Expresses Concerns with the Halls’ Ongoing Campaign to Advance Self-Serving Agenda at Expense of Velodyne Stockholders
Believes Latest Missive from the Halls is Intended to Distract from Their Own Track Record of Misconduct, including Theft of Confidential Trade Secret Information
Stockholders Need Take No Action at this Time
SAN JOSE, Calif.–(BUSINESS WIRE)– Velodyne Lidar (NASDAQ:VLDR, VLDRW))) today issued a the following statement in response to the announcement from David and Marta Thoma Hall of their intent to nominate two candidates to stand for election to the Velodyne Board of Directors at the Company’s 2022 Annual Meeting.
David Hall and Marta Hall have engaged in an ongoing campaign of misstatement, obfuscation and obstruction, with the purpose of promoting their own interests at the expense of Velodyne and its public stockholders. David Hall’s latest “Letter to Shareholders” not only repeats his false claims but ignores his own misappropriation of Velodyne’s intellectual property and the Halls’ history of conduct contrary to the best interests of Velodyne.
In Velodyne’s view, perhaps the most egregious falsehood in David Hall’s most recent letter is the suggestion that he and Marta Hall have any interest in promoting the interests of any stockholders other than themselves. The undisputed record provides overwhelming evidence to support the conclusion that they have no such interest:
- On February 22, 2021, Velodyne announced that its Audit Committee, comprised of three independent directors, had conducted an investigation, led by an independent law firm, into actions by directors David Hall and Marta Hall. As a result of that investigation, the Audit Committee and the Board concluded that both David Hall and Marta Hall “failed to operate with respect, honesty, integrity, and candor” toward the Company’s officers and directors. The independent investigation concluded, among other things, that:
- The Halls acted inappropriately by undermining management, to the detriment of the Company and its public stockholders;
- The Halls refused to comply with their obligations as directors of the Company, including by refusing to cooperate with investigators; and
- Mr. Hall demanded that the Board release him from his lock-up agreement and permit him to sell a large quantity of Velodyne stock early and threatened to harm the stock price if he did not get his way.
- Velodyne has been forced to pursue arbitration against David Hall for his misappropriation of approximately 300,000 Velodyne files containing confidential, proprietary, and trade secret information which he downloaded to over 70 devices. In a recent proceeding, the arbitrator issued a preliminary injunction against David Hall after finding that the Company had demonstrated a likelihood of prevailing on its breach of contract claim and that his conduct raises the specter of irreparable harm to Velodyne. Conveniently, David Hall’s various press releases make no mention of that proceeding, nor does his recent letter to stockholders explain how his conduct can be reconciled with a professed commitment to an “integrity-rich culture.”
- David and Marta Hall have repeatedly failed to comply with applicable SEC filing requirements regarding timely and accurate reporting of their shareholdings – conduct that stands in stark contrast to David Hall’s supposed commitment to “strong corporate governance.”
- David and Marta Hall have consistently demonstrated that they do not understand or care to comply with the basic responsibilities required to serve as directors of a public company. Because the Audit Committee did not believe that Ms. Hall had any experience or familiarity with serving as a public company Board member, Marta Hall was required to complete training regarding the responsibilities of public company board members. Despite that training, Ms. Hall’s ongoing conduct demonstrates that, in Velodyne’s view, she remains unqualified to serve on a public company board.
- After the Board made the necessary decision following the Audit Committee investigation to remove Marta Hall from her position as Chief Marketing Officer and to replace David Hall as Chairman, David Hall’s response was to voluntarily resign from the Board with two years left on his term as a director. This followed his unilateral decisions to resign as CEO and then as Executive Chairman.
Put simply, David Hall quit – on Velodyne and its public stockholders, seemingly without the slightest concern about the commitments he had made or the duties he owed as a director.
- Finally, when David Hall had the chance to nominate a board candidate at the 2021 stockholders’ meeting, he nominated someone who he paid more than $225,000 and who was previously found by a Delaware Court to have breached his fiduciary responsibilities as a director of a public company. Despite vehement objection by the Board, David Hall, as majority stockholder, installed him on the Board. Velodyne believes that David Hall cannot be trusted with the responsibility of selecting directors.
In short, the Company believes the totality of the Halls’ conduct represents a wholesale abandonment of any loyalty to Velodyne, its employees, and its public stockholders. The Board urges all stockholders to focus on the Halls’ actions, rather than the self-serving revisionism reflected in Mr. Hall’s latest stockholder letter.
The date of the Company’s 2022 Annual Meeting of Stockholders has not yet been announced. Velodyne stockholders are not required to take action at this time.