Believes Legion’s Candidates Are Objectively Better Qualified to Oversee and Help with OneSpan’s Transition to a Modern Cloud-First, Recurring Revenue Software Company
The Four Incumbent Directors Being Targeted Have All Presided Over Significant Underperformance and Lack Both Hardware and Relevant Cloud Experience Essential to Ensuring Company’s Success
Recently-Added Directors Largely Come from Legacy, Low-Growth Companies and Appear to Possess Personal Connections to Incumbent Directors
Legion Encourages Fellow Stockholders to Vote on the WHITE Proxy Card FOR Its Independent Directors – Sarika Garg, Sagar Gupta, Michael J. McConnell and Rinki Sethi
LOS ANGELES--(BUSINESS WIRE)-- Legion Partners Asset Management, LLC, which, together with the other participants in its solicitation (collectively, “Legion Partners” or “Legion”), beneficially owns 2,790,121 shares of common stock of OneSpan Inc. (“OneSpan” or the “Company”) (Nasdaq: OSPN), representing approximately 6.9% of the outstanding stock, today issued a letter to stockholders in connection with its nomination of four highly qualified independent director candidates for election to OneSpan’s Board of Directors (the “Board”) at the Company’s 2021 Annual Meeting of Stockholders (the “Annual Meeting”): Sarika Garg, Sagar Gupta, Michael J. McConnell and Rinki Sethi.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210526006109/en/
Table 1 (Graphic: Business Wire)
The full text of the letter is below:
May 26, 2021
Dear Fellow OneSpan Stockholders:
As significant long-term owners of OneSpan stock, holding more than 5% of the outstanding shares since 2018, we are fully aligned with you in our desire to see the Company recover from the missteps of the past and chart a course towards improved value creation. In our view, this requires a refreshed Board with the right skill sets to help achieve OneSpan’s stated goal of transitioning from hardware to a cloud-first, recurring revenue software company. Unfortunately, the Board’s expertise and experience have not appropriately evolved in keeping with this strategy – and stockholders have been the ones to pay the price.
Despite the Company’s claims, most of the current directors lack hardware and/or modern software experience. Further, OneSpan has misleadingly portrayed its Board members’ legacy, low-growth and on-premise software company experience as relevant. That is why we have recruited and nominated a world-class group of technologists, operators, executives and investors who have overseen, led and invested in numerous successful modern public software and hardware companies. We believe our candidates are objectively better qualified to oversee the task at hand than the Company’s nominees:
The bottom line is that a modern public software company needs to be led by individuals with modern software experience. Our nominees would bring the right C-level operational expertise, technical, cybersecurity, capital allocation and capital markets experience and governance and investment backgrounds that are needed on the Board at this time.
In contrast, the four directors we are seeking to replace – John Fox, Jean Holley, Matthew Moog and Marc Zenner – have, for the most part, presided over long periods of underperformance and appear to lack experience at modern software and hardware public companies. They have no comparable operating experience at software or hardware companies, no Board experience at any other public software or hardware companies, no apparent investment experience in public software or hardware companies and no cybersecurity technical experience.
Disappointingly, at a time when the Company should be looking to the future, it has instead chosen to re-litigate the past. Contrary to what OneSpan recently said, Legion has not dropped any of its ideas. Legion continues to believe the following must be addressed to improve the Company’s valuation:
The Company’s false narrative about our ideas is yet another example of OneSpan making misleading statements – some of which we detailed in our recent presentation. As the Company itself admits, we have spent years attempting to help management including by making specific suggestions that would likely not have been adopted without our pressure – as illustrated by Table 1.
And, despite hollow promises of committee leadership refreshment, the single change the Board has made this year has been to make Al Nietzel Chair of the Audit Committee.
In the face of our significant efforts to collaborate on refreshment, the Board has rejected our highly qualified nominees and instead defensively added new directors with questionable qualifications and fit, as well as prior connections to existing directors. Consider the following:
Notably, there is a curious pattern of geographic overlap and concentration among the incumbent directors. Ms. Holley, Ms. Johnson and Mr. Capers all reside in the Atlanta area, with Ms. Johnson and Mr. Capers being added to the Board afterMs. Holley moved from the Chicago area to the Atlanta area. Similarly, four existing directors currently reside in the Chicago area. These sorts of boardroom connections can lead to a lack of independence and robust debate, which ultimately is not good for stockholders.
The time for real change has come. OneSpan’s legacy directors can no longer be allowed to preside over a heavily discounted valuation while occupying seats on the Board of a Company for which their own experience and backgrounds were arguably never a fit.
We urge stockholders to support all four of Legion’s nominees by voting on the White proxy card.
Sincerely,
Chris Kiper and Ted White
Legion Partners Asset Management, LLC
For more information about Legion’s case for change at OneSpan, please visit https://protectonespan.com/.
VOTE FOR LEGION’S FOUR NOMINEES ON THE WHITE PROXY CARD TODAY
About Legion Partners
Legion Partners is a value-oriented investment manager based in Los Angeles, with a satellite office in Sacramento, CA.Legion Partners seeks to invest in high-quality businesses that are temporarily trading at a discount, utilizing deep fundamental research and long-term shareholder engagement. Legion Partners manages a concentrated portfolio of North American small-cap equities on behalf of some of the world’s largest institutional and HNW investors.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210526006109/en/
Media Contact: Sloane & CompanyJoe Germani / Dan Zaccheijgermani@sloanepr.com / dzacchei@sloanepr.com Investor Contact: Saratoga Proxy Consulting LLCJohn Ferguson / Joe Mills (212) 257-1311 info@saratogaproxy.com
Source: Legion Partners Asset Management, LLC