Velodyne Lidar, Inc. (NASDAQ: VLDR, VLDRW) today issued the following response to a filing by David Hall and Marta Thoma Hall (the “Halls”), and Eric Singer:
Velodyne Lidar is the leading lidar company, known worldwide for its broad portfolio of breakthrough lidar technologies, having delivered approximately $95 million in revenue through the sale of 11,710 units in 2020. The Velodyne Lidar Board of Directors and management team are executing on a strategy designed to drive long-term growth for the Company and value for stockholders with the highest standards of corporate governance. Under the direction of the current Board, the Company continues to set production records and the management team is delivering significant progress on its growth plans, positioning Velodyne Lidar to meet the rapidly growing volume requirements of its customers in the coming years.
Continuing to Deliver Significant Progress on Growth Plans
Today, Velodyne Lidar is the only lidar company with both the breadth of product portfolio and the manufacturing capability to deliver low-priced lidar with multiple specifications at scale for many real-world applications. Velodyne Lidar also continues to innovate, launching award-winning products that will continue to advance the Company’s strong pipeline and meet the increased demand for its revolutionary hardware and software solutions.
The Company believes its pipeline is the most robust in the industry, as demonstrated by a 51% increase in projects – growing from 131 projects in January 2020 to 198 as of May 2021. Velodyne Lidar shipped over 2,600 sensors in the first quarter of 2021 alone, including 600 solid state sensors. Based on available public information, this far exceeded shipments of all of the Company’s public competitors combined.
Also, the Company continues to increase its investment in R&D initiatives, which have consistently resulted in the delivery of new products. Since going public in September 2020, Velodyne Lidar has released its breakthrough solid state sensors, the Velarray H800 and Velarray M1600, and has secured significant commercial awards across ADAS and Robotics. The Company’s software efforts are bearing fruit as well. Velodyne Lidar showcased its hardware and software Pedestrian Automatic Emergency Braking (PAEB) solution, outperforming radar and camera technology, in particular, in low-light and nighttime conditions. Furthermore, the Company recently announced its Intelligent Infrastructure Solution, an award-winning hardware and software technology designed to solve some of the most challenging and pervasive infrastructure problems. Finally, the Company has multiple disruptive new products and software solutions under development, each of which we believe will open up new markets and win new business.
During its tenure as a public company, Velodyne Lidar has consistently emphasized transparency regarding factors affecting its business, including the impacts of COVID-19. Indeed, notwithstanding the pandemic, the Company has continued to sign new customers and strengthen its long-term sales pipeline. Today, as a result of the merger with Graf Industrial Corp., the Company has a significantly enhanced balance sheet and access to growth capital. The Board and management team remain confident that Velodyne Lidar’s long-term growth outlook remains strong.
Best-in-Class Management Team Supported by a World-Class Engineering Team
In recent months, Velodyne’s Chief Executive Officer, Dr. Anand Gopalan, PhD, and Board have continued to bolster the Company’s leading executive team with a focus on maintaining its position as the most innovative lidar company in the industry. Supporting Velodyne Lidar’s executives is a world-class engineering team with more than 120 engineers on staff.
Exceptionally Qualified and Diverse Board of Directors Overseeing Velodyne’s Proven Strategy
The Company has taken action to significantly refresh its Board of Directors, adding diverse, highly qualified and experienced industry veterans who are well qualified to oversee the continued execution of Velodyne’s proven strategy. Today, Velodyne Lidar’s Board comprises eight directors, the majority of whom are independent and more than half of whom are ethnically diverse and/or women. Most recently, the Company named two highly experienced professionals to its Board:
Hamid Zarringhalam: The Board was proud to announce the recent appointment of Mr. Zarringhalam to the Board, who will stand for election as a Class I director at the 2021 Annual Meeting of Stockholders. Mr. Zarringhalam brings nearly 35 years of experience in technology, operations, and business development to the Velodyne Board. He is a highly qualified Board member, having served in a Board capacity for several companies in the Nikon investment portfolio, in particular, advising on digital strategy and new market expansion.
Deborah Hersman: The Board also recently unanimously appointed Ms. Hersman, the former chair of the National Transportation Safety Board and a well-respected pioneer in the industry. Ms. Hersman brings nearly 30 years of government, nonprofit and private sector executive leadership experience in transportation, safety, and policy.
