SEOUL, South Korea and SAN JOSE, Calif., May 27, 2016 /PRNewswire/ -- MagnaChip Semiconductor Corporation ("MagnaChip" or the "Company") (NYSE:
MX), a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products, announced today that it has
entered into a Settlement Agreement with Engaged Capital, LLC ("Engaged Capital"). Under the terms of the agreement,
Camillo Martino and Melvin L. Keating will immediately join the
Company as observers of the Company's Board of Directors (the "Board"). In addition, the Company will nominate Mr. Martino
for election to the Board at the Company's 2016 Annual Meeting of Stockholders, together with six of MagnaChip's incumbent
directors, who will stand for reelection. Immediately after the 2016 Annual Meeting of Stockholders, the Board will appoint
Mr. Keating as a director. Both Messrs. Martino and Keating will serve on the Board's Strategic Review Committee upon becoming
members of the Board.
"We welcome the addition of Camillo and Mel to the MagnaChip board. MagnaChip's business continues to strengthen and
over the last year, we have materially reduced operating costs and improved fab utilization. The board looks forward to
leveraging both Camillo and Mel's combined experience managing semiconductor businesses as we work to continue to enhance the
value of MagnaChip for our shareholders," stated Doug Norby, Chairman of the Board of MagnaChip
Corporation.
"We were pleased to have been able to continue the constructive interaction we have enjoyed with the MagnaChip Board over the
last year in adding Camillo and Mel as directors. As strong shareholder advocates and experienced semiconductor executives
and dealmakers, we have confidence Camillio and Mel will work effectively with the rest of the board to optimize the value of
MagnaChip for shareholders," said Glenn W. Welling, Founder and CIO of Engaged Capital.
After the appointment of Mr. Keating to the Board following the 2016 Annual Meeting of Stockholders, the Board will be
comprised of eight directors, each of whom is elected annually, and the Company agreed not to increase the size of the Board
beyond ten directors during the term of the Settlement Agreement. The Company will present its director nominees in its
definitive proxy materials, which will be filed with the Securities and Exchange Commission in due course. Pursuant to the
Settlement Agreement, Engaged Capital has agreed to withdraw its notice of intent to nominate directors at the 2016 Annual
Meeting of Stockholders, to vote all of its shares in favor of the Company's nominees and, so long as Institutional Shareholder
Services concurs, in favor of the Board's recommendation related to certain ordinary business presented at the 2016 Annual
Meeting of Stockholders. Engaged Capital has also agreed to a customary standstill provision.
MagnaChip's 2016 Annual Meeting of Stockholders has not yet been scheduled. MagnaChip stockholders are not required to take
any action at this time.
About Camillo Martino
Camillo Martino, age 54, currently serves as a Board Member and Executive Advisor to
technology companies. Mr. Martino also served as a director and the Chief Executive Officer of Silicon Image, Inc. (formerly NASDAQ:SIMG), a leading provider of wired and wireless video, audio and data connectivity
solutions, from January 2010 until the completion of its sale to Lattice Semiconductor Corporation
in March 2015. From January 2008 to January
2010, Mr. Martino served as Chief Operating Officer of SAI Technology Inc., a supplier of LTE, Wi-Fi, Cloud RAN and
security technology to the mobile communications industry, where he also served as a director from June
2006 to November 2010. From July 2005 to June 2007, Mr. Martino served as the President, CEO and Director of Cornice Inc., a technology supplier of
portable storage solutions to the portable consumer and mobile phone markets. From August 2001 to
July 2005, Mr. Martino served as the Executive Vice President and Chief Operating Officer at Zoran
Corporation, a multinational digital technology company. Prior to that, Mr. Martino held multiple positions with National
Semiconductor Corporation for a total of nearly 14 years. Mr. Martino holds a Bachelor of Applied Science in Electrical
Engineering from the University of Melbourne and a Graduate Diploma in Digital Communications from
Monash University (Australia).
About Melvin L. Keating
Melvin L. Keating, age 69, has been a consultant, providing investment advice and other
services to private equity firms, since November 2008. He has served as a director of Red Lion
Hotels Corporation, a hospitality company primarily engaged in the franchising, ownership and operation of hotels, since
July 2010 and served as Chairman of the Board of Directors from January
2013 through September 2015. In addition, since September
2015, Mr. Keating has served as a director of Agilysys Inc., a leading technology company that provides innovative
software for point-of-sale (POS), property management, inventory and procurement, workforce management, analytics, document
management and mobile and wireless solutions and services to the hospitality industry. Mr. Keating also currently serves as a
director of ModSys International Ltd. (NASDAQ: MDSY) (formerly BluePhoenix Solutions Ltd.), a
legacy platform modernization provider, and served as the Chairman of its Board of Directors from February
2012 through May 2015. Prior to that, Mr. Keating served as the President and Chief
Executive Officer of Alliance Semiconductor Corp., a worldwide manufacturer and seller of semiconductors, from 2005 to
October 2008. Mr. Keating also previously served as Executive Vice President, Chief Financial
Officer and Treasurer of Quovadx Inc., a healthcare software company, from 2004 to 2005. Prior to that, he was employed as a
Strategy Consultant for Warburg Pincus Equity Partners from 1997 to 2004, providing acquisition and investment target analysis
and transactional advice. During the course of his career, Mr. Keating also served on the Boards of Directors of the following
public companies: API Technologies Corp; Integrated Silicon Solutions Inc.; Tower Semiconductor Ltd.; Integral Systems, Inc.
