the battle continues
Exhibit E
509 Madison Avenue, Suite 406
New York, New York 10022
Tel. (212) 297-2555
Fax (212) 297-2550 S. Muoio & Co. LLC
May 18, 2011
Mr. Bernard T. Marren
Chairman of the Board
OPTi Inc.
3430 Bayshore Road, Suite 103
Palo Alto, CA 94303
Re: OPTi, Inc. ("OPTi") 2011 Annual Meeting of Shareholders
Dear Mr. Marren:
I am writing on behalf of our firm, S. Muoio & Co. LLC, a Delaware limited liability company ("SMC"), in response to your letter dated May 16, 2011. SMC requests that this letter be shared with the other members of OPTi's Board of Directors.
As noted in my letter to you dated May 13, 2011, SMC has the shared power to vote or direct the vote of approximately 28% of the outstanding shares of OPTi's common stock. As such, SMC has sufficient voting power under California's cumulative voting procedures to elect at least one person to OPTi's Board of Directors without the support of any other shareholder votes. But SMC's cumulative voting rights cannot be frustrated, as you suggest, by restricting nominees for the Board exclusively to candidates nominated in advance of the shareholder meeting by the incumbent Board. To the contrary, every shareholder of a California corporation has the right at shareholder meetings to directly nominate persons for election as directors. This is not simply SMC's position; it is the position of the California Supreme Court.
SMC is not taking the position that the incumbent Board may not, subject to the proper exercise of its members' fiduciary duties, establish procedures by which it will consider persons whom the Board wishes to nominate. 1
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1 OPTi's attempt to cite the procedures set forth in the proxy statement for last year's annual meeting is unavailing. That proxy described only those procedures by which a shareholder may propose a candidate for consideration by the Board. It did not describe any procedures governing shareholder nominations at the meeting.
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S. Muoio & Co. LLC
SMC is not asking the Board to use these procedures to nominate anyone. SMC is saying that these procedures can in no way diminish stockholders' rights to place other candidates in nomination at the annual meeting itself. As your May 16 letter acknowledges, neither the California Corporations Code nor OPTi's articles of incorporation or bylaws limit or condition a shareholder's right to nominate candidates for the Board at the annual meeting and to have the voting for those candidates cumulated.
OPTi's insistence on the exclusive use of the Board's nomination procedures is a blatant attempt by the incumbent directors to entrench themselves by preventing the shareholders from cumulating votes in favor of anyone other than candidates who have been handpicked by the incumbent Board. Without the ability to exercise their right to present opposing candidates, shareholders are disenfranchised.
Your letter states that Mr. Mazzoni has been "designated" as inspector of elections. As a corporate officer, Mr. Mazzoni is not independent. SMC reiterates its request that the Board appoint independent inspectors of election.
SMC's proxy will attend the annual meeting of OPTi's shareholders, place in nomination an additional candidate, and announce its intention to vote cumulatively. If OPTi denies its shareholders the right to nominate and vote for the candidate of their own choosing, SMC reserves the right immediately to seek judicial relief, including a determination of the validity of the election of directors and of the persons entitled to serve as directors.
In this context, SMC's legal counsel requests the opportunity to discuss the mechanics of the meeting procedure with OPTi's attorneys prior to the meeting. Please provide us with the contact information for OPTi's attorneys.
2
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S. Muoio & Co. LLC
We continue to believe that OPTi and its shareholders would benefit by the addition of an experienced financial professional to the current board.
Bernie, on a personal note, I am disappointed that in light of all the conversations we have had on this subject, OPTi has chosen to resist our legitimate rights of ownership and has left us no option but to pursue this more contentious path.
Very Truly Yours,
S. Muoio & Co. LLC
/s/ Salvatore Muoio
By: Salvatore Muoio
Title: Managing Member
Cc: Board of Directors |
