Chapman Capital responds to Tower Semiconductor's rejection of reorganization proposals.LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Oct. 30, 1996--Chapman Capital L.L.C. announced today that it sent the attached letter to George Morgenstern, Chairman of the Board of Tower Semiconductor Ltd., (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :TSEMF) requesting that the company re-evaluate its rejection of Chapman Capital's reorganization proposals. In discussing the proposals, Robert L. Chapman Jr., Managing Member of Chapman Capital said, "Tower's belief that `it would not be fruitful fruit·ful adj. 1. a. Producing fruit. b. Conducive to productivity; causing to bear in abundance: fruitful soil. 2. to further explore the transactions proposed' in Chapman Capital's October 10 letter is confusing con·fuse v. con·fused, con·fus·ing, con·fus·es v.tr. 1. a. To cause to be unable to think with clarity or act with intelligence or understanding; throw off. b. . With Tower's shares trading at a significant discount to the $10 per share acquisition proposal, how could further discussions involve anything but a movement toward the maximization of shareholder value?" Chapman Capital, which also encouraged Tower to consider the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of its assets (which included over $8/share in cash at June 30, 1996), received a letter from Morgenstern on October 28 rejecting Chapman Capital's liquidation and acquisition proposals. Chapman further noted, "Tower's October 22 declaration of a $1.50 per share special dividend was a wise step towards maximizing shareholder value. However, given that Co-CEO Dr. Yoav Nissan-Cohen acknowledged on that date that Tower is `sitting on a mountain of money,' the $1.50 dividend seems more of a mole hill than a mountain. The fact that Tower's shares trade at a discount to cash per share at the end of the second quarter should send a signal that the market has questions about the Board's ability to prudently allocate those resources on its own." Chapman Capital L.L.C. is an investment advisor Investment Advisor 1. A person making investment recommendations in return for a flat fee or percentage of assets managed, known as a commission. 2. For mutual fund companies, it is the individual who has the day-to-day responsibility of investing and monitoring the cash and specializing in reorganizations and turnarounds. The company is General Partner of a limited partnership with a significant interest in the equity securities of Tower Semiconductor Ltd. -0- Following is copy of Robert Chapman's letter to George Morgenstern: Robert L. Chapman Jr. Managing Member October 30, 1996 Mr. George Morgenstern Chairman of the Board Tower Semiconductor Ltd. c/o Data Systems & Software Inc. 200 Route 17 Mahwah, NJ 07430 VIA FAX: (201) 529-8330 Dear Mr. Morgenstern: As you know, I have tried to reach you several times since our September 24 conversation in which you stated that Tower Semiconductor Ltd. (Tower) would entertain an acquisition proposal for the company. While your office has assured me that you received my messages, my calls have not been returned. However, I am in receipt of your letter dated October 23, 1996 which responded to my October 10, 1996 letter to Drs. Yoav Nissan-Cohen and Rafael Levin lev·in n. Archaic Lightning. [Middle English levene, levin; see leuk- in Indo-European roots.] . I must admit that I was surprised to receive your letter which claimed to explain why Tower had rejected Chapman Capital's reorganization proposals. Tower's belief that "it would not be fruitful to further explore the transactions proposed" in Chapman Capital's October 10 letter is confusing. With Tower's shares trading at a significant discount to the $10 per share acquisition proposal, how could further discussions involve anything but a movement toward the maximization of shareholder value? Tower's October 22 declaration of a $1.50 per share special dividend was a wise step towards maximizing shareholder value. However, given that Co-CEO Dr. Yoav Nissan-Cohen acknowledged on that date that Tower is "sitting on a mountain of money," the $1.50 dividend seems more of a mole hill than a mountain. The fact that Tower's shares trade at a discount to cash per share at the end of the second quarter should send a signal that the market has questions about the Board's ability to prudently allocate those resources on its own. I encourage you (as CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Data Systems & Software Inc.) and The Israel Corporation's Shoul Eisenberg to consider the other public shareholders and to re-evaluate Chapman Capital's proposals. Unfortunately, these public shareholders are not able to obtain an agreement similar to that between Tower and DSSI DSSI Diversified Scientific Services, Inc. DSSI Digital Storage Systems Interconnect DSSI Dead Sea Scrolls Institute (Trinity Western University, Canada) DSSI Digital Small Storage Interconnect whereby Tower pays DSSI $40,000 per MONTH essentially for your own personal services personal services n. in contract law, the talents of a person which are unusual, special or unique and cannot be performed exactly the same by another. These can include the talents of an artist, an actor, a writer, or professional services. . As such conflict of interest (which inexplicably in·ex·pli·ca·ble adj. Difficult or impossible to explain or account for. in·ex  pli·ca·bil was not disclosed in your September 26, 1996 proxy statement Proxy StatementA document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. in which it was recommended that Tower shareholders re-elect re·e·lect also re-e·lect tr.v. re·e·lect·ed, re·e·lect·ing, re·e·lects To elect again. re you to the Board) does not terminate for almost two years and even then is subject to "automatic renewals," shareholders other than DSSI may be interested to hear your reason for rejecting my proposals. These proposals represent an opportunity for your stockholders to realize excellent value for their shares. I would very much like to discuss any and all aspects of my proposals directly with you and the other members of the Board of Directors. After doing so, I believe you will agree that such proposals are in the best interest of all shareholders of Tower Semiconductor Ltd. I look forward to hearing from you. In view of the importance of this matter, Chapman Capital is simultaneously releasing this letter to the press. Sincerely, Robert L. Chapman Jr. CONTACT: Chapman Capital L.L.C. Robert L. Chapman Jr. Managing Member 213/895-4174 |
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