(October 2010 – July 2011); White Electronic Designs Corp.
(February 2009 – May 2010); Crown Crafts Inc. (August 2010 – August 2013); Bitstream, a/k/a Marlborough Software Development;
Plymouth Rubber Co.; Price Legacy Corp.; InfoLogix, Inc. (April 2010 – February 2011); LCC International, Inc.; and Aspect Medical Systems Inc. (April
2009 – November 2009). Mr. Keating holds a B.A. degree in Art History from Rutgers University, as well as an M.S. in Accounting and an M.B.A in Finance, both from The Wharton School of the
University of Pennsylvania.
About MagnaChip Semiconductor Corporation
Headquartered in South Korea, MagnaChip is a Korea-based designer and manufacturer of
analog and mixed-signal semiconductor products for high-volume consumer applications. MagnaChip believes it has one of the
broadest and deepest ranges of analog and mixed-signal semiconductor platforms in the industry, supported by its 30-year
operating history, a large portfolio of registered and pending patents, and extensive engineering and manufacturing process
expertise. For more information, please visit www.magnachip.com.
Information on or accessible through MagnaChip's website is not a part of, and is not incorporated into, this release.
About Engaged Capital, LLC
Engaged Capital, LLC was established in 2012 by a group of professionals with significant experience in activist
investing in North America and was seeded by Grosvenor Capital Management, L.P., one of the
oldest and largest global alternative investment managers. Engaged Capital is a limited liability company owned by its principals
and formed to create long-term shareholder value by bringing an owner's perspective to the managements and boards of undervalued
public companies. Engaged Capital's efforts and resources are dedicated to a single investment style, "Constructive Activism"
with a focus on delivering superior, long-term, risk-adjusted returns for investors. Engaged Capital is based in Newport Beach, California.
Safe Harbor for Forward-Looking Statements
Information in this release regarding MagnaChip's forecasts, business outlook, expectations and beliefs are
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties. These statements include statements about certain current and future events relating to its Board of Directors and
the Board of Directors' continued evaluation of strategic alternatives. All forward-looking statements included in this release
are based upon information available to MagnaChip as of the date of this release, which may change, and we assume no obligation
to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could
differ materially from our current expectations. Factors that could cause or contribute to such differences include the risks and
uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission. MagnaChip assumes
no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information,
future events or otherwise.
Additional Information and Where to Find It
This release may be deemed to be solicitation material in connection with the matters to be considered at the 2016
annual meeting of shareholders of MagnaChip (the "2016 Annual Meeting"). MagnaChip intends to file
a proxy statement and a WHITE proxy card with the SEC in connection with any such solicitation of proxies from MagnaChip
shareholders. MAGNACHIP SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ACCOMPANYING WHITE PROXY CARD WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Shareholders will be able to obtain any proxy statement, any amendments or supplements thereto and other
documents filed by MagnaChip with the SEC for no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at MagnaChip's website at http://investors.magnachip.com/ in the "SEC Filings" section
or by writing to MagnaChip at 60 South Market Street, Suite 750, San Jose, CA 95113.
Participants in the Solicitation
MagnaChip, its directors and certain of its executive officers may be deemed to be participants in the solicitation of
proxies from MagnaChip's shareholders in connection with the matters to be considered at the 2016 Annual Meeting. Investors
may obtain information regarding MagnaChip and its directors and executive officers in MagnaChip's Annual Report on Form 10-K
(the "Form 10-K") for the year ended December 31, 2015, which was filed
with the SEC on February 22, 2016, and MagnaChip's Amendment No. 1 to its Annual Report on Form
10-K/A (the "Form 10-K/A"), which was filed with the SEC on April 29,
2016. To the extent holdings of MagnaChip securities by MagnaChip's directors or executive officers have changed since the
amounts disclosed in the Form 10-K and Form 10-K/A, such changes have been or will be reflected on Initial Statements of
Beneficial Ownership on Form 3 and Statements of Change in Beneficial Ownership on Form 4 filed with the SEC. More detailed
information regarding the identity of potential participants in the solicitation, and their direct or indirect interests, by
security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in
connection with the 2016 Annual Meeting.
CONTACT:
Robert Pursel
Director of Investor Relations
Tel. +1-408-625-1262
robert.pursel@magnachip.com
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SOURCE MagnaChip Semiconductor Corporation