Provides Additional Details Regarding the Special Meeting TEL AVIV,
Israel, May 9 /PRNewswire-FirstCall/ -- Scopus Video Networks Ltd.
(NASDAQ:SCOP), a provider of digital video networking products,
today announced that it will be mailing the following letter to
shareholders in connection with the Company's June 16, 2008 Special
Meeting of Shareholders. The letter provides additional details
regarding the Special Meeting. The full text of the letter follows:
Dear Shareholder: You are cordially invited to attend the Special
Meeting of Shareholders of Scopus Video Networks Ltd. ("we," the
"Company" or "Scopus") to be held at our offices located at 10
Ha'amal Street, Park-Afek, Rosh-Ha'ayin 48092, Israel on Monday,
June 16, 2008, at 4:00 p.m., local time, and thereafter as it may
be adjourned from time to time (the "Meeting"). The Meeting is of
particular importance. As you may know, on April 18, 2008, Optibase
Ltd. ("Optibase"), a 37% shareholder of the Company, demanded that
we convene, within 21 days, a shareholder meeting to (1) approve a
resolution that will declassify our Board of Directors and (2)
elect a slate of directors proposed by Optibase, such that,
following adoption of these resolutions, our Board of Directors
will be comprised by a majority of Optibase's nominees. This demand
came shortly after the negotiations between Scopus and Optibase
regarding a possible business combination were suspended. See under
"Important Background" below. Your Board is willing to recognize
the views of some investors, including Optibase for that matter,
who believe that a classified board structure may reduce the
accountability of directors to shareholders because the directors
on such a board do not face an annual election. However, in light
of the recent negotiations between the parties, your Board is
concerned by the timing of Optibase's proposals and their motives.
In light of the foregoing, your Board proposes an alternative
resolution (Proposal #1 on your proxy card), whereby the Board will
be declassified, but such declassification will become effective as
of the next annual meeting of shareholders, which is scheduled to
take place by January 2009 at the latest. Adopting this proposal
will allow your Board, which is currently comprised by directors
who are not affiliated with Optibase, time to consider strategic
alternatives, including, if desirable, resuming negotiations of an
arms length transaction with Optibase. The Board therefore
recommends a vote "FOR" Proposal #1. Your Board's unanimous view is
that our proposal (Proposal #1), better serves the interests of all
of our shareholders. Optibase's proposals (Proposals #2 and #3) are
adequately addressed by Proposal #1 and are likely to interfere
with the ability of your Board to consider strategic alternatives,
including to negotiate an arms-length transaction with Optibase.
The Board therefore recommends a vote "AGAINST" Proposals #2 and
#3. Important Background Commencing September 2007, we and Optibase
held preliminary discussions regarding a possible negotiated
business transaction. During such discussions, we explored a few
alternatives, including a full merger of Scopus and Optibase.
Beginning January 2008, we engaged in preliminary negotiations with
Optibase regarding a possible acquisition by Scopus of Optibase's
operations through an asset purchase transaction. During February
and March 2008, these negotiations evolved and led to an extensive
due diligence and the exchange of draft transaction documents,
whereby we were considering to acquire Optibase's operations in
consideration for ordinary shares of Scopus. The proposed
transaction entailed, among others, a termination of the current
classified structure of the Board and appointment of
representatives of Optibase to our Board. However, in early April
2008, the negotiations strained, when, in our view, Optibase was
attempting to renegotiate some of the key terms of the transaction,
primarily the proposed consideration. We thereafter made a good
faith attempt to propose a viable solution, which was communicated
to Optibase on April 14, 2008. Optibase responded by sending us its
proposed shareholder resolutions on Friday, April 18th, effectively
"suspending" (using Optibase's own words) the negotiations. During
the discussions and negotiations with Optibase, your Board held
numerous meetings to carefully evaluate the transaction and ensure
that the interests of all shareholders are protected. While we
believe that a fair transaction with Optibase could be achieved,
Optibase has chosen to use its position as a principal shareholder
of the Company to attempt to replace your Board. This, in our mind,
will allow Optibase to impose a transaction which, in your Board's
view, would have provided disproportionate benefits to Optibase to
the detriment of our other shareholders. In other words, we believe
that Optibase's interest is not aligned with those of our other
shareholders. For additional information, you are encouraged to
read the description under the section entitled "Introduction -
important Background" in the Proxy Statement. Our Proposal
(Proposal #1 in the Proxy Card) As described above, your Board is
concerned by the timing of Optibase's proposals and their motives.
To that end, your Board proposes to adopt a proposal to declassify
the Board, but only effective as of the next annual meeting of
shareholders. Adopting this proposal will allow your Board, which
is currently comprised by directors who are not affiliated with
Optibase, time to consider strategic alternatives, including
resuming negotiations of an arms-length transaction with Optibase.