Despite the Halls’ false assertions to the contrary, Chris Thomas’s appointment as a Class II director was based on the Board’s judgment as to the best interests of the Company in filling the vacancy created by Jim Graf’s departure from the Board. The appointment of Mr. Thomas as a Class II director, effectively immediately and simultaneously with Mr. Thomas’s resignation as a Class I Director, was fully consistent with the Company’s bylaws. As a result, Mr. Thomas will be up for election next year at the Company’s 2022 Annual Meeting of Stockholders, in contrast to Class I directors who will be up for election in 2024 after their election this year. Mr. Thomas, who joined the Board in July 2020 prior to the merger, is an exceptionally qualified director, bringing both technology industry and international consulting experience from his tenure at Intel and McKinsey & Company. Michael Dee is a highly qualified and valued member of the Board and has nearly 40 years of experience in capital markets, including 26 years at Morgan Stanley in investment banking, capital markets and firm management. Mr. Dee also has extensive experience in corporate finance, private equity and more recently, SPAC-sponsored public companies.
David Hall’s Resignation from the Board and the Censuring of Mr. & Mrs. Hall
As disclosed on February 22, 2021, the Board’s independent Audit Committee conducted an investigation, aided by independent legal counsel, which concluded that Mr. and Mrs. Hall each behaved inappropriately with regard to Board and Company processes, and failed to operate with respect, honesty, integrity, and candor in their dealings with Company officers and directors. Accordingly, the Board approved remedial actions including censure and the removal of Mr. Hall as Chairman of the Board and the termination of Ms. Hall as an employee of the Company.
The Board Believes that the Halls’ Nominee – Eric Singer – Lacks Independence and is Unfit to Serve as a Velodyne Lidar Director
The Velodyne Lidar Board prides itself on its commitment and adherence to sound corporate governance, seeking highly qualified, independent and diverse directors. The Halls have put forward a candidate in Eric Singer who the Board believes exemplifies none of those characteristics. The Board determined not to recommend Mr. Singer for election at the upcoming Annual Meeting of Stockholders following a comprehensive process to evaluate Mr. Singer, including reviewing his qualifications and prior experience.
The Board was, and remains, troubled by Mr. Singer’s history as a public company director, especially as set forth in a Delaware Court of Chancery decision[1] in October 2018. In that case, the Court found that Mr. Singer breached his fiduciary duty as a director of PLX Technology by favoring the interests of one stockholder over the interests of all stockholders. Moreover, the Board continues to believe that a director with skills more directly related to Velodyne Lidar’s business would be preferable to Mr. Singer.
It is also important to note that the Board has expressed concerns about the special compensation arrangement between the Halls and Mr. Singer. Under the agreement, the Halls have agreed to compensate Mr. Singer with $100,000 in cash for serving as their nominee on the Company’s Board and, if he becomes a director, he would receive 25,000 additional shares in consideration from the Halls’ personal holdings. As of May 17, 2021, this total additional consideration was valued at approximately $675,000. The proposed compensation arrangement is significantly in excess of the amount payable pursuant to the non-employee director compensation program. The members of the Board remain concerned that, as a result of this compensation arrangement, Mr. Singer will be unduly influenced by the Halls.
The Board is committed to upholding the highest standards of corporate governance. That commitment is evidenced by the Board’s responses to various proposals made by the Halls in December 2020 that would have had the effect of enhancing the Halls’ control over the Company. Notably, the Halls’ recent filing makes no attempt to justify their proposals, controvert the facts set forth in the Proxy regarding those proposals and the Board’s responses, or dispute that the Board’s responses are fully consistent with its commitment to corporate governance. The Company’s Board and management team remain steadfast in their commitment to driving enhanced value creation and will continue to do what they believe is in the best interest of the Company and all Velodyne Lidar stockholders.
Velodyne’s Board of Directors recommends stockholders support Mr. Zarringhalam’s nomination at the 2021 Annual Meeting of Stockholders. There are two Class I seats up for election at the Company’s 2021 Annual Meeting of Stockholders and, for one of them, the Board has nominated and recommended Mr. Zarringhalam. The Board does not recommend any candidate for election other than Mr. Zarringhalam.
[1] In re PLX Technology Inc. Stockholder Litigation
SOURCE: Velodyne Lidar
