC,
affiliated private investment firms, most recently serving as Senior
Managing Director, Co-Head of Global Private Equity, and Chairman of the
Cerberus Investment Committee.
Previously, Mr. Mayer was an executive managing director of Gores
Technology Group, a private equity investment firm that acquires
controlling interests in and manages underperforming and non-core
technology and telecommunications companies. Prior to joining Gores, Mr.
Mayer served as a managing director of Libra Capital Partners, L.P. and
Aries Capital Group, LLC, and was a principal with Apollo Advisors, L.P.
and Lion Advisors, L.P., affiliated private equity investment firms.
Prior to that time, Mr. Mayer was an attorney with Sullivan & Cromwell
specializing in mergers, acquisitions, divestitures, leveraged buyouts
and corporate finance.
Mr. Mayer has served as a member of the board of directors or equivalent
body of a large number of companies in a wide variety of industries in
the United States and Europe, and is currently a member of the Board of
Directors of Grifols, S.A. and the Board of Supervisors of Syntellix AG.
Mr. Mayer holds a Bachelor in Arts from Princeton University and a
Degree in Law (JD, Juris Doctor) from Harvard Law School.
About Knowles:
Knowles Corporation (NYSE: KN) is a market leader and global provider of
advanced micro-acoustic, audio processing, and precision device
solutions, serving the mobile consumer electronics, communications,
medical, defense, automotive, and industrial markets. Knowles uses its
leading position in MEMS (micro-electro-mechanical systems) microphones
and strong capabilities in audio processing technologies to optimize
audio systems and improve the user experience in mobile, ear, and IoT
applications. Knowles is also the leader in acoustic components,
high-end capacitors, and mmWave RF solutions for a diverse set of
markets. Knowles’ focus on the customer, combined with unique
technology, proprietary manufacturing techniques, rigorous testing, and
global scale, enables it to deliver innovative solutions that optimize
the user experience. Founded in 1946 and headquartered in Itasca,
Illinois, Knowles is a global organization with employees in 11
countries. The company was spun out from Dover Corporation in 2014 and
has been focused on reshaping its business portfolio and investing in
high value solutions to diversify its revenue and increase exposure to
high-growth markets. For more information, visit knowles.com.
Forward Looking Statements
This news release contains forward-looking statements within the meaning
of the safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995. The words “believe,” “expect,”
“anticipate,” “project,” “estimate,” “budget,” “continue,” “could,”
“intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,”
“will,” “would,” “objective,” “forecast,” “goal,” “guidance,” “outlook,”
“effort,” “target,” and similar expressions, among others, generally
identify forward-looking statements, which speak only as of the date the
statements were made. The statements in this news release are based on
currently available information and the current expectations, forecasts,
and assumptions of Knowles’ management concerning risks and
uncertainties that could cause actual outcomes or results to differ
materially from those outcomes or results that are projected,
anticipated, or implied in these statements. These risks and
uncertainties include, but are not limited to: unforeseen changes in
MEMS microphone demand from our largest customers, in particular, two
North American, a Korean, and Chinese OEM customers; the success and
rate of multi-microphone and smart microphone adoption and proliferation
of our “intelligent audio” solutions, including our audio edge
processors, to high volume platforms; our ongoing ability to execute our
strategy to diversify our end markets and customers; our ability to stem
or overcome price erosion in our segments; fluctuations in our stock’s
market price; fluctuations in operating results and cash flows; our
ability to prevent or identify quality issues in our products or to
promptly remedy any such issues that are identified; the timing of OEM
product launches; risks associated with increasing our inventories in
advance of anticipated orders by customers; macroeconomic conditions,
both in the U.S. and internationally; the impact of changes to laws and
regulations that affect the Company’s ability to offer products or
services to customers in different regions; risks associated with
shareholder activism, including proxy contests; our ability to achieve
continued reductions in our operating expenses; our ability to obtain,
enforce, defend or monetize our intellectual property rights; increases
in the costs of critical raw materials and components; availability of
raw materials and components; managing new product ramps and
introductions for our customers; our dependence on a limited number of
large customers; our ability to maintain and expand our existing
relationships with leading OEMs in order to maintain and increase our
revenue; increasing competition and new entrants in the market for our
products; our ability to develop new or enhanced products or
technologies in a timely manner that achieve market acceptance; our
reliance on third parties to manufacture, assemble, and test our
products and sub-components; government trade restrictions and
import/export controls; financial risks, including risks relating to
currency fluctuations, credit risks and fluctuations in the market value
of the Company; and changes in tax laws, changes in tax rates and
exposure to additional tax liabilities; and other risks, relevant
factors, and uncertainties identified in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2018, subsequent Reports on Forms
10-Q and 8-K and our other filings we make with the U.S. Securities and
Exchange Commission (the “SEC”). Knowles disclaims any intention or
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except as
required by law.
Important Additional Information and Where to Find It
The Company has filed a definitive a proxy statement on Schedule 14A and
accompanying WHITE proxy card with the SEC in connection with the
solicitation of proxies for its 2019 Annual Meeting of Shareholders (the
“Definitive Proxy Statement”). SHAREHOLDERS ARE STRONGLY ADVISED TO READ
THE COMPANY’S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER DOCUMENTS FILED WITH THE SEC WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Shareholders may obtain a free copy of the Definitive Proxy Statement
and accompanying WHITE proxy card, any amendments or supplements to the
Definitive Proxy Statement and other documents that the Company files
with the SEC from the SEC’s website at www.sec.gov
or the Company’s website at www.investor.knowles.com
as soon as reasonably practicable after such materials are
electronically filed with, or furnished to, the SEC.
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