The Board therefore recommends a vote "FOR" Proposal #1. Optibase
Proposals (Proposals #2 and #3 in the Proxy Card) In its letter of
April 18, 2008, Optibase proposed to (1) amend our Articles of
Association in a manner that will essentially repeal the current
classified structure of our Board and (2) subject to approval of
the foregoing resolution, elect Shlomo (Tom) Wyler, Alex Hilman,
Yaron Simler, Orit Leitman and Tali Yaron-Eldar to our Board. In
such letter, Optibase states that it believes "that the ability to
elect directors is the single most important use of the shareholder
franchise. Accordingly, directors should be accountable to
shareholders on an annual basis. The election of directors by
classes, for three-year terms, in our opinion, minimizes
accountability and precludes the full exercise of the rights of
shareholders to approve or disapprove annually the performance of a
director or directors. We believe that Scopus' financial
performance is linked to its corporate governance policies and
procedures, and the level of management accountability they
impose." With the assistance of its independent legal advisors,
your Board has given Optibase's proposals and arguments significant
consideration. While we believe these are all fair, yet routine,
arguments (that we believe are adequately addressed by our Proposal
#1), we cannot help but wonder on the timing of such proposals and
their motives in light of the recent developments described above.
While Optibase states that our financial performance is linked to
our corporate governance policies and procedures, it does not
attempt to share with you (or us for that matter) its insight of
how it intends to improve financial performance or enhance
shareholder value. Actually, we believe we had a positive start to
2008, as demonstrated by our operating results for the first
quarter in 2008, including reaching a first quarter record of $16.4
million in revenues and continued improvement in other business
fundamentals. As far as we know, proposals to declassify the board
and/or present a proponent's nominees, tend to come with some
proposed agenda or suggestions in this respect. All that we could
find in this respect (in the Schedule 13D that Optibase filed with
the SEC on April 18th), is that Optibase "reserves the right to
continue discussions with the Issuer's board of directors,
management and/or representatives with respect to a possible
negotiated business transaction." If this is indeed the "plan," we
defer to you, our shareholders, to determine what type of Board is
more well-equipped to continue such discussions. Moreover, if
Optibase desires to allow all shareholders to register their views
on the identity of the directors serving on the Board on an annual
basis, it should have allowed all shareholders ample time to
suggest their own candidates to the Board. By suggesting its own
slate of directors at the same meeting designed to restructure the
manner in which directors have been elected since we first went
public in 2005, Optibase, in our view, hinders the ability of other
shareholders to exercise their rights to share in the election
process and, consequently, undermines the legitimacy of Optibase's
own arguments. Retaining the classified board structure for a
limited time, as proposed by us in Proposal #1, would protect the
Boards' independence and improve the Board's ability to consider
strategic alternatives and allow the Board an opportunity to
achieve a result which maximizes shareholder value. The Board
therefore recommends a vote "AGAINST" Proposals #2 and #3. How to
Vote We encourage you to read carefully the proxy statement, which
discusses in detail the various matters to be voted upon at the
Special Meeting. Your vote is very important! Whether or not you
plan to attend the meeting, it is important that your shares be
represented. Accordingly, you are kindly requested to complete,
date and sign the enclosed form of proxy and return it promptly in
the pre-addressed envelope provided, so as to be received not later
than 48 hours before the Meeting. No postage will be required if
mailed in the United States. As evident by our own Proposal #1,
this is not a fight for keeping the classified board structure. It
is a contest for allowing us to execute our strategic business plan
and provide the Board an opportunity to achieve a result which
maximizes shareholder value. The Board urges you to send Optibase a
message by voting for Proposal #1 (and against Proposals #2 and
#3). We appreciate your continuing interest in Scopus Video
Networks Ltd. Very truly yours, David Mahlab Chairman of the Board
of Directors About Scopus Video Networks Scopus Video Networks
(NASDAQ:SCOP) develops, markets and supports digital video
networking solutions that enable network operators to offer
advanced video services to their subscribers. Scopus' solutions
support digital television, HDTV, live event coverage and content
distribution. Scopus' comprehensive digital video networking
solution offerintelligent video gateways, encoders, decoders and
network management products. Scopus' solutions are designed to
allow network operators to increase service revenues, improve
customer retention and minimize capital and operating expenses.
Scopus' customers include satellite, cable and terrestrial
operators, broadcasters and telecom service providers. Scopus'
products are used by hundreds of network operators worldwide. For
more information visit: http://www.scopus.net/ FORWARD-LOOKING
STATEMENTS This press release and the letter quoted herein may
include "forward-looking statements" that are not purely historical
regarding our intentions, hopes, beliefs, expectations and
strategies for the future. Forward-looking statements that are
based on various assumptions may be identified by the use of
forward-looking terminology, such as "may," "expects," "intends,"
"believes," "view" and similar words and phrases. Such
forward-looking statements are inherently subject to known and
unknown risks and uncertainties. Actual results could differ
materially from those set forth in forward-looking statements due
to a variety of factors, including those set forth in our annual
report on Form 20-F. Except as required by law, Scopus does not
undertake any obligation to update forward-looking statements made
herein. Company Contact: Investor Relations Contact Moshe Eisenberg
Ehud Helft / Kenny Green Chief Financial Officer GK Investor
Relations Tel: +972-3-900-7100 Tel: (US) +1-646-201-9246
DATASOURCE: Scopus Network Technologies Ltd CONTACT: Company
Contact: Moshe Eisenberg, Chief Financial Officer, Tel:
+972-3-900-7100, ; Investor Relations Contact: Ehud Helft / Kenny
Green, GK Investor Relations, Tel: (US) +1-646-201-9246,
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